President Obama on college cost (Part 3): Pay for student performance

affordable_promoIn my last post on President Obama’s proposals to help control the growth in college costs, I described how the president hopes to influence institutional behavior. Another key part of his proposals is to try to influence student behavior through the federal financial aid system, known as Title IV aid.

In what is a very brief part of his proposal, but yet may turn out to be one of the most controversial, is this:

Demand Student Responsibility for Academic Performance: To ensure students are making progress toward their degrees, the President will also propose legislation strengthening academic progress requirements of student aid programs, such as requiring students to complete a certain percentage of their classes before receiving continued funding. These changes would encourage students to complete their studies on time, thereby reducing their debt, and will be designed to ensure that disadvantaged students have every opportunity to succeed.

The heart of this proposal appears to tie eligibility for federal grants and loans to students’ ability to make progress toward some form of postsecondary credential, whether it be a degree or short-term certificate. Under current regulations, students must be enrolled for a minimum number of credit hours each semester (depending upon the type of program), and be certified by their institution as making “satisfactory academic progress” (SAP) toward a degree or certificate, with SAP defined by each institution.

While as I stated earlier many of the details of the president’s proposals need to be fleshed out, it appears that what he wishes to do is to implement a federal standard for SAP to replace each of the over 6,000 Title IV-eligible postsecondary institutions in the country using their own. The goal is to encourage students to accumulate more credits faster, thus shortening time-to-degree rates as well as overall credential completion rates.

While this appears to be a logical strategy for encouraging more students to earn their degrees faster, it may also have the unintended consequence of pushing more students out of the federal loan and grant programs if they cannot meet the SAP standard. Research by colleagues of mine such as Sara Goldrick-Rab at the U. of Wisconsin and Laura Perna at UPenn demonstrate that many students attend college part-time not out of choice, but because they do not receive enough financial aid to pay the costs associated with attending full time. Many of these students work part-time, or even full-time, jobs in order to supplement what they receive in financial aid.

By requiring students to meet federally-mandated SAP standards, without providing sufficient financial aid (from federal, state, and institutional sources), the poorest students will likely fall below the standards and lose their eligibility for federal aid. In the ideal world, the states and higher education institutions would step in to provide sufficient grant aid to supplement what is available from the federal government in order to ensure students can enroll for enough credits to meet the federal SAP standards. But past evidence shows that many states and institutions do not provide enough grants to ensure this, or do not target the grants at students who need them the most. Thus, moving forward on this aspect of the president’s proposal could have the unintended consequence of pushing the most needy students out of higher education. And because this proposal will be seen by many institutions and higher education lobbying organizations as impinging on institutional autonomy, it will likely face fierce opposition.

In my next post, I will turn to the second category in the president’s proposals, promoting innovation and competition in higher education.

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