10 Ways Congress Can Ensure Accountability in COVID-19 Relief for Higher Education

In the wake of the COVID-19 pandemic, our country’s higher education system finds itself staring down a future rife with uncertainty. A looming economic recession has left Americans asking themselves how they’ll be able to afford tuition payments or repay their existing loan debts, all while knowing that earning additional postsecondary education may be their best shot to find job stability in a post-pandemic world. Institutions don’t know if they’ll be able to physically open their doors in the fall, and if they do, whether students will enroll. Questions remain about whether the shift to online learning caused by the pandemic will become permanent, how we can measure and monitor the quality of instruction in a remote environment, and just how deeply these unprecedented events will exacerbate the completion crisis and equity gaps that have long plagued our postsecondary system.

Congress has attempted to stem the immediate fallout of the crisis by injecting $14.25 billion in federal aid to support higher education (half of which was required to go directly to students as emergency grants), along with another $3 billion in education block grants to state governors through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed in late March.¹ But this aid was not sufficient to address even the immediate needs of students in our higher education system. The formula to allocate this funding sent a disproportionate amount to smaller private schools at the expense of community colleges that serve a greater share of part-time and low-income students; incongruent guidance from the Department of Education (Department) muddied the waters about how institutions can use this aid and which students can benefit from the relief; and the influx of taxpayer dollars came with little to no strings attached for institutions, allowing money to flow freely to predatory actors with alarmingly few protections for the students they serve.

As Congress looks ahead to future rounds of recovery and relief efforts, there is an opportunity to mitigate these risks by putting in place additional guardrails that better target funding toward the students who need it most, and away from institutions that may be more interested in taking advantage of vulnerable Americans than helping them succeed. Achieving this goal will require Congress to prioritize the needs of students and taxpayers and bolster basic consumer protections in the process—including securing better transparency around what students are paying for in this online environment, requiring more consistent oversight across all federal watchdogs, and directing support to schools that provide a real a return on investment for students. Here are ten ideas policymakers should consider as they look to provide greater financial support to the higher education sector:

1. Reset lifetime Pell eligibility to exclude 2020.
2. Show students where their tuition dollars are going.
3. Institute a federal bottom line for schools receiving aid.
4. Incentivize getting students through not just to college.
5. Make sure schools spend new money on teaching and learning.
6. Ensure transparency in contracts with third parties for online courses.
7. Increase clarity around transfer policies.
8. Use accreditation to smooth credit transfer.
9. Hold accreditors accountable for how well their schools are serving students.
10. Require accreditors to use common definitions to ensure quality in online learning.

1. Reset lifetime Pell eligibility to exclude 2020.

The Pell Grant is the built-in mechanism we have in place at the federal level to distribute aid to low- and moderate-income students, and it is utilized by 40% of all undergraduate students today.¹ This aid is often a lifeline to help students both access and complete college, as the funding does not have to be repaid and typically covers up to one-third of the annual costs of attending school. The lifetime eligibility window for how long students can access a Pell Grant currently sits at 12 full-time semesters, or the equivalent of six years. Students can expend more or less of this eligibility each year, depending on whether they attend school part-time, take additional classes over the summer, or find themselves needing more than six years to complete as a result of credits not properly transferring or a change in their course of study.² But once students hit this eligibility limit, there is currently no way for them to access additional funding—even in the face of a catastrophic event, such as attending college in the midst of a pandemic that required students to abruptly leave their campuses, study in an online format, and face significant uncertainty about if they’ll be able to return to school once classes resume in the fall.

Given this once-in-a-lifetime disruption to students’ postsecondary experiences, Congress has a responsibility to minimize the fallout of the COVID-19 pandemic by making sure that none of the terms in calendar year 2020 count toward a student’s lifetime Pell eligibility limit. Exempting these semesters would give Pell students the ability to continue their education if the disruptions caused by COVID-19 require them to stay in school beyond the six-year limit, such as changing majors or having to transfer schools and losing credits in the process.

2. Show students where their tuition dollars are going.

As COVID-19 quickly swept the nation, colleges had no choice but to shut their doors and send millions of students home to finish their spring terms online.³ Some institutions had the resources to make this transition smoothly, while others struggled to quickly prop up the infrastructure their students and faculty needed to successfully finish out the year.⁴ While students understand that this unprecedented situation was outside of any one institution’s control, the abrupt shift to online learning and demand by students for refunds for things like room and board, athletics, and activities fees has brought to light much bigger questions about how institutions spend the tuition dollars they receive.⁵

Even prior to the pandemic, there was often little transparency around exactly what students pay for when institutions cash in their tuition checks. In fact, it’s nearly impossible for students and their families to discern whether institutions of higher education are primarily spending their money on things like marketing, fancy amenities, or instruction and support services for their students—let alone to suss out what percentage of tuition and fees are still justified if all classes shift to a remote setting halfway through the semester. But institutions themselves do have a clear accounting of where tuition money is being spent, because those who are eligible to receive federal student aid are already required to report financial information to the Integrated Postsecondary Education Data System (IPEDS), which tracks their sources of revenue, categories of spending, and potential outstanding liabilities.⁶ Yet this information is tucked away inside an Education Department database, a place where consumers are highly unlikely to ever go.

With billions in federal relief aid already provided to institutions and a second round likely on its way, students and taxpayers have a right to more information about what they’re paying for and what they’re getting in return. This will be especially critical as schools continue to make decisions about whether they will require students to return in-person, stay fully online, or take a hybrid approach, and as schools look to ramp up their marketing and recruitment budgets in an effort to build or maintain their enrollment numbers in the years ahead. That’s why Congress should create a consumer-friendly way to make this information more transparent in the form of a “receipt” for higher education. Similar to a home inspection or Truth in Lending report that one receives before purchasing a home, each student should be provided with a receipt that would include a read-out of how their tuition dollars will be spent by their institution. Based on the financial information that institutions already report to IPEDS, this receipt should reflect the institution’s expenses within the previous year to provide the most recent and accurate accounting of where the money paid to an institution goes. It should also include a new “marketing and recruitment” bucket as this expense, which provides little to no benefit for current students, accounts for a large portion of some schools’ budgets and may indicate to consumers that a school is more interested in cashing new checks than providing quality teaching and learning to those who are enrolled.

3. Institute a federal bottom line for schools receiving aid.

The number one reason students go to college is to get a job so they can earn a stable income and live a secure life.⁷ When they enroll, most expect to both graduate and to gain the skills they need to get a good-paying job that will provide them a return on their investment in higher education. As Congress helps institutions stay afloat in the wake of the COVID-19 pandemic, it has a responsibility to ensure that additional taxpayer dollars are targeted to institutions with a demonstrated ability to help students meet these goals. The first round of stimulus funding to institutions did nothing to consider the outcomes schools provided for students before distributing federal checks. In an effort to get relief dollars out the door and into the hands of institutions as quickly as possible, Congress put almost no qualifications in place as to which schools could receive the more than $14 billion in CARES Act funding beyond allocating funding based on their share of Pell students. The result? More than $245 million in institutional aid alone has already gone directly to schools that graduate fewer than 25% of their students, and $125 million has gone to schools where fewer than 25% of their students are able to start paying down $1 of their principal within five years of leaving school.⁸

But as a growing number of students turn to postsecondary education to reskill, safeguards are needed to limit future federal relief dollars from going to schools that make most of their students worse off than if they had never attended at all. To accomplish this goal, Congress should prohibit any new federal stimulus funding from going to any institution that has a Cohort Default Rate (CDR) that is greater than its completion rate—meaning a student is more likely to default than graduate. This sector-neutral, outcomes-based approach is one step the federal government can take to divert critical funding away from the worst actors and instead make sure it gets into the coffers of schools that demonstrate a return on investment for the students they serve. It would also help to spotlight schools that are leaving most of their students in the worst-case scenario: taking out loans to start college, but never finishing (a status which makes them three times more likely than graduates to default on their student loans).⁹

4. Incentivize getting students through not just to college.

Around the same time that COVID-19 began disrupting and rearranging daily life in the US, high school seniors across the country were receiving acceptance letters from colleges and starting to make decisions about their next steps. We’ve already heard a lot about how the pandemic and current recession are leading the high school class of 2020 to rethink college plans—whether that means choosing a school that costs less or is closer to home, taking a gap year, or abandoning the idea of going to college altogether. While these decisions have big implications for colleges’ bottom lines, so do those of another, much larger group: returning college students. With projections suggesting that colleges could face potential enrollment declines of 5% to 20% this fall, it’s more important than ever that a focus on student retention remains top of mind for institutional leaders and policymakers alike.¹⁰ Retention is a win-win: failing to retain students hurts a school’s net revenue, and non-completing students face a tough labor market without the benefit of a degree, which can make it harder to earn a stable living wage and repay student loans.

By creating a discretionary grant program or stimulus package set-aside through which colleges can apply for funding for retention-focused initiatives, the Department and Congress could use the power of the purse to help schools remain committed to retention in a moment wheretheir budgets are strained and their priorities are spread thin. To ensure that funding goes to schools that both need it and are prepared to use it to deliver quality outcomes for students, institutions should have to meet certain baseline eligibility criteria in order to apply for a grant, such as having at least one-third of their undergraduates receiving a Pell Grant and graduating their Pell students at a rate that is within 10 percentage points of their non-Pell graduation rate. Approved institutions could receive funding through a 50/50 payout model in which the distribution of money is tied to a school’s success in retaining students. For example, the first half of awarded funds could be provided upfront and go directly to students to decrease their costs of attendance, with remaining funds provided to the college itself at the conclusion of the 2020-2021 academic year—contingent upon, or in an amount proportional to, those students remaining enrolled or having completed a degree at that time.

In their application for funding, institutions could be asked to outline specific retention initiatives for which their share of the funding would be earmarked, such as building or scaling up predictive analytics systems to allow for proactive student advising, additional academic supports, or emergency grant programs that assist students with childcare or transportation needs that may put them at heightened risk of dropping out. Participating institutions could also be required to provide a publicly accessible report on their use of funds and student outcomes, which would allow for the program to contribute to a growing knowledge base of scalable strategies for improving student retention.

5. Make sure schools spend new money on teaching and learning.

During the COVID-19 crisis (and beyond), Congress needs to ensure that institutions receiving billions in federal financial aid and stimulus dollars provide a high-quality education to students. That requires greater oversight of how schools are spending taxpayer dollars, especially given that we’ve already seen institutions ramp up marketing and advertising budgets in an effort to bring in new students—and the federal tax dollars that come with them.¹¹ If Congress provides additional investment to institutions of higher ed as part of relief and recovery packages, it should require that those schools spend a certain portion of that money, or a certain percentage of their tuition and fee revenue overall, on the instruction of students. Because just as stimulus funds to companies are intended to flow to save the jobs of workers not raise the pay of executives, taxpayers are not intending to send checks to schools in this crisis to cover non-classroom-related costs such as advertising or executive compensation.¹²

We know that many schools are thinking about their bottom lines right now, which may push them to make decisions that aren’t in the best interest of students. And declines in spending on instruction could be even more detrimental to students now that nearly all instruction has moved online. In exchange for additional dollars, Congress should implement a maintenance of effort provision that requires institutions that cash stimulus checks to maintain their current spending on instruction over the next several years. This would apply to the higher ed sector the same principle as we’ve seen with Paycheck Protection Program (PPP) loans from the Small Business Administration (SBA), which require businesses to maintain staff and salary levels.¹³

In addition to requiring a maintenance of effort provision to ensure instructional spending (and the student learning it funds) does not decrease in the coming years, Congress could also implement a bottom line that requires institutions that receive additional stimulus dollars to spend a certain amount, perhaps one-third, of tuition and fee revenue on instruction.¹⁴ Institutions that fall below the one-third threshold could be required to pay that money back to students (or taxpayers). Instructional spending could also be used as a check on enrollment growth during the crisis. It’s common for enrollment to increase significantly during times of economic downturn as individuals go back to school to learn new skills—and predatory schools are always waiting in the wings to take advantage of that trend.¹⁵ While some growth may be good, unchecked growth could come at the expense of a quality education. To prevent that problem, a college’s year-over-year enrollment growth rate could be tracked against its instructional spending, and if it falls below a basic level of spending on teaching and learning, it could be flagged for sanctions, including ineligibility for future federal funding.

6. Ensure transparency in contracts with third parties for online courses.

After years of talk about the potential of online learning, higher ed got an unprecedented crash course this spring as COVID-19 forced colleges to quickly shift to distance instruction. And while this past semester of “Zoom U” can be more aptly characterized as “emergency remote teaching” rather than true online education, it has nonetheless introduced a spiral of new questions and considerations for the future of college teaching and learning.¹⁶ As schools gradually release their plans for a still-uncertain fall term, many are incorporating at least partial online instruction. Yet while the process of developing and scaling up high-quality online learning platforms and creating remote systems for institutional administration is both expensive and time-consuming, most institutions are currently cash-strapped and have only a few months to get ready for the fall. This perfect storm could lead many institutions to hastily turn to outsourcing agreements with online program management companies, more commonly known as OPMs.

Schools can contract with OPMs to handle all aspects of the infrastructure, instructional design, marketing, recruiting, and administration of an online course or degree program, or they can hire them to focus on one or more specific areas of need. These contracts with OPMs can either be based on a fee-for-service model or a tuition-sharing model, and in the latter, a college may ultimately forfeit over half of a program’s revenue. These various contractual distinctions can have significant impact on the quality of online programs and can put students’ investment in their education at heightened risk.¹⁷ But right now, there’s often no way to easily tell which schools are contracting with an OPM, let alone how (or how much) they’re paying for those services. Most programs managed by an OPM don’t acknowledge their third-party affiliation in any way—not on their website, not on their marketing materials, and not in their recruiting calls or emails to prospective students.

To increase transparency around how tuition dollars are being spent and who exactly is providing the education that students (and taxpayers) are purportedly paying for, policymakers should require institutions to disclose the amount or percentage of funding provided to third-party contractors or OPMs charged with developing online programs. As a stipulation for receiving future COVID-19 stimulus funds, or even Title IV funding on the whole, colleges outsourcing more than 25% of a program could be mandated to publicly disclose the companies with which they have contracted, the amount spent and basic terms of payment, and what services were provided.¹⁸ Such disclosures should include a breakdown of key spending areas, including curriculum and instruction, marketing and advertising, and recruiting and admissions services; and schools should be required to acknowledge third-party contractors by name on webpages and marketing materials for any online programs for which services in those areas were outsourced.

7. Increase clarity around transfer policies.

With a potential uptick in the number of students seeking to transfer between institutions due to COVID-19, it’s critical that they be able to locate consistent and actionable information about the transfer process and how it will affect their progress toward a degree. Even though nearly 40% of postsecondary students already transfer between institutions at least once, finding key information about articulation agreements and transfer credit review policies is often an arduous task for potential transfer students.¹⁹ In a moment  especially pivotal to retain students in the higher ed system, the federal government can take action to increase the odds of a successful transfer by instituting transparency requirements around transfer policies for institutions receiving future COVID-19 funding.

Policymakers should require that any college accepting future stimulus dollars distribute clear and thorough information on transfer credit policies to all students who are currently enrolled or who apply to transfer in during the 2020-2021 academic year. Schools should be required to provide those students, by mail or email, an overview of the institution’s review processes for evaluating transfer credit, along with a list of cooperating institutions and courses from those institutions for which full credit transfer will be granted—or at minimum, to post such information in their course catalogs, or on their websites.

To make access to this information even more impactful, schools should be required to expand the target population for this disclosure to include students who were enrolled within the past four years but have not yet completed a degree, as these students may choose to re-enroll in college due to the current recession. And since the confusing patchwork of transfer policies is a concern that will last beyond the COVID-19 crisis, policymakers should consider more permanent guidance for how schools are required to disclose information on credit transfer, such as asking the Department to develop a standardized, easily located webpage template or fact sheet that colleges could use to provide students with consistent and usable information before they decide where to enroll.

8. Use accreditation to smooth credit transfer.

Data on transfers in higher education tell us that nearly half (43%) of a student’s earned credits can be lost in the process of shifting enrollment between institutions.²⁰ This is true for every type of institution, even those that share the same college accreditor. Policymakers should take this opportunity to use the likely increase in transfer activity as a result of the COVID-19 crisis to permanently improve the way we make transfer credits count through the accreditation process.²¹ Today, in order to receive accreditation status, institutions under the same college accreditor must approve other schools as meeting the standards worthy of accreditation—intended to be a form of “peer review.” However, even if member institutions recognize other schools as meeting an acceptable level of educational quality to be accredited, these same institutions will often refuse to recognize their “peer’s” coursework if a student eventually decides to transfer to their institution.

 To ensure that more transfer credits count, Congress should require that all institutions under the same college accreditor accept each other’s general education credits, which are usually mandatory at each institution as students work on obtaining a more advanced degree. If an institution believes another school is worthy of receiving accreditation, it should also be willing to accept credits from that school if their students wish to transfer. In order to facilitate articulation agreements between institutions (so institutions can better determine which courses are deemed equivalent), the next phase of COVID-19 funding could also include additional funding for schools willing to expand their transfer arrangements with other institutions during the next academic year. 

9. Hold accreditors accountable for how well their schools are serving students.

As the main entities in place to oversee quality at federally funded institutions, college accreditors should be a reputable entity to protect students and taxpayers during this crisis. But unfortunately, these watchdogs have too often fallen asleep on the job, allowing many low-performing institutions to receive a stamp of educational effectiveness even if they fail to provide any real opportunity for the students they purport to serve. For example, there are currently 30 accredited institutions that graduate less than 10% of students who enroll and 680 accredited institutions that show less than half of their students earning a credential, earning more than the average high school graduate, or being able to begin paying down their educational debt.²² Yet in spite of these dismal outcomes, these institutions remain accredited, and the accreditors that oversee them remain federally recognized as gatekeepers to taxpayer funding.

If Congress wants to ensure funding is directed to schools that have the capacity and willingness to provide good outcomes for the millions of students who attend higher ed every single year, it will need to ensure that the main arbiters of educational quality are doing their job effectively. This job becomes more important during the pandemic, as accreditors may be tempted to relax their standards to keep institutions afloat, even if it results in poor outcomes for students who enroll during the current academic year. One way for Congress to keep better watch on the watchdogs is to require that institutional accreditors ensure that at least half of students at the schools they approve graduate, get a decent paying job, and canbegin paying down their educational debt within a few years of leaving their institution.²³ Whether classes are online or take place in brick-and-mortar institutions, accredited institutions should be able to deliver positive outcomes for at least half the students they enroll. And if college accreditors can’t demonstrate that their institutions meet these minimum benchmarks, another accreditor will likely do a better job of protecting students from being left worse off than when they enrolled.

10. Require accreditors to use common definitions to ensure quality in online learning.

While the shift to online learning this spring was a necessary step to protect students, it also brought to light a critical problem: we currently don’t have a clear way to measure what high-quality online learning looks like. One way to address this problem is to ask accreditors—the actors most responsible for assessing and monitoring instructional quality—to take on a bigger role in ensuring that the colleges they oversee provide a high-quality remote education, by adopting a set of common definitions for the outcomes they’d like to see. Currently, accreditors have no uniform set of standards and metrics to evaluate institutions on their student outcomes or help guide their improvement. It’s often unclear what data and metrics are used to measure performance, and when they are presented, language is often vague, and definitions are applied inconsistently. This has made it notoriously hard to properly evaluate institutions and compare the quality of the education and outcomes they deliver, a task that is even more complex now that much of higher education has moved online.

To simplify this process and ease the burden on accreditors while they assess quality during the crisis, policymakers should ask accreditors to agree on common definitions for student outcomes in all categories on which institutions are evaluated.²⁴ These basic standard outcomes could fall into three buckets similar to what was outlined in the House Education and Labor Committee’s College Affordability Act (CAA): completion (such as graduation rates and rates of transfer), progress toward completion (such as retention rates and credit accumulation), and workforce participation (such as licensure pass rates and job placement rates).²⁵ To make the evaluation even more robust, each college accreditor could be required to measure institutional performance on seven key metrics: retention rates, persistence rates, transfer rates from a two-year institution to a four-year institution, completion rates, licensure or certification pass rates, post-enrollment earnings, and loan repayment rates. Each metric used by accreditors should be reported both for in-person students and online students to account for the massive shift to remote education. When both accreditors and institutions clearly know what’s being measured, the burden of reporting and evaluation will be lessened on both sides—and students will be the ultimate beneficiaries.

Conclusion

No sector has been immune to the havoc wreaked by COVID-19, including higher education. This industry has long been a pillar of mobility in our country, and in the face of a looming recession, keeping colleges and universities afloat is of paramount interest to our immediate and long-term economic recovery. And while the need to invest additional funding into the system to help institutions keep their doors open remains strong, we also need to make sure taxpayer dollars end up in the coffers of schools that are improving—and not harming—the lives of the students they purport to serve. Congress has an opportunity to both strengthen its oversight and target additional funding to students who need the assistance most as it considers additional recovery and relief packages. This list is not exhaustive, and there are certainly many more ways Congress can shore up federal guardrails to protect students and taxpayers both in the immediate aftermath of the pandemic and beyond. Yet these ideas represent an immediate opportunity for the federal government to refocus its attention not only on keeping our schools open for business, but on making sure this massive investment pans out for students and taxpayers, too.