Congress looking to lower ballooning costs of college education, add more accountability measures for school

WASHINGTON (TND) — House lawmakers took on the crisis in the cost of a college education on Thursday, which comes as borrowers are preparing to resume payments on student debt in the fall while the Biden administration continues to figure out a path to enacting widespread debt cancellation.

The Higher Education and Workforce Development subcommittee heard from witnesses Thursday on how the government can address the increasingly unaffordable cost of tuition and how to hold colleges accountable for allowing students to sign up for tens of thousands of dollars in student loans with no regard for whether it will help them secure a job and the loan will be paid back.

The cost of college tuition has skyrocketed over the years, quickly totaling up to the current total of more than $1.7 trillion in student loan debt.

President Joe Biden and some congressional Democrats have supported enacting widespread debt relief and making community college free for all Americans to address the cost issues. Republicans have pushed for encouraging more competition and transparency, along with holding colleges accountable for what its graduates’ career prospects and earning potential are upon leaving campus

“The federal government has doled out hundreds of billions of dollars to colleges without any sense of accountability presently public funding and institutional profit is based on the number of seats cause fills, not on the student's performance or success,” said Rep. Burgess Owens, R-Utah and chair of the subcommittee. “This profit-over-performance receipt has resulted recipe has resulted in many students with more debt and worse outcomes.”

Lawmakers also called on the Education Department to be more forceful in stepping in when colleges steer students toward taking on higher debt burdens without equipping them with the tools or education needed to use their skills upon graduation.

For-profit institutions received a lot of attention during Thursday’s hearing and from the Biden administration, which has canceled debt and cracked down on several schools that have been accused of misleading students and some that closed before they could graduate.

“To ensure students have access to the promise of higher education, the Department of Education must hold bad actors and higher education accountable for student success,” said Rep. Fredrica Wilson, D-Fla. and ranking member. “Stronger accountability regulations in higher education save students money and prevents them from wasting money on worthless degrees.”

Lawmakers also highlighted the disproportionate level at which Black and Hispanic students that attend for-profit schools default on their debt, and pointed to research showing they tend to be more aggressive in targeting that group of students.

“For-profits disproportionately tend to spend this advertising money in local areas with higher shares of Black and Hispanic students,” Dr. Stephanie Cellini, a professor of public policy and public administration at George Washington University said. “There's less data on recruiting numbers, but some evidence suggests that for-profits may spend up around $4,000 per student on them. We also know that these institutions tend to be located in higher poverty areas.”

Another issue contributing to ballooning education costs is what’s known as administrative bloat, where the scale of a school’s beauracratic structure raises expenses for the university and in some cases outweighs what a school is spending on instructors.

Witnesses at the hearing said the bloat is part of the root of the problem with the cost of higher education.

“The support structures and administrative accumulation around colleges and universities has just driven up the spending problem, and so it's very popular to talk about tuition pricing and costs on to the student, but that's fundamentally a symptom of costs at the university and a spending addiction that continues to snowball,” said Michael Horn, co-founder of the Clayton Christensen Institute for Disruptive Innovation.

Witnesses and lawmakers said improvements need to be made in the transparency around the true cost of tuition, which some schools frequently mischaracterize to students who then take out more loans they will later have to pay back.

Several bills have been introduced in the Senate and House seeking to require more transparent and direct information on the cost of attending colleges, what financial aid packages are and how it affects the total and push them to not take out more loans than they need.

Lawmakers highlighted Pell Grants, government funds that typically go to students with the greatest financial need, and the stagnation of the amount given despite higher costs for tuition and inflation. The maximum Pell Grant award for the upcoming academic year is $7,395.

When the grants were first enacted, they covered a majority of the cost to attend college, but today only make up for about 30%, forcing students coming from low-income backgrounds to take on more debt to pay for college.

Cellini told lawmakers that an expansion to the maximum reward to Pell Grants to keep pace with inflation and tuition increases would help more students access college education.