Skin in the game could incentivize colleges to keep costs down

With tuition and student debt soaring dramatically over the last decade, many families are sitting around their kitchen tables wrestling with how to pay for college. In fact, the number one concern of U.S. parents is being able to pay for their kid’s college education, according to a recent Gallup poll.

We’ve seen tuition go up by 28 percent since the Great Recession. That’s more than twice the rate of inflation. By reauthorizing the Higher Education Act (HEA) — legislation that shapes the structure of financial aid — Congress can make sure that more young people can afford to get the college education that’s often critical to land work with decent pay in our 21st century economy.

{mosads}This is a laudable goal. Investing more in financial aid is arguably the most important part of our work on reauthorizing HEA.  But Congress must also work to make college more affordable by incentivizing colleges and universities to keep costs down. I’m testifying before the Senate HELP Committee this week to explain why schools should share this responsibility.

Here’s an idea that could ensure accountability for students and taxpayers: let’s tie a school’s access to taxpayer-funded Title IV aid to its performance. The government could use Census data to set a reasonable bar to determine whether a school’s graduates are better poised to repay student loans than someone with just a high school diploma. This makes sense because students who went to college are typically better off in the workforce than students who did not, and this is a bar worth setting. It should also reward institutions that do the best job of connecting their students to good outcomes.

In the worst cases, taxpayers shouldn’t be required to continue funding institutions that fail to deliver a quality education at an affordable price. Schools that flat out fail to prepare students to enter the workforce while drowning them in debt should also be required to provide financial relief to borrowers that they did not serve. Congress should make sure that these schools are accountable to students who, in many cases, are acting as guinea pigs by taking on tens of thousands of dollars in student debt without clear information about outcomes. Putting schools on the hook for their graduates’ success could also encourage colleges to focus resources where they should be going — student instruction.

All of this said, requiring institutions to have some skin in the game should not be a substitute for existing protections, like the 90/10 or Gainful Employment rules. These rules exist to prevent the most predatory actors from taking advantage of students. Additionally, these schools also must not threaten to pass the so-called “cost” of risk sharing onto students in the form of higher tuition or fees. Congress should do the right thing by strengthening existing policies that prevent institutions from evading rules meant to protect students.

Finally, Congress should limit the number of students that failing schools are able to enroll until they improve. Allowing schools to boost enrollment in failing programs puts the bottom line of institutions above the quality of students’ educational experience. This is wrong, and Congress must put an end to it.

It’s time for Congress to ask colleges to step up to the plate by ensuring they offer students an education of good value at an affordable price. Modernizing the Higher Education Act to include some of these reforms would go along way to keeping costs and debt levels down for students and families and be a boon for our broader economy.

Wang is the policy director of Young Invincibles, a nonpartisan policy and advocacy organization for Millennials.