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Behind Closed Doors in Washington, Here’s What Colleges Fight For

Think of them as College, Inc. Like most industries, higher education prefers less regulation (and accountability).

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Education Secretary Betsy DeVos recently moved to weaken the authority of accreditors to oversee colleges.Credit...Pablo Martinez Monsivais/Associated Press

Anyone familiar with the back rooms of Washington politics knows about the industry associations. Staffed by lobbyists, these groups usually pursue different versions of the same agenda: ensuring their clients’ access to the public treasury while shielding them from public regulation. Energy companies lobby for lucrative write-offs on equipment and lax restrictions on pollution. Wall Street firms fight for the freedom to market risky financial products while paying low taxes on the profits. And so on.

Less well known is that industry associations also represent the interests of your alma mater or favorite local college. They do what lobbyists do, working behind the scenes to water down legislation — most recently, provisions that would hold colleges accountable if too few students graduate, get jobs and pay off loans.

The legislation in question right now is a new version of the federal Higher Education Act, a law regulating educational matters as varied as student loan interest rates and how colleges adjudicate claims of sexual assault. The Department of Education is the single biggest college financier, dispensing $120 billion per year in federal grants and loans.

Student loans are a growing fact of American life, topping $1.6 trillion in outstanding balances this year. Loans can be valuable — if students are able to pay them back. But every year, one million people default on their student loans for the first time. Often, it’s because they didn’t graduate, and so lacked the diploma needed to get a well-paying job. Last year, 231 four-year colleges graduated less than 25 percent of their first-time-in-college, full-time students within eight years of enrollment. An additional 615 colleges reported rates below 50 percent.

Those ranged from large for-profit chains like the University of Phoenix to struggling liberal arts colleges. But they all had one thing in common: They were approved to receive federal funding by an accrediting organization. That’s because the federal government doesn’t directly regulate academic quality in higher education. It outsources the task to accreditors, nonprofit membership groups of colleges. These accreditors are paid fees — up to several million dollars — by the colleges seeking approval, much as ratings agencies are paid by investment bankers selling bonds. Member colleges also pay dues, and determine whom the accreditors hire to do the work. (It’s hard to ban someone when you’re all dues-paying members of the same club.)

The accreditors are not designed to be hard-nosed regulatory bodies and explicitly reject the idea that they are, yet they have been pressed into a high-stakes and difficult regulatory role. If a college has accreditation, students can pay tuition with federal grants and loans under Title IV of the Higher Education Act. If it doesn’t, they can’t. Losing Title IV aid is tantamount to a death sentence for a college, given how loan-dependent the higher education system has become.

Currently, accreditors have no bottom-line standards for college graduation and job placement rates. When a Wall Street Journal reporter asked if a college with a 10 percent graduation rate could do a good job, Belle Wheelan, the president of one major accreditor, said, “It can be a good school for those 10 percent who graduate.” Ms. Wheelan’s group also accredits colleges with even lower graduation rates, like for-profit South University Online (2 percent).

The proposed new version of the Higher Education Act, which was considered by the House education committee this month, would require accreditors to establish minimum benchmarks for student success in graduating and getting jobs, though it does not specify what they should be.

It allows for different standards for different types of degrees. It also allows for other measures of academic quality, as accreditors see fit. All it requires is some kind of minimum, somewhere. In fact, accreditors wouldn’t have to deny accreditation to colleges that miss the benchmarks.

Though this proposed revision might seem toothless, it has the potential to have significant effects given colleges’ dependence on federal grants and student loans. College industry associations have responded forcefully, denouncing the measure as “deeply problematic” and an “unprecedented federal intrusion.” Terry Hartle, chief lobbyist for the industry’s largest trade group, the American Council on Education, asserted that it would actually “increase the cost of doing business for most institutions,” because of the administrative burdens involved with tracking how many students graduate and get jobs while protecting their civil rights.

The trade group of regional accreditors also weighed in, complaining that the benchmarks would have to be “numeric.” If one of the group’s members decided that, say, 10 percent was an adequate graduation rate, it said, the education secretary could reject the benchmark as “too low.” “This is a responsibility that should not be in the purview of the federal government,” the group declared.

The college lobby has an ally in the Trump administration and its secretary of education, Betsy DeVos, who recently moved to weaken the authority of accreditors to oversee colleges, on the theory that students would benefit from more free market competition.

The debate echoes the last time Congress rewrote the Higher Education Act, in the mid-2000s. President Bush’s secretary of education, Margaret Spellings, had a different attitude toward accreditation than Secretary DeVos, in that Ms. Spellings wanted accreditors to enforce standards. The industry revolted, arguing that such policies would change accreditation from “a collegial activity to a regulatory one.” Since President Bush signed the current Higher Education Act into law in August 2008, total outstanding student loan debt has increased by $946 billion.

In a time when presidential aspirants are rolling out competing proposals to ban public college tuition outright, it can be hard to focus on a congressional committee considering whether to direct a federal agency to direct a group of regulators to direct a group of colleges to try to meet some standards. But the college lobbyists are extremely interested in this issue, because that’s how industry associations succeed: by manipulating the minutiae of federal lawmaking, far from the heat and light of partisan politics.

The greatest achievement of the college lobby may be its near-invisibility. In general, people like colleges, especially the ones they attended, or the ones that sponsor the local football team. They don’t think of colleges as being like carmakers or banks — as an industry with financial self-interest. The college industry goes to great lengths to maintain this image, referring to itself as a “community.”

But when it comes to the hard business of subsidies and regulation, there’s not much difference. Congress will have to decide whether an industry that receives enormous public subsidies should be accountable for helping students graduate and get good jobs. If it doesn’t, the future of college graduation and debt could look much like the past.


Kevin Carey directs the education policy program at New America. You can follow him on Twitter at @kevincarey1.

A version of this article appears in print on  , Section B, Page 6 of the New York edition with the headline: In Back Rooms, College Inc. Clamors for Access to Cash. Order Reprints | Today’s Paper | Subscribe

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