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Data and Data Systems

On Accountability and Audience: Why We Didn't Have a Funk Parade Hackathon

June 27, 2014

Crafting high-quality civic technology — projects and tools designed with social impact in mind — requires thought, creativity, and intentionality — the strength to ask:

“Will this project actually have social impact? Is it being designed for the social/cultural/political context in which it will be implemented? And if not, what steps do we need to take and what people do we need to substantially involve to get there?”

Our approach to community-building in the name of civic tech should be the same.

College Blackout

  • By
  • Amy Laitinen,
  • Clare McCann,
  • New America Foundation
March 11, 2014
Ever-rising college costs, more than $1 trillion in outstanding federal student loan debt, and graduates doubtful that they’ll be able to earn enough to repay their loans have driven college value to become a major concern for most prospective students. Yet students, families, and policymakers are finding their questions can’t be answered—because the higher education lobby has fought to keep it that way.

Cohort Default Rates Provide Insights into Outstanding FFEL Loans

October 23, 2013

Updated 10/24/2013 6 PM: This post was updated to include a better description of the Asset Backed Commercial Paper conduit program.

Hidden amidst the shutdown furor was the annual release by the U.S. Department of Education of new student loan default rates. The data measure how many borrowers who entered repayment in a single year defaulted on their federal student loans within two or three years. This year, the data show that 10 percent of borrowers default within two years of entering repayment and 14.7 percent do so within three years. As has historically been true, for-profit and community colleges had the highest default rates, well above those at public or private non-profit 4-year schools.

The overall trend here is not pretty. This is the sixth consecutive year in which two-year default rates increased, and they are now at the highest they’ve been since 1995. But with the growth in borrowing, this means there are significantly more people entering repayment and defaulting. More than 1.1 million more borrowers entered repayment in fiscal year 2011 compared to two years prior, and 10 percent defaulted, as compared to 8.8 percent in fiscal year 2009—an increase of more than 230,000 defaulters. Over those two years, enrollment in postsecondary education also increased, by more than 590,000 students, while the number of borrowers who entered repayment skyrocketed by 1.8 million students. See the chart below for more specific default rate figures.

2yrcdr.png
 

Source: U.S. Department of Education

But beyond the school-based cohort default rates, the Department of Education also released some other interesting default rates: those for guaranty agencies and lenders under the Federal Family Education Loan (FFEL) Program.

FFEL is the now-defunct program replaced by the Direct Loan Program. Vestiges of the program remain, however, in the form of more than $400 billion in outstanding loans issued before the change. Under FFEL, government-backed loans were issued through a set of lenders, and 35 private non-profit organizations called guaranty agencies performed various administrative tasks, including providing federal default insurance to the lenders.

Default rates for lenders don’t carry much weight – there are no sanctions associated with high default rates. Each lender has a calculated two-year and three-year default rate, both for loans they originated and for loans they currently hold. Current lender two-year default rates range from 0 percent for over 500 lenders, including many who don’t hold any loans anymore, to a shocking 89 percent for Citibank, which still holds about 2,000 loans. Among the largest FFEL loan-holders (the 28 companies that hold 10,000 or more loans), rates average about 7 percent. Sallie Mae, the largest FFEL lender, has a default rate of 4.1 percent on the nearly 27,000 loans totaling almost $20 million it still holds from this cohort.

And the Department holds one set of loans with a very high default rate. During the financial crisis, in order to help FFEL lenders continue to make new loans, the Department of Education set up a financing vehicle called the Asset Backed Commercial Paper conduit program. The Department purchased some of the participants' FFEL loans, including all loans that were more than 210 days delinquent, as required by the contract. Those loans, now held by the Department but purchased through the conduit, carry a two-year default rate of 51.7 percent and a three-year rate of 56.6 percent. The requirement that the Department purchase those delinquent loans explains the abnormally high default rate.

The guaranty agency default rates provide another way of judging the results in the FFEL program. When a FFEL borrower defaults, the lender can file a claim to a guaranty agency to recover most of the outstanding loan balance. Then the guaranty agency—a true middleman—uses federal money to reimburse the lender, and the Department of Education reimburses those costs (this is known as “reinsurance”). But guaranty agencies with high default rates can’t receive the full amount of reinsurance reimbursement. If guaranty agency rates are below 5 percent, they get a 95 percent reimbursement; for rates between 5 percent and 9 percent, 85 percent; and for default rates that are 9 percent or higher, 75 percent.

As it turns out, at least when it comes to two-year cohort default rates, five of the reported guaranty agency default rates exceeded 9 percent for the 2011 cohort – Student Loan Guarantee Foundation of Arkansas, Texas Guaranteed Student Loan Corporation, Higher Education Assistance Authority (Alabama and Kentucky), Florida Department of Education, and Oklahoma College Access Program. Still, in every one of those states except Oklahoma, the statewide student two-year and three-year cohort default rates are even higher than the guaranty agency two-year default rate.

And although some guaranty agencies are private non-profit organizations, while others are state-based and may receive some state resources, there doesn’t seem to be much difference in their performances. The non-profits’ average default rate is 6.2 percent – effectively identical to the 6.3 percent default rate among state-based guaranty agencies.

Two-year cohort default rates don’t set a particularly high bar, as it stands, either for guaranty agencies and lenders or for students. Guaranty agencies are not held accountable for their borrowers’ defaults. Schools are – for rates at or above 25 percent three years in a row, or higher than 40 percent in one year, schools lose eligibility for Title IV federal financial aid – but not as much as they once were. The last time rates reached about 10 percent, in 1995, more than 200 schools were sanctioned by the Department of Education. Since then, the number of schools subject to sanctions has dropped precipitously – to just 8 colleges for the 2011 cohort. The 2010 cohort – the most recently available class of students – illustrates the limitations of the default rate. Consider that schools’ two-year default rates jumped from 9.1 percent to 14.7 percent when a third year was included in the window. And default rates in a cohort (unsurprisingly) continue to grow every year – even outside the 2-year or 3-year window.

Thanks to a change enacted in the 2008 Higher Education Act reauthorization, cohort default rates will get moderately stronger next year as the Department finally transitions to relying on three-year rates to determine whether a disconcertingly large share of a school’s students are unable to pay their loans. This year, over 130 schools would be in danger of facing sanctions if their default rates did not change in the third year of calculations (to date, only two official three-year default rates have been calculated). The hope is that a longer window would be harder for schools to game by utilizing temporary measures such as deferment or forbearance to avoid default up to the edge of the two-year window.

Default rates are by no means a perfect measure of a school’s value to students, but they are part of a scaffolding of restrictions on colleges – a sort of baseline quality metric to help students avoid low-value schools and to avert wasted taxpayer dollars. The numbers released by the Department offer valuable insights into students’ struggles.

Reporting Burden in Higher Education: The Case of the Clery Act

October 16, 2013
University of Denver Campus Safety Badge

Members of both political parties have decried two seemingly contradictory things in higher education. They want better information to inform students, families, taxpayers, and policy makers – but they also want fewer burdens on institutions, which some say increase costs, stifle innovation, and move schools’ focus away from the primary mission of educating students. While these are both laudatory goals, they appear, at face value, to call for action in opposite, conflicting directions. Students and institutions are left with the worst of both worlds—too much data, reporting, and burden and not enough usable information.

To escape this seeming contradiction between reporting burden and access to information, public discourse and debate should shift away from talking about burden in the generic, abstract sense to the specific ways in which it affects institutions and policy makers. So, let’s look at one of the most heavily cited sources of burden: consumer disclosures. In a 2013 GAO report, this category, which includes campus safety and security reports, was the most frequently cited as burdensome in interviews of experts and higher education officials.

The campus safety component of these disclosures stems from the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, first passed in 1990 as the Student Right-to-Know and Campus Security Act. The law requires colleges to annually report campus security statistics, maintain a public log of recent crime, and provide timely warnings of ongoing threats to students.

The provision grew out of campus safety advocacy efforts led by Connie and Howard Clery, who founded Security On Campus, Inc. (now the Clery Center for Security on Campus) after the brutal and shocking 1986 rape and murder of their daughter Jeanne in her freshman dorm at Lehigh University. The subsequent investigation revealed lapses in security oversight by the university. Her murderer, Josoph M. Henry, a fellow student she did not know, was able to gain access to her dorm by passing through three automatically locking doors that had been propped open with boxes for convenience.  The Clerys also discovered that there had been 38 violent crimes on campus over the prior three years, but no laws at the time required the university to report them to students or prospective students.

After the passage of multiple state laws, the 1990 federal bill was introduced in Congress by Representative William Goodling (R-PA) in response to the Clerys’ advocacy efforts. In introducing the bill, Goodling testified: “This resolution will ensure the Department of Education gives priority status to this important responsibility [of protecting students].... Colleges are trying to hide [crime incidents] because they're in a very competitive business. There's no question they are putting students in danger if they try to cover up the crime that's going on in order to recruit students."  In 1998, Senator Arlen Specter (then R-PA) sponsored legislation tightening the reporting requirements and officially renaming it after Jeanne Clery. At the time of the bill’s passage, Specter spoke at a conference with the Clerys in which he emphasized the importance of campus safety and the lives that would be saved by the bill.

The evidence on whether the act has actually led to a decrease in campus crime in the decades since its passage is mixed. There were no reliable figures before the legislation, and the crime rate fell broadly across the U.S. over the same time period. And although a significant percentage of senior safety and security officials in one study said the law helped bring about improvements to their policies and procedures, most did not see the law as being specifically related to a decrease in crimes in and around campus.  More importantly, it does not seem like students and perspective students are actually using the specific reports and information the law requires. Previous studies and surveys show that the majority of students were not aware of the law and had not read the annual report that it requires, and only 10 percent of students said that they had factored campus crime statistics into their choice of school.

But colleges and universities that don’t meet the law’s stringent disclosure requirements do face significant penalties for violating the act. Each violation is punishable by a fine up to $35,000 per violation and possible loss of Title IV eligibility for the institution. In 1998, Eastern Michigan University was fined $350,000, at that point the largest-ever penalty for violating the law, for failing to quickly and accurately issue warnings after the murder of a student Laura Dickinson in her dorm room. Other institutions, including USC    , have been accused of reporting incidents inaccurately to lower the overall numbers of violent crimes appearing in the log and reports mandated by Congress.

The Clery Act was a strong response by lawmakers to a personal and shocking tragedy. Support for the bill was overwhelming – it passed the House without objection, and the Senate on a voice vote.  The law is not likely to disappear anytime soon – in fact, members have Congress have only piled on more and more requirements to the law. For example, the 1998 reauthorization required institutions to report off-campus crimes that occurred in close proximity to the institution. This led to concern from some institutions on where exactly to draw the line of “close proximity,” given that any tragic event near campus but outside the specified area could bring further negative attention to a school’s policies. Industry organizations also complain that the frequent changes to the law (four in 10 years following its passage) made it nearly impossible to systematically collect and accurately report the information.

Despite the burden and mixed evidence on its utility to students and their families, then, the Clery Act seems deeply entrenched as a key reporting requirement. And yet, key higher education questions for students, families, and the nation – for example, accurate graduation rates, complete student debt figures, and students’ post-education employment prospects – still can’t be answered. And yet, lawmakers have resisted asking schools to report those outcomes, hiding behind the generic guise of burden.

The difference is that campus crime advocates like the Clerys have an evocative story, a powerful movement, and personal champions on Capitol Hill behind them. That combination was enough in this case to overcome the higher education lobby’s pleas for relief from reporting burden. Meanwhile, students’ voices and their families’ interest in the unknowable information about students’ outcomes are drowned out by lobbyists. That’s why the reporting requirements under the Clery Act will be reliably maintained – and other critical questions of the value of college have been shoved to the back.

Shutdown Got Your Data? Check Out Our Federal Education Database

October 15, 2013
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The federal government has been officially shut down for over two weeks now, and the impact has been real: furloughed employees across the country, Head Start programs shut down (and some reopened), and confusion and delays in many federal programs. But for education experts and data geeks, another issue has been highly inconvenient, if less severe: the disabling of federal education data websites.

Fortunately, Higher Ed Watch’s sister initiative, the Federal Education Budget Project, maintains one of the most comprehensive federal education databases in the country for every state, school district, and institution of higher education. The data are collected from state and federal sources and updated regularly. The higher education data cover more than 7,500 institutions and all 50 states, plus Washington, D.C. and Puerto Rico, and include:

  • Tuition and fees, price, endowment, and net price for all and for low-income students;
  • Federal finance data on student loan recipients and disbursements for schools, as well as Pell Grant and other federal aid data;
  • Student demographics, including full-time, part-time, and graduate student enrollment, as well as racial subgroups;
  • Outcomes as defined by graduation rates, retention rates, student loan default rates, and repayment rates; and
  • The share of students receiving federal, state, and local financial aid, as well as the average award size.

Check it out now, and until the shutdown is over! For some background on the data and on other education policy topics, check out our Background & Analysis pages.

Shutdown Got Your Data? Check Out Our Federal Education Database

October 15, 2013
Publication Image

The federal government has been officially shut down for over two weeks now, and the impact has been real: furloughed employees across the country, Head Start programs shut down (and some reopened), and confusion and delays in many federal programs. But for education experts and data geeks, another issue has been highly inconvenient, if less severe: the disabling of federal education data websites.

Fortunately, Early Ed Watch’s sister initiative, the Federal Education Budget Project, maintains one of the most comprehensive federal education databases in the country for every state, school district, and institution of higher education. The data are collected from state and federal sources and updated regularly. The PreK-12 data for more than 13,700 school districts and every state include:

  • Federal funding information, like per pupil expenditures, Title I and IDEA allocations, and school lunch awards;
  • Pre-K information for state-funded pre-K, Head Start, and special education preschool grants;
  • Demographic information on enrollment and racial, economic, and academic subgroups; and
  • Achievement data for math and reading in 4th grade, 8th grade, and high school, both for state standardized tests and the NAEP exam.

Check it out now, and until the shutdown is over! For some background on the data and on other education policy topics, check out our Background & Analysis pages.

Shutdown Got Your Data? Check Out Our Federal Education Database

October 15, 2013
Publication Image

The federal government has been officially shut down for over two weeks now, and the impact has been real: furloughed employees across the country, Head Start programs shut down (and some reopened), and confusion and delays in many federal programs. But for education experts and data geeks, another issue has been highly inconvenient, if less severe: the disabling of federal education data websites.

Fortunately, Ed Money Watch’s parent initiative, the Federal Education Budget Project, maintains one of the most comprehensive federal education databases in the country for every state, school district, and institution of higher education. The data are collected from state and federal sources and updated regularly. The PreK-12 data for more than 13,700 school districts and every state include:

  • Federal funding information, like per pupil expenditures, Title I and IDEA allocations, and school lunch awards;
  • Pre-K information for state-funded pre-K, Head Start, and special education preschool grants;
  • Demographic information on enrollment and racial, economic, and academic subgroups; and
  • Achievement data for math and reading in 4th grade, 8th grade, and high school, both for state standardized tests and the NAEP exam.

The higher education data cover more than 7,500 institutions and all 50 states, plus Washington, D.C. and Puerto Rico, and include:

  • Tuition and fees, price, endowment, and net price for all and for low-income students;
  • Federal finance data on student loan recipients and disbursements for schools, as well as Pell Grant and other federal aid data;
  • Student demographics, including full-time, part-time, and graduate student enrollment, as well as racial subgroups;
  • Outcomes as defined by graduation rates, retention rates, student loan default rates, and repayment rates; and
  • The share of students receiving federal, state, and local financial aid, as well as the average award size.

Check it out now, and until the shutdown is over! For some background on the data and on other education policy topics, check out our Background & Analysis pages.

House Republicans Fight to Keep Loophole in For-Profit Colleges’ 90/10 Rule

October 7, 2013

Update 10/15/2013 2 PM: This post was edited to reflect that the proposed reform would include Tuition Assistance in the 90 percent calculation, not the 10 percent.

Congress failed to reach an agreement on funding the government for fiscal year 2014, which began on October 1, 2013, shutting down the federal government. That high-stakes budget battle has overshadowed a different disagreement between the House and Senate that could have a big effect on education benefits for members of the military – and for-profit colleges.  

The disagreement is on the Department of Defense Appropriations Act, one of the annual bills that funds the DOD. The House passed the bill back in July and sent it to the Senate. The Senate Appropriations Committee passed the bill on August 2 – but included a change to an existing test for colleges called the 90/10 rule.

The 90/10 rule states that private for-profit colleges must get at least 10 percent of their total revenue from non-federal sources, namely tuition collected from the student or his family. Failure to do so can result in losing access to Title IV funds. The 90 percent includes federal Title IV aid – Pell Grants, federal student loans, and more. It does not include nearly $12 billion spent annually on servicemembers’ and veterans’ education benefits through the Department of Defense or the Department of Veterans Affairs (VA), nor does it include more than $25 billion annually lost to tax expenditures.

The new proposed language in the DOD fiscal year 2014 bill would change some of those exclusions. Military education assistance for spouses of servicemembers or off-duty training and education for servicemembers themselves would be included in the 90 percent calculation. Additionally, for-profit colleges couldn’t use any of that Tuition Assistance (DOD) funding to advertise, recruit, or market to students.

All in all, the provision is pretty limited. The Department of Defense spends only about $517 million per year on these benefits, a small share of the DoD budget or even of federal higher education funding. VA benefits, the much larger pot of money that includes the Post-9/11 GI Bill, among other education provisions, would not be affected by the new NDAA provision.

And because there are no publicly available data that provide the institution-level breakdown of the dollar amount of DOD and VA benefits spent, it’s impossible to know exactly how many schools might be affected. A paper published by financial aid expert Mark Kantrowitz this summer used national averages to estimate that adding in DOD and VA benefits would add about 2 percentage points to a school’s 90/10 amount (for example, a school that received 88 percent of benefits from federal Title IV sources under the current system would receive 90 percent when military benefits were added in. Click here to search for a school and see its 90/10 percentage, alongside other data).Those effects could be more or less severe, depending on the school’s reliance on military student benefits.

Kantrowitz also suggested the effects of banning the use of federal money for marketing would be far more drastic. Since the largest for-profit schools spend about 20 percent of their total revenue on advertising and recruitment, he argues it would effectively increase the threshold for schools to 80/20. Again, though, the largest for-profit schools may not be a good sample to judge the effects on all schools subject to 90/10 – for some schools, it could be far less than 20 percent, or for some schools, even more.

Last week, four Republican members of the House – John Kline, Chair of the Education and Workforce Committee; Jeff Miller, Chair of the Veterans’ Affairs Committee; Buck McKeon, chair of the Armed Services Committee; and Bill Flores, chair of the Economic Opportunity Subcommittee on the Veterans’ Affairs Committee – sent a letter to key members of the House Appropriations Committee disparaging the Senate provisions. They asked that the new restrictions be removed before the defense appropriations bill passes the House again.

Their reasoning?

The marketing provision implies schools are “preying” on unsuspecting members of the military and their families, and the 90/10 rule is both unproductive and unable to account for the fundamental differences between Title IV and military education benefits.

They aren’t the first to suggest concerns with the 90/10 rule, writ large. The rule is intended as a kind of rough, imperfect metric of quality – schools that aren’t able to garner at least 10 percent of revenue from non-federal sources have presumably been labeled by the market as not worth paying for. But it can have other, unintended effects, mainly discouraging schools from serving low-income students or compelling them to raise tuition. Since the 90/10 rule includes no measure of outcomes or of how well the school serves those students, it may just be leading to the exclusion of students who can’t contribute the school’s 10 percent of non-federal revenue. (Incidentally, better data in the form of a student unit record data system could allow for better quality measures and make the 90/10 rule irrelevant.)

But including military benefits within the 90/10 rule is a no-brainer, whether or not the rule is revised to avoid these unintended consequences or to incorporate additional quality measures. The question at hand is whether students and families are willing to shell out for a particular school at which many students receive federal aid – at least 10 percent of the school’s total fiscal intake. DOD and VA benefits, as federal benefits for students, fall squarely on the 90 percent side of the equation. Failing to include them creates a perfect loophole for exploitation of servicemembers and veterans by schools that can’t otherwise meet a basic financial test.

The Federal Education Budget Project, Ed Money Watch’s parent initiative, maintains a comprehensive database that includes data on the 90/10 rule for all institutions of higher education subject to the rule, as well as other cost, finance, demographics, and outcomes data. Click here to search for your school or here to download the institution-level research file.

New School District-Level Pre-K Data Reflect Drop in State Spending

September 24, 2013
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This post also appeared on our sister blog, Ed Money Watch.

In February’s State of the Union address, President Obama outlined a new proposal to expand state pre-K programs to all low- and moderate-income children across the country. The federal funds would require state matching funds, and the state and federal dollars would both be allocated to school districts to expand access to pre-K for eligible children.

In many states, though, it’s impossible even to know the answers to basic questions about pre-K. Because pre-K is often not tracked, or not tracked at the school district level, most principals can’t say how many of their incoming kindergartners attended pre-K, and many policymakers don’t know how many children in their state have access to early education.

New data released in a joint effort by the Federal Education Budget Project (FEBP) and the Early Education Initiative, both of the New America Foundation, begin to answer some of these questions. Released for the first time last fall, FEBP and Early Education Initiative staff collect and analyze state- and school district-level pre-K funding and enrollment data where available. The latest update includes information from the 2012 school year, as well as data for earlier years that states had not previously made available. Check out your state or school district in our Funding Per Child widget below:

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