Where Secretary DeVos Gets It Right

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Last December, Secretary of Education Betsy DeVos spoke with college leaders at the American Council on Education and delivered some of her most detailed remarks to date regarding higher education. Her primary message? “Like all of education, higher education is due for a rethink.” While we may have areas of disagreement with the Secretary, we wholeheartedly agree that our nation’s higher education system should be reformed to serve today’s students better.

As the Secretary stated in her remarks, “Ultimately, our focus is on students, lifelong learners of all ages who want successful careers and meaningful lives. Let's keep students—our country's future—at the center of every conversation and everything we do.” In the last decade, our economy has changed, the demographics of the average-college going student have changed, the cost of college has changed, and yet our higher education system has largely stayed the same. There’s a lot at stake, and we need a comprehensive overhaul of federal higher education policy to make sure students—and taxpayers—are getting a return on their investment.

Below, we have highlighted specific comments from Secretary DeVos that we believe identify a real policy need in higher education—along with potential solutions that aim to address each of the issues she identified.

Secretary DeVos: “How can every higher ed institution embrace and support innovation and do so without exposing students and taxpayers to unreasonable risk?”

Why it matters: In the last decade, the need for a college education or training beyond high school to enter the workforce has drastically increased: the number of employed Americans with a high school education or less has decreased by nearly 3 million people—despite nine straight years of economic growth.1 While change is needed to ensure we are meeting the needs of tomorrow’s workforce, expanding opportunity by embracing innovation in education cannot come at the expense of exposing taxpayers and students to low-quality and ineffective programs. By shifting our system toward a focus on outcomes rather than emphasizing process considerations and input metrics, innovation and quality assurance can happen concurrently.

Our idea to solve the problem: To create a more nimble system for providing access to federal financial aid for students attending innovative short-term programs, the higher education system should look to the charter school authorization process as a model. One way is to make the US Department of Education (Department) the “authorizer” that works to ensure that only quality, necessary short-term programs receive federal funds. And before institutions get access to the spigot of taxpayer dollars that flow to higher ed programs, they should have a proven record of success, meaning they are likely to already be funded privately by companies, foundations, or other donors. These programs should show they are (1) good at serving students from less affluent socioeconomic backgrounds—particularly if they want to access Pell Grants, (2) demonstrating good student outcomes, like graduation, job placement, and strong earnings, (3) meeting the needs of the economy, and (4) continuing to succeed by being reviewed every few years for ongoing effectiveness.

Read our full policy brief here.

Secretary DeVos: “We know that higher education is about more than job training, but let's be honest: almost every student who earns a degree expects some kind of future in the labor market.”

Why it matters: Secretary DeVos is right—by the year 2020, 65 percent of jobs will require education of some kind beyond high school. Not only will more degrees benefit the labor market, but they also provide great individual returns. To ensure all students have the opportunity to earn a good life, we need to ensure our higher ed system isn’t consistently leaving students worse off than if they had never started college in the first place. On average, college graduates earn nearly twice as much over the course of their lifetime in comparison to those who never obtained a degree.2 But not all higher education programs are created equal. One out of every 10 career training programs leave their graduates earning below the federal poverty line. That’s a salary of less than $12,140 per year.3

Our idea to solve the problem: If Congress wants to ensure that it is investing federal tax dollars in programs that actually benefit students, it should prohibit the use of federal grants or loans at postsecondary programs where most graduates earn below the federal poverty rate (currently $12,140 a year). If a college program leaves most of its graduates living in poverty, why is the government paying for it?

Read our full policy brief here.

Secretary DeVos: “We aim to restore shared responsibility in higher education oversight and to encourage new approaches and new partnerships.”

Why it matters: We agree that there is a need for some shared responsibility of both the institution and the student in the pursuit of a quality degree. The federal government invests nearly $130 billion in higher education in grants and loans—not counting benefits like tax credits—each year to ensure Americans can get the degrees and skills they need to succeed in the 21st century. But right now, only students and taxpayers bear the responsibility and negative effects of poor-quality education programs—institutions bear no financial burden for programs that fail to prepare students for success or that leave students unable to earn enough to pay down their loans. This is why there has been growing conversation about whether institutions, in addition to taxpayers and students, should also have some “skin-in-the-game” for how well their students perform. Since current risk-sharing proposals primarily focus on student loans and the risk students bear when they are unable to pay back their loans, most of this policy discussion fails to account for the nearly $30 billion dollars that flow to institutions through the Pell Grant program each year. Failing to hold institutions accountable for massive federal investments leaves students and taxpayers on the hook when an institution fails to serve its students from low- and moderate-income backgrounds well.

Our idea for how to solve the problem: At four-year institutions, only 49 percent of first-time, full-time students who received a Pell Grant graduated from that institution within six years of entering.4 And even worse, the average institution graduates their Pell students at a rate seven percentage points lower than their non-Pell peers.5 And nearly 100 four-year institutions graduate their Pell students at a rate at least 20 percentage points lower than non-Pell students.6 To ensure that institutions are held responsible for the totality of the investments they receive through the federal student aid program, we propose including the Pell Grant program as a part of any risk-sharing policy. If an institution fails to graduate its students who receive Pell Grants, the institution should pay back a portion of the Pell Grant funds received, as this demonstrates their inability to get adequate outcomes for this federally-funded group of students.

Read our full policy brief here.

Why it matters: Accreditation is a seal of approval that is supposed to provide an important signal to students and families from the Department about whether a school offers a quality education. While college continues to benefit most who attend and earn a degree, the accreditation process still allows a significant number of low-performing institutions to fly under the radar, receiving the green light from their accreditors year after year even if they continuously show poor outcomes for the students they serve. And many of these poor-quality institutions are heavily concentrated within a small number of accreditors—begging the question, what can policymakers do to ensure that a few bad accrediting agencies don’t leave millions of students with little chance to graduate? Right now, the biggest problem is that accreditation is not effectively acting as a quality check because it is hyper-focused on process considerations more than outcomes. There are limited tools for measuring achievement by accreditor and accreditors rarely revoke approval, so it is unusual for institutions to feel the consequences of poor performance, and worst of all, no one is really responsible for watching the watchdogs themselves.

Our idea to solve the problem: To better ensure that accrediting agencies only give their stamp of approval to institutions that are serving students well, we should apply a “half & half” rule, requiring that at least half of an accreditor’s institutions show positive outcomes for at least half of its students. If an accrediting agency shows that a majority of its member institutions leave more than 50% of its students unable to graduate, earn more than an average high school graduate, and begin paying down their student debt within a reasonable time period, that agency should be at risk of losing its federal recognition that allows it to accredit institutions—allowing federal tax dollars to flow to institutions that fail to show a return on investment. Congress should require accrediting agencies to have over half of their member institutions perform above 50% on at least two of these three performance thresholds. If it doesn’t, it isn’t being a sufficient gatekeeper for federal funds.

Read our full policy brief here.

Secretary DeVos: “There should be many pathways because there are many types of students with many different interests and many kinds of opportunities with varying requirements.”

Why it matters: Secretary DeVos has recognized a critical reality about higher education—the types of students going to college these days are the most diverse in history. Not only are 37 percent of students 25 or older, but 22 percent are parents and 64 percent work while attending school.7 Just as important, colleges are enrolling greater percentages of students from low-income backgrounds, students of color, first-generation students, and students whose first language is not English. These changes are a positive development for all students and our country, but that means it is even more important for colleges to show they can serve these students effectively. Unfortunately, our postsecondary system has a lot of room for improvement: 55 percent of White adults have a college degree, compared to only 35 percent of Black and 28 percent of Latinx adults. At four-year public institutions, Black and Hispanic students are significantly less likely to graduate — at 25 and 15 percentage points respectively — than their white peers.8 And 80 percent of four-year institutions graduate their students who receive Pell Grants at a lower rate than their non-Pell peers.9

Our idea to solve the problem: Congress should make a concerted effort within the next Higher Education Act to prioritize closing the systemic completion gaps that exist for students from low-income backgrounds and students of color. One way to achieve that goal would be to establish a new grant program dedicated to providing additional resources to institutions that publicly commit to closing equity gaps. Congress should create an Equity Enhancement Fund (EEF) which would provide support for institutions serving a high proportion of students from low-income backgrounds to implement evidence-based strategies to improve completion rates among students the system has and continues to underserve. To adequately fund this effort, Congress should allocate a new stream of funding that is substantial enough to have a real impact.

Read our full policy brief here.


Higher education is more critical than ever before, and students and taxpayers deserve to know they are getting a real return on their investment. Student success over the next decade depends heavily on the decisions policymakers make today. It’s time for a federal higher education system that puts student outcomes first. We believe these ideas are a step in the right direction to make sure federal higher education policy is focused squarely on student success.

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  1. Robert Shapiro, “The new economics of jobs is bad news for working-class Americans—and maybe for Trump,” Brookings Institute, January 16, 2018, accessed on February 19, 2019. Available at: https://www.brookings.edu/blog/fixgov/2018/01/16/the-new-economics-of-jobs-is-bad-news-for-working-class-americans-and-maybe-for-trump/.

  2. Anthony P. Carnevale, Stephen J. Rose, and Ban Cheah, “The College Payoff: Education Occupations, Lifetime Earnings,” The Georgetown University Center on Education and the Workforce, 2011, Accessed on February 19, 2019. Available at: https://www2.ed.gov/policy/highered/reg/hearulemaking/2011/collegepayoff.pdf.

  3. United States, Department of Health and Human Services, “U.S. Federal Poverty Guidelines Used to Determine Financial Eligibility for Certain Federal Programs,” Updated on January 13, 2018, Accessed on February 19, 2019. Available at: https://aspe.hhs.gov/poverty-guidelines;  See also, United States, U.S. Department of Education, “Gainful Employment Information,” Released January 9, 2017, Accessed on February 19, 2019. Available at:  https://studentaid.ed.gov/sa/about/data-center/school/ge. This calculation uses median data for Gainful Employment graduates.

  4. Wesley Whistle and Tamara Hiler, “The Pell Divide: How Four-Year Institutions are Failing to Graduate Low- and Moderate-Income Students,” Third Way, Published on April 30, 2018, Accessed on February 19, 2019.  Available at: https://www.thirdway.org/report/the-pell-divide-how-four-year-institutions-are-failing-to-graduate-low-and-moderate-income-students.

  5. United States, U.S. Department of Education, National Center for Education Statistics, “IPEDS Survey Data,” Accessed on February 19, 2019, Available at: https://nces.ed.gov/ipeds/Home/UseTheData.

  6. Wesley Whistle and Tamara Hiler, “The Pell Divide: How Four-Year Institutions are Failing to Graduate Low- and Moderate-Income Students,” Third Way, Published on April 30, 2018, Accessed on February 19, 2019.  Available at: https://www.thirdway.org/report/the-pell-divide-how-four-year-institutions-are-failing-to-graduate-low-and-moderate-income-students.

  7. United States, U.S. Department of Education, National Center for Education Statistics, “Digest of Education Statistics,” Accessed on February 19, 2019. Available at: https://nces.ed.gov/programs/digest/d16/ch_3.asp.

  8. Shapiro, Doug, et al. Completing College: A State-Level View of Student Completion Rates (Signature Report No. 16a). National Student Clearinghouse Research Center, February 2019, Herndon, VA. Accessed on March 6, 2019. Available at: https://nscresearchcenter.org/signature-report-16-state-supplement-completing-college-a-state-level-view-of-student-completion-rates/

  9. Wesley Whistle and Tamara Hiler, “The Pell Divide: How Four-Year Institutions are Failing to Graduate Low- and Moderate-Income Students,” Third Way, Published on April 30, 2018, Accessed on February 19, 2019.  Available at: https://www.thirdway.org/report/the-pell-divide-how-four-year-institutions-are-failing-to-graduate-low-and-moderate-income-students.