A presidential proposal could soon change the future of federal financial aid and how much of it Duke receives.
President Barack Obama released a plan last week proposing to increase the affordability of college and to reward colleges that provide the best value for the education they provide. Obama outlined the details of the proposal—titled “President’s Plan to Make College More Affordable: A Better Bargain for the Middle Class”—to a crowd at the University of Buffalo in New York. The plan outlines the development of a rating system for institutions of higher education and rewards higher-rated schools with more federal financial aid.
“Having some transparent rankings of colleges and universities that will help students and their families make informed choices is in general a good thing, but the devil is in the details of how those rankings come to be,” said Steve Nowicki, dean and vice provost of undergraduate education.
Under the new plan, higher ratings will be given to schools that are financially accessible, affordable and have better outcomes, according to a fact sheet on the White House website. Accessibility will depend on factors such as the percentage of students at the school receiving Pell grants, and affordability will be based on average tuition, scholarships and loan debt of students. Outcomes will be measured by graduation and transfer rates, as well as the earnings of graduates and advanced degrees they later procure.
Nowicki noted concern with the provision of the plan that rates the earnings of graduates, saying that it would discourage colleges and universities from training students for valuable professions with lower incomes.
“That would incentivize schools to stop training teachers, to stop training artists, to stop training social workers and to only train financiers or bankers,” Nowicki said. “Rather, I think it is important to consider the employability of students who graduate from a place like Duke… [or] some aspect like job satisfaction.”
Alison Rabil, assistant vice provost and director of financial aid, also said the aspect of the proposal rating graduates on their earnings would be undesirable.
“I think it’s injurious to place the value of an education on the job [you have] when you’re done,” Rabil said. “We don’t graduate accountants—we graduate people who are fully capable of becoming accountants. That’s not what we’re about.”
Regardless of students’ postgraduate earnings, Rabil noted that she is not concerned that Duke would lose any of the aid that it currently receives because of its high standing in other categories, such as low average debt and high graduation rates.
“I don’t think it will adversely affect us. I don’t know if it will affect us at all,” Rabil said.
Nowicki noted the evaluation of students’ loans as another area of issue, given that families may take out loans for reasons other than education, or as a means of retaining existing assets such as second homes.
“We don’t have control over what families do with their own finances,” he said. “What are you really measuring?”
The Pay As You Earn program will also be expanded as part of the plan, making all students with loans eligible for capping their loan payments at 10 percent of their monthly income and expanding the number that are enrolled in the program, as expressed on the White House fact sheet.
Rabil said that while federal aid is helpful and a significant piece of the financial aid system at Duke, it does not make or break whether students can afford to come to Duke or complete a degree. If Duke students do not receive federal aid, the University would find ways to compensate in other ways, she added.
“We’re really in a privileged niche. There are not that many schools that can do as much as we can do with the aid they have and federal aid is much more critical [for them],” she said. “We rely on it, we definitely need it, but it’s not the difference of a student enrolling or not and graduating or not.”
Nowicki also noted the value in Duke’s promised financial aid to students is currently greater than its allotted finances, and that the Duke Forward campaign is seeking to replenish funding.
He added that attaching the system to Pell Grants should be a cautious maneuver, as initiatives like No Child Left Behind have in the past led to the punishing of schools and teachers that, despite fervent efforts to achieve numerical thresholds, come up short.
“Institutions that are trying to do the right thing but are not yet succeeding at it are actually punished when they should be rewarded for trying," he said. "You have to ask, how can we measure what schools are trying to do as opposed to just taking some simple-minded method and having some simple response.”
He compared the higher education system to a diverse ecosystem, saying that the wide range of types of institutions—liberal arts colleges, technical schools, state programs and private research universities, among others—must be evaluated within their own contexts. The ratings system should avoid generalizing and be mindful of the goals and intentions of each individual school.
“A challenge is that the cost of higher education discussion has to acknowledge the great diversity of institutions,” Nowicki said. “It makes it more complex, but it is more complex.”
The plan states that the college ratings will be completed by the Department of Education by 2015, after the Department holds public hearings to receive input from students, parents, state leaders and college presidents.