Report: Higher Ed ‘Dropout Factories’ Need to be Held Accountable

A new report released from nonprofit advocate Education Trust is asking the US government to set expectations from colleges in terms of low-income student access, degree completion, and post-college success.  The standards they are suggesting include a minimum rate for college completion as well as a minimum loan repayment rates, reports Janet Lorin for Bloomberg.

All told, these two types of schools receive more than $180 billion per year in federal financial aid without being held accountable for the results of their students.

More than $15 billion in federal student aid funds four-year “college dropout factories” with six-year graduation rates below 15% and “diploma mills” where almost 30% of students who leave with debt are unable to repay their loans, according to the report, entitled “Tough Love: Bottom Line Quality Standards for Colleges.”

The report suggests penalties for those schools not making the cut.  They ask for assistance to be given to underperforming schools, and that these schools are held accountable, by cutting federal aid if necessary.

According to the report, 300 schools make up the bottom 5%, referred to as ‘dropout factories‘.  The students at these schools are six times more likely to drop out than graduate, and have less than a 50% chance of making it to their sophomore year.

Students who do not complete college are four times more likely to default on their loans.

These schools are typically selective, private and wealthy, receiving $169 billion in aid as a whole, according to the study.

Co-author Michael Dannenberg said the blame lies largely with the universities:

“When we look at the data, similar students with similar characteristics get different results and some institutions get especially poor results, and that’s not acceptable,” Dannenberg said in an interview. “Colleges are supposed to correct socioeconomic inequities. Too often, there are institutions that are calcifying them.”

In August of 2013, US President Barack Obama asked for a college rating system to be put in place which would allow families to make informed decisions on a school’s value.  Ratings would include completion rates and student debt.

“We are trying to cut to the chase of what the President is trying to do for every college,” Dannenberg said. “We’re proposing what we think is a fair way to identify bad institutions who are demonstrating not doing well based on current data and encouraging them to improve over time with dedicated support.”

In the study, Dannenberg suggests giving schools a one-year notice of their standings, and then assistance over a three-to-four year span to improve.  If the schools do not improve, their federal financial aid should be cut.