‘Dropout Factories’ Should Lose Federal Student Aid, Study Says

Career College Central summary:

  • As the Education Department grapples with a proposal to rate U.S. colleges, a nonprofit group is recommending cutting aid to schools that fail to improve on metrics such as completion rates and loan repayment. The government should leverage student aid and tax benefits to protect students and keep taxpayer dollars from underperforming schools, according to a report released today by the Washington-based Education Trust.
  • About $180 billion annually flows from the government to thousands of colleges, from the highest-performing to the lowest, with almost no consideration for performance, acceptance of low-income students, graduation rates, or student-loan repayment measures, according to Michael Dannenberg, a co-author of the report and the group’s director of higher education and finance policy.
  • “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.”
  • The Obama administration announced last August its intention to create a college-rating system to give families enough information to determine good value. Potential measurable data include completion rates and student debt. Education Department officials have held more than 80 meetings with stakeholders including college leaders and students, according to the department’s website. Many college leaders have publicly expressed their concern about such a system, and a draft proposal is expected this fall.

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