Skin in the game: Policy wonks propose ways to hold colleges accountable for student debt
- Conservative think tank Center for American Progress has produced a report on institutional risk sharing, with its focus centered on negative repayment outcomes from non-completion or failure of former students to make timely payments.
- The plan also calls for institutions to receive bonuses for students exceeding positive thresholds for default rates and repayment proportions, and for schools to be rewarded for increasing the number of successful students who qualify for Pell Grant support.
- The report accompanies increased advocacy from federal lawmakers who worry that the incoming presidential administration will allow issues of debt forgiveness to languish for students defrauded by predatory institutions.
While colleges and universities are still trying to find ways to serve a diverse student population without focusing primarily just on who can afford higher education, it is unlikely that mandated risk-sharing would improve outcomes for students or institutions, or that the Trump administration will allow certain harsh standards enacted by the Obama Administration to extend for at least four years.
Elite schools would remain relatively unharmed because of their high selectivity admission strategies, but mid-sized and small institutions would bear a heavy burden to admit high caliber students while finding ways to support retention resources for students on the fringes of preparedness. While the recommendations make sense on paper, it does not make immediate sense for most institutional budgets and legislative lobbying objectives.
- Center for American Progress Sharing the risk