The truth behind higher education disclosure laws

Article Highlights

  • University reporting requirements fall short of expectations

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  • How are colleges holding up the Higher Ed Opportunity Act?

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  • Are students and parents getting everything they need to choose the right college?

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Recognizing that higher education is a market driven by consumer choice and reluctant to regulate college behavior directly, state and federal policymakers have created a host of college information disclosure and reporting requirements. Armed with better data, the theory goes, students and parents will vote with their wallets, putting pressure on low-performing colleges to improve while avoiding direct government intervention.

The problem, according to Education Sector’s Kevin Carey and Andrew P. Kelly, a research fellow at the American Enterprise Institute, is that the reporting requirement provisions are not working nearly as well as intended. In The Truth Behind Higher Education Disclosure Laws, to be released this Thursday, Carey and Kelly investigate scores of four-year colleges and universities to gauge their compliance with the information requirements of the Higher Education Opportunity Act.

The researchers examined five areas of strong interest to policymakers and the general public:

  • Pell Grant graduation rates;
  • Credit transfer and articulation agreements;
  • Employment and graduate school placement;
  • Textbook prices; and
  • Private student loans.

Researchers first looked at each school’s website for the elements of the disclosure provisions. For those elements that were not publicly available, researchers contacted the colleges via phone or email.

Carey and Kelly found that compliance rates vary widely. There is nearly universal compliance on the requirement that schools post their credit transfer criteria (99 percent). But just 25 percent of institutions meet the requirement that schools disclose the six-year graduation rate for students who receive a Pell Grant.

The authors propose policy solutions to some of the biggest issues raised by their survey. Then they ask the broader question: is it enough to provide students and parents with information? “Clearly, information matters,” the authors say. “But mere availability isn’t enough.” They go on to outline a number of recommendations that will both increase transparency and also make it easier for students and families to act on the information.

Andrew P. Kelly is a research fellow at AEI and Kevin Carey is policy director at Education Sector

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