The term “transparency” has become the mantra for many legislators regarding a host of subjects in our society, rx and the use of this term has certainly increased recently. I am all for transparency, however, transparency needs to apply to all.
As part of the The White House 2016 budget, President Obama is proposing legislation that would require for-profit post-secondary educational institutions to include tuition revenue received from the GI Bill and Military Tuition Assistance (MTA) programs as part of their 90/10 report.
An amendment to the Higher Education Act of 1965 (HEA), requires for-profit institutions to report annually, to the Department of Education (ED), the total amount of revenues received and the portion of those revenues that are from federal Title IV financial aid sources. The amendment to the HEA limits the amount of total revenue received by for-profit educational institutions from Title IV financial aid sources to no more than 90% (ED, 2015).
Why is President Obama’s proposal a concern for-profit institutions? If we just consider Title IV federal financial aid, the top 10 for-profit institutions and the amount of revenues received by these institutions, the total amounts to over $10 billion [combined] in revenue from Title IV federal financial aid. According to the ED, in the July 2014 report, of the 1948 for-profit institutions reporting, 737 or 37% reported their Title IV federal financial aid revenues were in excess of 80% (ED, 2015). By requiring for-profit institutions to also include revenues from both the GI Bill and DoD Military Tuition Assistance program, many of these schools would find themselves well above the 90% threshold, resulting in the potential for them to lose their ability to receive federal educational funding.
Why limit the reporting of revenues received from federal sources to just for-profit institutions? Non-profit, public and private, post-secondary institutions also receive revenue from Title IV federal financial aid sources. A large number of them also receive both GI Bill educational benefits and MTA for their students. Why not require all post-secondary institutions to report their revenues and sources to the ED every year? If we are truly interested in transparency, then all post-secondary institutions should be required to report their revenues to the ED annually.
In order for post-secondary institutions to receive DoD Tuition Assistance funds as payment for Service member’s tuition, they must agree to and sign the DoD Memorandum of Understanding (DoD MOU). The DoD MOU 3rd version, requires institutions to also follow standards set forth by Executive Order 13607, Establishing Principles of Excellence, the Department of Veterans Affairs, and the Department of Education with regards to the explaining the costs of attendance, unfair or deceptive recruitment practices, and providing academic and student support services to Service members, spouses, and adult family members enrolled at their institution (DoD, 2014).
So, why not have transparency for all? Why should for-profit institutions be the only institutions required to report the percentage of their revenues that come from federal financial aid sources? Why not require all institutions to report the same thing?
All federal aid sources, whether Title IV financial aid (loans and grants), DoD MTA, and GI Bill Benefits come from public tax revenues paid by taxpayers. As taxpayers, do we not have the right to know how much each post-secondary institution receives are how they are using those funds?
Transparency is a good thing, particularly within higher education, after all for what students are paying in tuition and fees to attend college, shouldn’t we know how taxpayer dollars are being spent? All institutions of higher education should be required to report to the Department of Education how much of their revenues are from all federal educational sources.
Department of Defense. 2015. DoD Memorandum of Understanding. Retrieved from: http://www.dodmou.com/Documents/DODI132225%20July%207,%202014.pdf
Department of Education. 2015. Proprietary school 90/10 percentages. Retrieved from: https://studentaid.ed.gov/about/data-center/school/proprietary