Examining How Accountability Can Impact Racial Inequality in Federal Risk-Sharing
Public concern over student loan debt raises questions about the accountability of colleges in improving loan outcomes. Advocates of federal risk-sharing propose fines based on loan repayment rates. Data shows a strong correlation between repayment, income, and race across different types of colleges. Rather than penalizing colleges for inequality, alternative actions to enhance repayment include creating improvement funds, strengthening campus and student capacities, implementing community-based solutions, and offering technical assistance labs.
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Presentation Transcript
How accountability can increase racial inequality: The case of federal risk-sharing Nicholas Hillman University of Wisconsin-Madison 9/25/2018
Policy context Policy context Public concern about growth and consequences of student loan debt Are we putting enough pressure on colleges to improve loan outcomes? Federal risk-sharing proponents would say no We need to fine colleges according to loan repayment rates
Repayment, income, & race are Repayment, income, & race are highly highly correlated correlated All colleges For-profits All public/NPs All MSIs HBCUs & PBIs Highest First-Gen All colleges All colleges All colleges All colleges All colleges All colleges All colleges All colleges For-profits All public/NPs All MSIs HBCUs & PBIs Highest First-Gen Highest First-Gen Highest First-Gen Highest First-Gen Highest First-Gen Highest First-Gen All colleges For-profits All public/NPs All MSIs HBCUs & PBIs HBCUs & PBIs HBCUs & PBIs HBCUs & PBIs HBCUs & PBIs All colleges For-profits All public/NPs All MSIs All MSIs All MSIs All MSIs All colleges For-profits All public/NPs All public/NPs All public/NPs All colleges For-profits For-profits All colleges Source: College Scorecard
A fairer way to improve repayment A fairer way to improve repayment Penalizing colleges for inequality will only reinforce it What specific actions will improve repayment? - Don t use repayment for accountability if you can t answer this Promising ways forward: - Repayment improvement fund - Build campus & students capacity to improve outcomes - Comprehensive, community-based solutions - Technical assistance labs
