Transparency Consensus

WASHINGTON -- A proposal to require states to collect and disseminate data on college graduates’ salaries seems to be attracting the rarest of accolades in Congress: bipartisan approval. For colleges, concerned about growing federal regulation, it’s cause for concern.

In a speech laying out a wide-ranging Republican agenda on domestic issues last week, House Majority Leader Eric Cantor mentioned few specific legislative proposals. But a rare name-drop happened in his handful of sentences about higher education, when Cantor praised a bill introduced by Senators Marco Rubio, a Florida Republican, and Ron Wyden, an Oregon Democrat, that would enlarge state-level data collection efforts to link graduates’ salaries back to their colleges and majors.

That bill, the Student Right to Know Before You Go Act, was first introduced a year ago. Until Cantor’s endorsement, it seemed consigned to the same fate as most of the other higher education bills in the Senate: a quick death in committee. The imprimatur of the House’s second-highest ranking Republican suggests that transparency -- requiring colleges to provide more information on what students will pay for a college education and what they can expect in return, from monthly student loan payments to postgraduate salaries -- could become a rare point of accord between Congressional Republicans and the Obama administration.

For many colleges, the emergence of this consensus would be unwelcome news. Colleges have generally viewed many of the Obama administration’s transparency efforts, such as a “shopping sheet” intended to make financial aid packages easier to understand, as unnecessary regulatory burdens. Requiring states to collect and publish data on salaries by majors, a project already under way in some states, is even more fraught.

The bill would replace reporting requirements for the Integrated Postsecondary Education Data System, the federal government’s main repository of student and institutional data, with reporting requirements for state data systems. Those systems would link transcript information, such as students’ majors and graduation years, with earnings data collected for state unemployment insurance. (Personally identifiable data would be removed.) While the legislation doesn’t require states to link their databases, proponents say that states probably would make agreements to share the information in order to include students who attend one college in one state but later work in another.

Since 2005, the U.S. Education Department’s Institute for Education Sciences has given grants to states to develop longitudinal data systems, intended to track students from kindergarten into the work force. The Obama administration has increased federal funding for those efforts, including through the 2009 stimulus bill, and pushed policy changes to drive their creation. Creating a federal system to track students is prohibited by law, and was a battle in the last renewal of the Higher Education Act, with private colleges and Congressional Republicans united in opposition. But many who would favor a federal database now argue that linking state databases would confer many of the same benefits.

Interest in the earnings value of a college degree has grown during the economic downturn, as has concern about student debt and whether students are borrowing more than they can reasonably expect to pay back. Some states are already linking students’ postgraduate salaries back to their colleges and majors. College Measures, a nonprofit group supported by the American Institutes for Research, created an online tool last fall to view graduates’ salaries by academic program in Virginia. The group is working on similar systems for Tennessee and Arkansas. Florida already tracks wages for graduates of the state’s public colleges and universities.

Proponents of Wyden’s and Rubio’s effort say that students should know more about their eventual earnings potential when choosing a college and major, and that the federal government -- which, through grants and federally issued loans, is paying a growing share of the bill -- has an interest in knowing how college students fare after graduation.

“What we have here is the way federalism is supposed to work -- a bunch of states are doing these things and it looks like a good idea for the nation,” said Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce, who studies the economic effects of a college education. The bill, and similar efforts under way in individual states, is the result of an increasing focus on efficiency in higher education as well as the push to get more students to complete college, he said.

Carnevale has studied the wage premium for college graduates, and he argues that a college education is key to better economic outcomes. But students have an interest in knowing in more detail what they might expect, he said.

The wage premium argument -- that college graduates earn more than less-educated peers over their lifetime -- can ignore that lifetime earnings differ substantially for individual college graduates, said Andrew Kelly, a research fellow in education policy at the American Enterprise Institute.

“People on the higher ed side make arguments about how [college] is a public good, and part of the reason it’s a public good is the public benefit and the wage premium,” Kelly said. “They don’t want to talk about how the wage premium may actually differ considerably across different places and different majors.”

At the recent annual meeting of the National Association of Independent Colleges and Universities, the association for private nonprofit colleges, a panel discussion with Mark Schneider, president of College Measures, quickly grew heated. Some college presidents said they disagreed with everything about the organization, from its premise to its methods.

Using salaries as a proxy to evaluate colleges or majors is reductive, commodifying a broader educational experience that can’t be so easily measured, those college presidents argue. It can also tilt the scales against majors in the liberal arts, which are less lucrative at first than some professional careers but pay off over the long run. In a rankings-obsessed culture, they worry about how the data will be used and interpreted. (When College Measures released the Virginia data, the company ranked colleges in an eye-catching graph based on graduates’ earnings, from the highest earners to the lowest.)

Tracy Fitzsimmons, president of Shenandoah University in Virginia and a member of the NAICU board of directors, said salary after graduation is a “totally valid data point” for students to consider, although it should just be one of many factors they keep in mind when choosing a college and a major.

“If you focus primarily on salaries you’re really diminishing the real value of education,” Fitzsimmons said. “A really great college education prepares students to enter into the work force, but it also prepares them to think deeply about the world around them.”

Shenandoah ranked relatively high on the College Measures list of graduates’ earnings from Virginia colleges. Still, Fitzsimmons saw plenty of problems with the project, including that it didn’t take geographic differences and cost of living into account. Colleges whose students work in northern Virginia and the suburbs of Washington, D.C., where the cost of living is higher, reported higher overall salaries than colleges whose graduates worked elsewhere, she said.

“If we zero in only on the major fields, and only on the salary histories in the first year or two, or first five years, out of college, you are missing the big picture,” said Carol Geary Schneider, president of the Association of American of Colleges and Universities, which advocates for liberal education. “It would be a disaster to make policy and investment decisions on misleading data.”

Kelly and Carnevale, both of whom favor the Rubio-Wyden bill, agreed that using short-term data, such as salary a year after graduation, is a problem. But it could be solved in a number of ways, including using archival data to look at previous college graduates, Carnevale said.

More Regulations?

In the State of the Union a year ago, President Obama proposed a college affordability plan that threatened to withhold some financial aid from colleges that do not provide “good value” to their students. Many colleges fear that collecting the data based on graduates’ salaries is only the first step, and that regulations -- such as an across-the-board version of the Obama administration’s “gainful employment” rule for vocational programs -- will inevitably follow.

“It’s one thing to use this data for counseling students on their financial planning, and it’s something else to use this data to evaluate the actual quality of major programs,” Schneider said.

Many colleges already feel overburdened with reporting requirements, occasionally bringing binders or stacks of paper to Congressional hearings and federal panels to demonstrate the quantity of data they must report to various federal entities (as Fitzsimmons did at a Congressional hearing last year). While the bill aims to overhaul existing reporting requirements, not add new ones, any new transparency requirements are often viewed skeptically.

“When you ask people to give you information about the outcomes about what they’re doing, you’re regulating them, but it’s soft regulation,” said Carnevale, who said he would not favor more explicit federal regulations based on the salary data. (Neither would Kelly, of the American Enterprise Institute, who views the salary disclosures as offering more information so that students can make choices in a free market.)

There is likely to be plenty of time for the debate. House and Senate versions of the bill have already been introduced, and Cantor said he looked forward to working with the House Committee on Education and the Workforce on the act. But it’s unclear whether it would be passed before an overhaul of the Higher Education Act, which expires at the end of this year but is widely expected not to be renewed until 2015.

Carnevale, for his part, said he understood the concerns about commodifying education and focusing too narrowly on salary. But arguments that most students view higher education as something other than primarily a vehicle for economic success fall flat in an age when more Americans at least begin to pursue college than not, he said. And while disaggregating the data will show differences across colleges and majors, a degree is still worth it, he said.

“If you get a bachelor’s degree in the current American economy, the odds are very high that it’s going to pay off,” he said. “There are very few bachelor’s degrees that don’t have a solid earnings return.”