Insights & Outlooks

Accountability: Comparing the PROSPER Act and Aim Higher Act

Quality & Outcomes
Accountability: Comparing the PROSPER Act and Aim Higher Act

How would the Aim Higher Act and the PROSPER Act affect accountability?

On July 24, 2018, Ranking Member Bobby Scott (D-Va.) of the U.S. House Committee on Education & the Workforce introduced the Aim Higher Act, a bill to reauthorize the Higher Education Act of 1965 (HEA).

The Democratic proposal follows the December 2017 PROSPER Act (Promoting Opportunity, Success, and Prosperity through Education Reform or H.R. 4508), an HEA reauthorization bill introduced by House Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC).

Both bills would revise several of the major accountability components of the Higher Education Act.

The chart below compares significant accountability provisions in current law, the Aim Higher Act, and the PROSPER Act, highlighting changes to key accountability metrics that impact the way the federal government measures institutional effectiveness.

IssueCurrent LawPROSPER ActAim Higher Act
Cohort Default Rate (CDR)/Programmatic Loan Repayment RateRequires institutions of higher education (IHEs) to maintain less than a 40 percent cohort default rate for any single year or 30 percent for any three consecutive years, or face the loss of Federal Title IV aid eligibility.Replaces CDR with a Programmatic Loan Repayment Rate, calculating loan repayment based on program-by-program result instead of an entire institution. Requires IHEs to maintain a 45 percent repayment rate for three years or face the loss of federal aid. Students who are less than 90 days delinquent on student loans would be considered in positive repayment under this requirement.Would modify the CDR metrics by adjusting for the numbers of borrowers at an institution and the number of borrowers in forbearance. The bill would allow institutions with a high adjusted CDR to receive technical and financial support from ED to improve student outcomes.
Gainful EmploymentRequires programs at for-profit IHEs, and non-degree programs at public and private nonprofit IHEs, to prepare students for gainful employment in a recognized occupation. Regulations require programs to meet debt-to-earnings ratio thresholds or face termination of Federal Title IV aid eligibility (on a program-by-program basis).Eliminates this requirement.No change from current law
90/10Requires for-profit IHEs to derive at least 10 percent of their revenue from non-Title IV sources to be eligible to participate in Federal Title IV aid programs.Eliminates this requirement.It changes the 90/10 rule to 85/15. It also prohibits all institutions that spend less than half of their tuition revenue on instruction from using federal funding for marketing, advertising, recruiting or lobbying.
It also prohibits institution from having students sign pre-dispute arbitration action ban agreements. The bill would modified the legal definition of a non-profit.
State Authorization Requires institutions to have state authorization to be eligible to participate in the Federal Title IV aid programs. Requires distance education programs to obtain authorization by each State where they enroll students or receive reciprocity through a State-based consortium.Only requires IHEs to be authorized by the State in which they are physically located.Would shift Title IV compliance reviews from accreditors to the Department of Education. Puts extra emphasis on the role of States as authorizers.
Credit HourCurrent law and regulation define the credit hour as the standard for federal Title IV eligibility.Strikes the existing regulation and prohibits the Secretary of Education from regulating on this topic in the future.No change from current law
Minority Serving Institution (MSI) Graduation Rate RequirementN/ARequires MSIs receiving funds under Title III, Part A and Title V to maintain a 25 percent completion rate to be eligible for funding. Defines completion as graduation within 150 percent of normal time.N/A
Return of Title IV (R2T4)Generally, does not require IHEs/students to return any federal aid to ED if the student withdraws after completing 60 percent of a course or program in a given year.Sets new thresholds for return of Federal Title IV aid. Reduces the potential returnable amount of Federal Title IV aid by an equal percentage for every 25 percent of a program or course completed by a student (e.g. if a student completes 50 percent of a program and subsequently withdraws, only 50 percent would have to be returned to ED). Allows institutions to charge students 10 percent of any funds owed.No change from current law.