Unpacking the PROSPER Act

The Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act, recently introduced by House Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC), proposed a rewrite of the Higher Education Act that would have a dramatic impact on the more than $150 billion spent by taxpayers annually on postsecondary education and the millions of students who receive federal financial aid.

In the analysis below, Higher Learning Advocates takes a closer look at how the PROSPER Act would impact higher education accountability, accreditation and efforts to broaden access to new providers and students.

Risk-Sharing Proposal Needs Improvement


At a time when the federal government spends $150 billion every year on higher education, policymakers have an obligation to ensure students use federal financial aid at institutions that consistently produce value and outcomes, and colleges and universities should have ‘skin in the game’ along with the students they serve. The PROSPER Act revamps the way federal policy holds our institutions of higher education accountable.

Currently, the cohort default rate (CDR) is a primary accountability metric used by the federal government, requiring institutions to maintain less than a 40 percent cohort default rate for any single year or 30 percent for any three consecutive years in order to qualify for for federal Title IV aid. Some flaws exist within this approach, as it creates a binary ‘in-or-out’ system that rarely affects more than 10 institutions any given year and discounts other negative student outcomes such as trouble repaying loans. However, it can and should remain as a useful disclosure metric even if replaced with another measure. An even stronger accountability metric would be a cohort loan repayment rate that ensures a percentage of an institution’s students are able to repay a certain percent of their loans three years after leaving the institution–whether they complete their degree or credential, or not.

While the PROSPER Act does turn toward a cohort loan repayment rate, the measure included needs improvement to be an effective accountability tool. The legislation would require programs at institutions to have a program-level loan repayment rate higher than 45 percent repayment rate for three years in order to be eligible to participate in federal financial aid program, such as students loans and Pell Grants. Under this requirement, a student is considered to be in positive repayment status if they have an outstanding loan and are less than 90 days delinquent, which is far too lax a measure to hold institutions accountable for the outcomes they produce. If a program at an institution fails to meet the 45 percent repayment rate threshold for three years, then only the program becomes ineligible for federal financial aid–a noted difference from the CDR which would hold entire institutions accountable.

Additionally, the PROSPER Act still leaves other important questions unanswered, including how the measure will treat students who don’t neatly fit into any particular program of study and what role the ‘repayment improvement task force’ will have for helping low-performing institutions improve.

As this bill moves through the legislative process, we hope Congress will work toward a bipartisan approach to accountability that protects today’s students and taxpayers.

Accreditation Reform Proposals Fall Short


Our nation’s postsecondary quality assurance system, largely reliant on accrediting agencies, is outdated and doesn’t serve the needs of today’s students.

Accreditation reform is needed in two ways: 1) to reform the current system to place greater emphasis on student outcomes over compliance, and 2) to create a complimentary system for new validators of quality to allow new and innovative providers access to federal financial aid.

Current law asks accreditors to focus too little on measuring and assessing student outcomes and far too much on compliance and process. The PROSPER Act takes a step in the right direction by increasing the focus of accreditors’ standards on student learning and outcomes, but leaves too much room for institutions to set their own, potentially low, standards. Allowing accreditors to complete differentiated reviews would create a useful tool to help accreditors focus on helping low- or moderate-performing institutions improve, and provides more transparency on the accreditors’ processes.

But there’s a hitch: the bill would allow the Secretary of Education to simply waive all or parts of the quality assurance role of accreditors. The bill requires accreditors to demonstrate in their waiver application how the waived requirements would reduce administrative burden or increase student services and outcomes, however it fails to provide for any process of review, feedback and verification of those assertions. While bureaucratic and compliance-related requirements can hinder innovation, there should be more safeguards in place so accreditors cannot walk back from their commitment to ensuring student learning and outcomes. While imperfect, the experimental sites authority already in the law as well as prior demonstration projects can provide useful lessons as the Committee considers allowing experimentation in this area.

Separately, it’s time for our quality assurance system to allow for a process to recognize and validate new and innovative providers that serve a growing number of today’s students, such as coding bootcamps or online course bundles that lead to degrees or credentials. While the PROSPER Act would help expand federal efforts to support high-quality innovative and non-institutional providers of higher learning, the bill still requires such providers to partner with traditional institutions and go through the cumbersome traditional accreditation process, which isn’t equipped to assess these models. This could slow down innovation and responsiveness to local workforce needs.

New Efforts to Recognize All Forms of Learning and Broaden Partnerships


Federal policy should count all forms of high-quality postsecondary learning, whether it takes place on campus, online, on a job site, on a military deployment or on other new and emerging platforms.

The PROSPER Act would authorize a new apprenticeship grant program, allow Pell Grants to be used at programs that are more than 300 hours–the current requirement is 600 hours–and eliminate the direct tie to credit hours for competency-based programs. In general, broadening our postsecondary education system to recognize all forms of high-quality postsecondary learning is a good thing, but in doing so policy must provide for safeguards and assurances that programs are leading to high-quality credentials. As such, Congress should take steps to ensure shorter-term programs still lead to valued industry credentials and certifications as well as pathways into future educational programs. The bipartisan Jumpstart Our Businesses By Supporting Students (JOBS) Act provides a useful example of how to strengthen those pathways between career and technical education and in-demand fields.

Postsecondary Data Reforms Won’t Provide Critical Earnings Info


Our system of postsecondary data is complex and involves many different agencies and databases.

Higher Learning Advocates supports bipartisan efforts to improve postsecondary data and build a student-level data network that would better inform students and their families about the potential return on investment they can expect from college. Unfortunately, the PROSPER Act falls short in this area by not repealing the ban on a student unit record, a step that Republican and Democrat members in both chambers of Congress have supported through bills like the Student Right to Know Before You Go Act and the College Transparency Act.

The substitute amendment to the PROSPER Act includes a provision that merely requires a report on the feasibility of providing better data through the National Student Clearinghouse. But this report is, in essence, kicking the can down the road instead of taking the action today’s students need now, not more than two years from now. We urge the Committee to work with bipartisan leaders in Congress to find an immediate path toward meaningful data tools that count all of today’s students and provide consumers with the transparency and data they need.

Reach Emily Bouck at ebouck@higherlearningadvocates.org.