On November 13, at an open forum hosted by the Department of Education (ED)—one of four forums held across the country to receive public input—Liz Clark, director, congressional relations, delivered a statement on behalf of NACUBO on President Obama’s comprehensive plan to address college costs.
The Administration envisions one element of the plan, a new college rating system, as a tool students could use to select schools with the “best value.” The White House also proposed eventually tying financial aid to an institution’s performance, based on its rating. An official White House fact sheet can be found here that outlines President Obama’s plan.
NACUBO took the opportunity to commend the Administration for its commitment to higher education and expressed its willingness to be a partner in the conversation about college costs and a new rating system. Speaking at George Mason University in Fairfax, Virginia, Clark stated, “We believe that by increasing the understanding by the public of colleges and universities, a clearer comprehension of tuition rates, rising costs, and/or reductions in support will emerge. Done well, making data more transparent can help the public understand the expenses that drive the cost of providing higher education—and that revenue to support those expenses is limited.”
NACUBO’s recommendations center on four points:
- A rating system must accommodate the diversity of American higher education.
- A rating system should not discourage investments critical to the education mission that are not easily measured.
- The government should partner with NACUBO on efforts to communicate financial information.
- Dramatic shifts in governmental resources must continue to be a part of the conversation about making college affordable for American families.
"The rating system must…achieve a level of elegance that does not result in comparing apples to oranges," said Clark. Whether the rating system is approached as a consumer tool, benchmarking product, or accountability measure, she added, it needs to recognize the diversity of American higher education institutions.
Graduation rates, employment and earnings outcomes, and default rates are generally considered the low-hanging fruit of post-secondary education accountability and performance measures. “The public good of higher education expands far beyond those measures—communication skills, creative thinking, critical thinking, civic participation, global knowledge, and healthier lives are all competencies that are nurtured, and invested in, by institutions as a part of the college experience,” Clark stated on behalf of NACUBO. The association does not want to see a rating system that discourages, or devalues, investments in the invaluable elements of the higher education experience that are not easily measured.
NACUBO also used the opportunity to mention the “Blank Slate” project being led by Sue Menditto, director of accounting policy at the association, with the help of the NACUBO Accounting Principles Council. This major project aims to create a new set of innovative financial statements, with key disclosures, in an attempt to better explain higher education’s mission and financial results to stakeholders. The fundamental purpose is to design a statement to help the public understand and distinguish among types of revenue, endowment spending, institutional aid, and educational expenses and to clarify how students pay for college. The project is directed toward the Financial Accounting Standards Board (FASB) and Governmental Accounting Standards Board (GASB) but could ultimately prove useful to the Integrated Postsecondary Education Data System (IPEDS) finance survey, which collects information based upon accounting standards set by these boards.
NACUBO was also adamant that cutting costs and promoting efficiencies can only go so far in responding to the volatility of government higher education support. The recent recession era’s constrained resources and a transitioning economy required many institutions to seek new solutions and even new business models—stimulating innovation and changing what institutions teach and how they deliver it. In addition to efforts to keep costs down, colleges and universities had to seek ways to grow revenues, particularly with the significant decline in per-student state funding at public colleges. As Clark stated at the forum, “The impact of diminishing governmental resources must continue to be a part of the overarching conversation about making—and keeping—college affordable for American families.”
NACUBO looks forward to working together with the Administration and to further engagement on the issues of college value, affordability, and the proposed college rating system.