WASHINGTON, July 16, 2020—Since 2011 the U.S. Department of Education has published two annual lists of higher education institutions with the highest percentage changes in tuition and fees and average net price. A study published today found that inclusion in either of these College Affordability and Transparency Center (CATC) lists does not affect institutional pricing policies or students’ enrollment decisions. The findings appear in Educational Evaluation and Policy Analysis, a peer-reviewed journal of the American Educational Research Association.
“This attempt by the federal government to hold colleges and universities accountable by ‘naming and shaming’ them does not appear to be effective at changing institutional or student behavior,” said study author Dominique J. Baker, an assistant professor at Southern Methodist University. “The Education Department is required by federal law to publish these lists, but there is little evidence they are having the intended effect.”
“Many higher education observers have long questioned the value of these lists and expressed concerns about the ability of students and institutions to use the data,” said Baker. “My findings are in line with these concerns.”
Congress amended the Higher Education Act in 2008 to mandate that the Education Department publish annual lists of institutions that rank in the top five percent of their sector of U.S. colleges and universities in terms of absolute published tuition price or average net price, and percentage increase in published tuition and required fees or average net price (published tuition minus student aid). Sectors are identified by sorting institutions by control (public, private, and nonprofit) and level (four-year, two-year, less-than-two-year). Baker’s study looked at just the percentage increase lists.
To analyze the effect of inclusion on these CATC lists on subsequent tuition and net price decisions and on student enrollment, Baker compared institutions that were within the top five percent cutoff to those that had just missed it, from 2014 to 2017. The Education Department dataset she used for her analysis is also used by the department to calculate its CATC lists. She found little evidence that institutions included on either list differed from those that were not included, in terms of student enrollment and institutional affordability in the subsequent two years.
“These policy efforts are built on the assumption that with the right information, potential students will be able to make better informed choices,” Baker said. “However, the lists did not discourage students from attending institutions with larger increases in average net prices. And institutions did not modify their pricing.”
Baker noted that her study is one of the few that has produced causal evidence regarding the effectiveness of low-stakes, non-punitive federal accountability policies focused on higher education.
The findings provide evidence that simply relying on students to seek out and review affordability information is unlikely to influence their behaviors, Baker noted. This may be due partially to confusion caused by the lists relying on percentage increases rather than absolute dollar amount increases. Some institutions with large dollar changes over time are not included on the lists because the changes are measured as a percentage of what was charged in the previous year.
“For example, in 2017, Carver Bible College was included in the change-in-tuition list while Loyola Chicago was not,” Baker said. “As a result, one might expect that Carver Bible College would be significantly more expensive than Loyola. In actuality, the 2015–2016 tuition and fees for Carver were $9,860, while that same year the tuition and fees for Loyola were $40,426.”
“Not only is it difficult to understand what these lists are actually telling students about institutions’ affordability, but also, the fact that an institution is included on these lists does not mean it is automatically a good or bad place to pursue higher education,” said Baker.
According to Baker, weak sanctions attached to being included on the CATC lists—at most being required to complete additional paperwork explaining the large change—did not create enough negative media attention or other disincentives for institutions to change their pricing decisions for future years, even when institutions had the autonomy to do so.
“With the United States now in a recession, it is likely that more students and their families will struggle with affording college in the fall,” Baker said. “The federal government has to be concerned with finding ways to ensure that institutions remain or become more affordable. This study suggests that at least one of the key policies that is supposed to be holding institutions accountable does not appear to be effective.”
“The next update of the Higher Education Act needs to either remove this policy or revise it,” said Baker. “Until then, it is not clear why college administrators or Education Department staff are required to compile data and complete reports on this.”
“As federal policy leaders engage in discussions about ensuring that higher education is affordable during the pandemic, it is important that they holistically assess current policies and their efficacy,” Baker added.
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