How Obama's Education Reforms Might Hurt Black Colleges

Some fear the president's plan to rate universities would unfairly compromise funding for schools serving disadvantaged students.

President Barack Obama and Morehouse President John Silvanus Wilson, Jr., stand together during Morehouse College's Commencement ceremony in May 2013. (Carolyn Kaster/AP)

Much of the current ballyhoo in higher-education circles has centered on President Obama's announcement earlier this year to make community college free for all Americans "willing to work for it." The move, however, is a part of a larger suite of reforms that the White House hopes will make college more affordable and accessible. But, while the community college plan has received the lion’s share of the public’s attention, another component of the administration’s reform has been just as contentious.

At the end of the year, the White House unveiled the framework for its long-promised college-ratings system. The system is a consumer report of sorts that will assign grades to two- and four-year institutions for their performance as it relates to access, affordability, and outcomes. But many higher-education leaders and experts say the proposed system is a misguided attempt at making the college experience more accessible for students of color and others from families with low incomes. Among the critics is Michael L. Lomax, the president and chief executive of the United Negro College Fund, who last month published a blistering critique of the White House’s plan in the Washington Post.

"It would be patently unfair to compare the graduation rates of Dillard University, a historically black college where I served as president, with, say, those of Harvard University. Yet the Education Department’s rating system may do just that by grouping all four-year colleges together," wrote Lomax. "Harvard has a $36 billion endowment and enrolls academically elite students. Dillard has a $49 million endowment and enrolls many students who are not as academically prepared for college as their more advantaged peers."

The ratings system as proposed includes a number of metrics. First, it would factor in a college’s average net cost—the total annual cost of attending the school for a beginning full-time student, before any aid. Then, it would account for student-completion rates, the percentage of students who receive Pell Grants, and outcomes like graduates’ earnings and loan-repayment rates. Based on that information, the Department of Education would assign each institution a rating of "high," "low," or "mid performing."

Lomax and others fear that a one-size-fits-all ratings system would ignore the unique challenges, student populations, and missions of the nation’s 105 historically black institutions. Most importantly, the system would make students attending "high-performing" schools eligible for larger Pell grants and lower rates on federal student loans by 2018—potentially starving out historically black institutions if they receive lower ratings. To tie student aid to ratings, the White House would, of course, need Congressional approval, which it’s seeking with the upcoming reauthorization of the Higher Education Act. The plan has already drawn stiff opposition from Republicans.

Historically black colleges and universities make up just 3 percent of the student enrollment at the nation’s two- and four-year institutions but enroll 9 percent of black undergraduates and award 16 percent of the bachelor’s degrees earned by black Americans, according to the National Center for Education Statistics. Historically black institutions operate on about an eighth of the average endowment of other institutions. Half are private and don’t receive state funding. Meanwhile, the 17 or so that are public land-grant institutions—those originally designated as technical and agricultural campuses—are drastically underfunded by their states. In fact, they receive much less of the state funds than they’re entitled to under a federal mandate—a shortfall totalling about $57 million between 2010 and 2012. This means that historically black institutions are increasingly dependent on revenue from tuition, and for many students, much of that tuition is subsidized by federal loans and tuition dollars; more than seven out of every 10 students at the schools receive Pell grants and an equal share takes out federal loans. That’s about 20 percent higher than the national average.

Department of Education officials met with campus leaders last year to discuss the ratings system, and that’s when presidents of historically black institutions raised their concerns. Ivory Toldson, deputy director of the White House Initiative on historically black colleges and universities, says although the concerns are legitimate, he still believes in the overall premise of a ratings system.

"The ratings system, as a college scorecard, is meant to be consumer driven. It’s meant to help parents and students find the institution that best fits them," he said. "And the intention is for the system to evolve."

Despite the significant role that historically black institutions play in higher education for African Americans, the latest proposal is the most recent obstacle in a long trajectory of policies that have undermined the institutions. In fact, many of the institutions are still reeling from the Department of Education’s unannounced changes to the lending requirements for its only parent-issued loan program in 2011. The tightened credit standards have led to significant, disproportionate declines in enrollment at these campuses: An estimated 28,000 students were denied loans in 2012, resulting in a collective loss of about $155 million in tuition revenue, a 35-percent reduction, according to the United Negro College Fund.

In an editorial for The Hill, Marybeth Gasman, director of the Penn Center for Minority Serving Institutions, was critical of the rating plan’s lack of consideration for race. "Given the discontent in the nation around issues of race, the rapidly changing demographics of the country and the fact that most of our ability to meet President Obama's college completion goals is dependent on educating more people of color, the omission of a discussion of, and credit for, educating a diverse student body is a glaring oversight," Gasman wrote.

Another editorial in the Washington Times pointed out that a ratings system that privileges high earnings for graduates would punish religious colleges and other universities whose graduates disproportionately take jobs in the nonprofit and public sectors. The system also fails to account for the persistent employment and earning gaps between black and white graduates.

Not all leaders in the black college community share this trepidation, however. Others believe it could be a benefit to the institutions and their students—as long as it’s carefully engineered.

"I think the worst mistake that HBCUs can make is to see this as a threat rather than an opportunity," said John S. Wilson, the president of Morehouse College and former director of the White House Initiative on Historically Black Colleges and Universities. Johnny C. Taylor, the president and CEO of the Thurgood Marshall College Fund, agrees.

"African American students, students from low-income families are often first-generation consumers of higher education and don't always understand all the dynamics. Any system that gives us more data to make informed decisions is a good thing," Taylor said. "As long as the federal government makes like comparisons it can only be a benefit to HBCUs, but the notion that no information is better than imperfect information is flawed."

Still, Taylor has recommendations for improving the ratings system.

"You have to look at the student profile—entrance exam scores, family income, if they're first-generation students—because some students take heavier lifting," he said. In addition, Taylor believes an institution's financial profile, mission, value in the labor market should be considered.

"We need to look at what needs institutions serve—who their graduates are, where they go and what they do," he said.

The Department of Education is welcoming public comments and hosting "structured discussion" about the plan through February 17. The full rating system is slated for implementation in advance of the 2015-16 school year.

"This open-mic period is an opportunity for the HBCU community to speak up and convey to those making the decisions how they ought to develop the metrics," said Morehouse College’s Wilson. He adds, however, that many historically black institutions might face obstacles in using data to prove the unique value they add to the higher-education arena.

"I’m aware enough of this administration to know that they’re focused on data," Wilson said. "They’ll want data to undergird any conversation. That is key. I suspect that the value proposition for HBCUs writ large is going to be less clear and less compelling than the data-driven value proposition of specific HBCUs. In other words, I think it’s going to be more difficult to talk about the neighborhood than the house."