Reversing Incorrect Default Statuses, College Scorecard, Gainful Employment and CDR Inaccuracies

By Mary Lyn Hammer, Founder, President and CEO, Champion College Services

For those who wish to go deeper into the details of the U.S. Department of Education data, subsequent pages include Ms. Hammer’s additional findings beyond the errors admitted to by the department. What’s disturbing is that there is most likely even more that lies beneath the tip of the iceberg than Ms. Hammer has uncovered.

The following is an excerpt from the report. To view the full report, go to http://www.marylynhammer.com/college-scorecard_misreporting_and_errors-2/

*Please note all charts are credited to: ©2017 Mary Lyn Hammer, MaryLynHammer.com

College Scorecard fails to accurately report info for all schools

The original College Scorecard, hosted on Whitehouse.gov, was promoted as the place for students and parents to find critical comparative information on colleges. There were numerous problems with the original Scorecard:

1. The Scorecard did not contain information on all colleges and was a disproportionate representation of schools from each sector.
2. There were no schools in the Scorecard that pulled up under the keyword searches of law, legal, cosmetology, salon, beauty, barber, hair, or massage.¹
3. The information in the Scorecard was often incomplete. Numerous schools listed “no data” when that data existed on ED’s College Navigator site. For example, numerous schools did not have “median borrowing data” even though the school had a default rate and a significant number of borrowers. Certain schools that didn’t have FY 2010 CDRs had “0 percent” instead of “No Data” in the Scorecard. This falsely implies “high quality” and gave the impression that no students from this college defaulted.

After Mary Lyn Hammer began to speak up about these errors in January 2015 (with ED employees present), the data from the College Scorecard website was removed.² In September 2015, ED released a “new and improved” College Scorecard, and when it was unveiled, Ms. Hammer began to download the Scorecard data to analyze accuracy, but she immediately received – Error: Forbidden message and could not gain access to the data.

College Navigator comprehensive data failures

At the end of 2014, when Ms. Hammer was completing her research and analysis of publicly available college information, she had to manually collect financial information. While ED’s College Navigator appears to have the most comprehensive data and contains many pertinent data points, some of the information is not clearly defined and assumptions are made in the Navigator data that may not be accurate. For example, a college’s average student loan debt is provided in Navigator – but that data does not come anywhere close to ED’s reported 2014 national average student loan debt of $28,400.

Because Navigator’s student loan debt amounts are significantly lower than the national average, perhaps Navigator uses academic year amounts, not cumulative debt amounts. Cumulative debt amounts would be more helpful in student and lawmaker decision making. Further, most of Navigator’s data is not readily downloadable. A comprehensive report of all schools (or even by sector) cannot be generated. Reports must be pulled in batches and do not contain any financial information pertinent to decision making. When Ms. Hammer analyzed the data, she had to pull batches of information for all sectors and then add financial information manually. There are other pertinent facts from the College Navigator data in the following more detailed analysis:

Currently, only four data points are available in College Navigator reports, and it is very cumbersome to obtain all of this limited information.

Decisions by lawmakers, regulators, parents, and students must be based upon true data. An institution’s tax-filing status should not be a factor in measuring the quality of education. Let the data speak for the quality. The data is collected, Americans just need access to it.

ED’s Gainful Employment Data does not match its reporting

Beginning with FY 2011 Gainful Employment Rates (“GE”), ED’s reporting has been incomplete and inaccurate based upon ED’s true data. ED used this misreporting and corrupted data to set more severe, unrealistic rules for certain programs in GE 2.0. The three primary GE data sets are:

1. FY 2011 “Streamlined” Informational Data containing data for 3,695 programs—rate data only. (DOE File: StreamlinedGE2011InformationalRates062512School)
2. FY 2011 “Final” Informational Data containing data for 13,772 programs—with large amounts of data missing from these programs. (DOE File Name: GE2011InformationalRates062512FINAL)
3. FY 2012 Informational Data containing data for 7,934 programs—with median debt data missing so rates cannot be verified. (DOE File Name: 2012-informational-rates033114-508)

The Gainful Employment Rate Definitions chart (right) thresholds for the original gainful employment measures (“GE 1.0”) and the second gainful employment measures (“GE 2.0”).

FY 2011 Gainful Employment Informational Rates (June 2012)

ED’s “Final” GE data contained enough details to allow the data to be audited. An audit of the data shows that the true GE rates were inconsistent with Informational Rates ED released to the public, media, and the investment community. The discrepancies favored public and private NFP colleges and were damaging to for-profit colleges.

Missing data in Gainful Employment reports

In the data ED released to the public and the media, a disproportionate number of schools from each sector were reported in the “FY 2011 Streamlined Informational Data” compared to the comprehensive “FY 2011 Final Informational Data”. Without comprehensive and complete data, the public wouldn’t know whether programs passed or failed the GE criteria. The “missing data” whether removed intentionally or in error by ED resulted in data for only 5.1 percent of public college programs, 18.2 percent of private NFP programs, but 43.4 percent of for-profit college programs.

Inaccurate Gainful Employment calculations

In the comprehensive “Final” FY 2011 GE Informational Rate data, the most accurately reported ratios were the payment calculations comparing all sector programs:

UNDERGRADUATE PROGRAM PAYMENTS were consistent with the average debt amount and the defined length of the repayment period.

POST-BACCALAUREATEP ROGRAM PAYMENTS were similar to the payments calculated for the average debt amount and the defined length of the repayment period. However, the payments for the for-profit programs had the biggest discrepancy.

The payment calculations by credential levels – where for-profit schools had the only applicable programs – were inaccurately calculated too high and payments were not calculated in compliance with the original regulatory definition for 10-, 15-, and 20-year repayment schedules.

The payment schedules that should have been used are:

Failing programs

For programs identified in the FY 2011 Streamlined Data as “Failed 3 Rates” (193 for-profit programs), payments were not calculated in compliance with the regulatory definition for 10-, 15-, and 20-year repayment schedules. These rates were therefore grossly inaccurate:
When the correct repayment calculation is applied to the 193 proprietary programs that ED reported as “failing” – only six programs actually failed all three rates, and 56 rates fell within the GE 2.0 “zone” definition.

Thirty (30) failing programs had missing data (N/A), and certain data points and rates could not be verified for accuracy. Several undergraduate certificate programs had data and rates in the final data that did not match the rates in the streamlined data. The miscalculations for payments had a significant effect on the Debt-to-Earnings Ratios for the 193 programs ED reported as failing all three metrics:

ED never publicly acknowledged or corrected its press releases and statements that included egregious errors in GE sector-level performance like it did with College Scorecard. We have been grossly misled especially regarding the performance of for-profit programs.

Mary Lyn Hammer personally testified at the Department’s field hearing (prior to the GE 2.0 negotiated rulemaking) about the inaccuracy of the payments and rate calculations. And then interestingly, when the ED subsequently came to the table for the first round of GE 2.0 negotiated rule-making, they came with the new “zone” definition. There is strong evidence that ED’s definition for the “zone” and other GE criteria were established because the Department did not have the desired result.

ED’s “PAYE” and “REPAYE” set up GE programs to fail repayment rates

ED’s much-publicized and promoted Pay-As-You-Earn (“PAYE” and “REPAY”) programs, in addition to other income-based repayment

plans, put students into negative amortization during their first few years of repayment. Therefore, these ED repayment programs cause programs to fail the GE repayment rate thresholds. It is curious that these new repayment programs were rolled out at the same time the GE rules were being developed. These new repayment programs only require loan payments of 10 percent of discretionary earnings defined as the difference between your earnings and 150 percent of the poverty-level guidelines for your family. This requirement makes loan payments minimal and sets up a college’s GE programs to systematically fail the repayment rate criteria. While the repayment rate is no longer a program eligibility requirement (it is now a reporting requirement), the structure continues to harm the reputations primarily of for-profit colleges.

The PAYE program was implemented early through an Obama executive order. This executive order was issued simultaneously with the first GE rules. The vast majority of GE programs are at for-profit college – these colleges have received poor GE repayment rates due to the new repayment plans. Under standard repayment structures, most GE programs would have passing repayment rates.

Conclusion

At best, numerous and repeated errors in ED’s reports are evidence of gross negligence – when the data is properly audited; we learn that MANY excellent, high-performing colleges in the for-profit sector exist. At worst, ED’s misreporting and erroneous data is evidence of an agenda that has nothing to do with quality education. While some schools in ALL sectors should come under higher scrutiny, most for-profit institutions provide quality education options, especially for at-risk students, in critical fields of study vital to our infrastructure, health and well-being. For-profits provide needed job and vocational training that other higher education sectors are not prepared or well-suited to provide.

The College Scorecard errors recently admitted to by ED are just the tip of the iceberg. To resolve these issues, we must eliminate unreasonably targeted regulations; provide Americans with accurate information about true college costs and performance; and develop fair and equitable laws and regulations that hold ALL schools equally accountable for quality education and training. We must NOW address these critical issues to ensure we are prepared for future job growth.

For more information on this report or to schedule an interview with Ms. Hammer contact John White at Info@MaryLynHammer.com or 480 -433-2392.

References

1. Note that many of these same schools are those with missing data in the GE Informational Rates.
2. Ms. Hammer has attempted to determine the exact date that Scorecard data was removed using several companies that archive snapshots of websites. The Wayback Machine website last archived the College Scorecard site on February 13, 2015, only two weeks after Ms. Hammer first raised the issue of errors. At this time, Ms. Hammer can only verify that erroneous College Scorecard data was available on February 13, 2015, but was deleted by March 18, 2015.

MARY LYN HAMMER – Congressional witness, non-federal negotiator and witness for the U.S. Department of Education (DOE), and seasoned education advocate is the entrepreneurial founder, president, and CEO of Champion College Services. Her belief that education is the vehicle for making dreams come true has led her into a life-long passionate fight, beginning in 1987, to rectify problems in the higher education industry to insure future participation for all students. During her career in higher education, she has touched more than 3 million students’ lives through her companies and advocacy. Ms. Hammer’s company Champion College Services (now in its 26th year of business) offers default prevention for federal and private student loans, job placement verification, skip tracing, consulting services, and custom surveys for students, alumni, and employers. Champion teaches students how to repay loans but does not collect money on behalf of schools.

Ms. Hammer’s accomplishments include numerous state, regional, and national awards and recognitions over the years in both the higher education industry and in professional business arenas. She has participated in training sessions and workshops for numerous state, provincial, regional, national, and private associations in both the U.S. and Canada in a continuing effort to share her experiences and knowledge. Ms. Hammer has had several hundred articles published in numerous higher education magazines.

Contact Information: Mary Lyn Hammer // Founder, President and CEO // Champion College Services // 480-222-4314 // info@championcollegeservices.com or info@marylynhammer.com // www.marylynhammer.com