Enhance Pell Grant Program...By Eliminating ATB Tests As Qualifier for Federal Aid

Recently in a guest post for Higher Education Blog, Mark Kantrowitz recommended doing more to minimize debt taken on by low-income students.  His proposal:  to leverage supplemental Pell Grant dollars with institutional grants for the neediest students: 

"Congress could establish a supplemental annual $2,500 grant for zero-EFC Pell Grant recipients that would be contingent on the college agreeing to replace all loans with grants in the financial aid packages of students who received this grant. Such a policy would challenge colleges to increase the amount of need-based institutional aid they provide to students with exceptional financial need. The availability of these funds would encourage zero-EFC students to enroll at colleges that adopted no loans policies, putting pressure on colleges with less generous financial aid policies. It would also encourage elite colleges that already have no loan policies to increase the number of Pell Grant recipients they enroll."

His estimate of cost to the federal government for this program was $1.8 billion to $7.0 billion.  He then proposed a few potential solutions of where that money could come from. 

After listening to the House hearing this morning, I think I may have an answer.  Eliminate Ability-To-Benefit tests as a qualifier for federal student aid.  OK, deep breath, serenity now, here comes the barrage of comments from the test publishers and schools that have a vested interest in maintaining the status quo. 

So, let me give you my rationale:  

• ATB tests have been around for a while with no proof of efficacy (I searched and did not find; please send me data if you have it).  I am not sure exactly how long they have been around, but there was a reference to a statutory change to the testing procedures in 1992 in the testimony from Ms. Mitchelson today, so assume that it has been at least 20 years.  That has certainly provided ample time for test publishers, schools and the Department of Ed. to build a case that proves that students who pass an ATB test are qualified for post-secondary work.  There may be data out there but I found it notable during the hearing that no mention was made of the effectiveness of these tests. 

• 12 billion reasons.  Ms. Mitchelson, in her testimony, estimated that this was the dollar amount of federal aid (I assume this includes some combination of federal grants and loans) taken out by students who qualified through an ATB test.  What returns are taxpayers getting for that money?  Again, no data provided about outcomes (persistence, completion, default rates) for this specific student population.  In the absence of data, it is pretty easy to assume that someone who qualifies for federal student aid through a short test might be a little less committed to their education than someone with a (non-diploma mill) high school diploma or GED and that appears to be the case...

• No better source than Harris Miller, Career College Association CEO and President,  noted at today's hearing that colleges are cutting back on their ATB population and for good reasons (paraphrase based on my notes):

"Some schools are cutting way back on ATB students.  This can be both a blessing (less likely to have fraud) and curse for society (need to have more educated workforce).  Our schools are cutting way back on ATB because of concerns about 90/10, cohort default rates and graduation rates.  Many schools cutting back on their ATB population."  

So, there you have it, what concerns the career colleges about the ATB population that the U.S. taxpayer might want to know?  "Concerns about 90/10, cohort default rates and graduation rates."  If the career colleges are concerned enough to "cut way back" on this population, perhaps it might be time for the U.S. taxpayer to make a similar decision.  Notwithstanding the above mentioned reasons, another added benefit of eliminating ATB tests would be to eliminate the need for the regulatory infrastructure to oversee the test publishers, test administrators and testing locations (yes, a smaller government proposal).

For those who argue that eliminating the ATB test as a pathway to federal student aid is restricting access to higher education, I would have to agree.  It is restricting access to a population that appears to have much lower retention and completion rates and higher default rates.  If the hurdle of requiring a GED for federal aid weeds out the less serious, less committed and less prepared students, what is so bad about that?  Is it good public policy to continue to provide post-secondary access to all, load up the most likely not to succeed with large amounts of debt, and then pretend we are surprised when cumulative default rates are projected to exceed 40% for certain types of borrowers?  In an era where the U.S. has seen their educational standing in the world decline significantly in the decade, tough decisions need to be made today about allocating scarce resources to their most productive uses.  Eliminating the ATB test as a qualifier for federal aid would be a move in the right direction. 

Comments

[Budgeteer]

I doubt you will find "proof of efficacy" of ATB tests at the Department of Education, inasmuch as research and evaluation of any kind dealing with student financial aid is virtually non-existent. This is by design -- or, to put it more bluntly, because of pressure from higher education institutions, lenders, trade associations, and all manner of other groups that would rather not have anyone look into such matters.