Tough Love:

Bottom-Line Quality Standards for Colleges

TO THE POINT

 Roughly $180 billion in federal student aid and tax benefits are provided 

each year to colleges and universities with virtually no consideration 

of institution performance on low-income student access, degreecompletion, and post-enrollment success measures.

 Some 600,000 undergraduates attend four-year colleges that fall below 

the barest minimum standards of institutional success, including dropout rates in excess of 85 percent. Over $15 billion is distributed annually 

to more than 300 colleges that qualify as engines of inequality, dropout 

factories, or diploma mills.

 Recommended is targeted assistance to persistently underperforming 

public and nonprofit colleges and tough consequences, including 

cutting off federal aid, for those institutions that fail to improve within a 

reasonable period of time. 

HIGHER EDUCATION JUNE 2014
The federal government provides 

roughly $180 billion in the form of 

student financial aid and tax benefits 

to American colleges and universities 

in a typical year. 

When the checks are written, 

an institution’s performance on 

access, completion, and 

post-enrollment success 

measures essentially doesn’t matter.

Copyright © 2014 The Education Trust. All rights reserved.
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 1

The world is changing. Physical stamina and a 

good work ethic are no longer enough to secure 

a stable future. Obtaining a quality education, 

especially a college education, is the surest way to 

gain a lasting foothold in today’s economy.1 Most 

Americans realize this, and as a result, college 

aspiration and college-going rates are rising 

among all demographic groups — rich, poor, 

white, and students of color.2

But U.S. college graduation rates are among 

the lowest in the developed world.3 Less than 

two-thirds of students who start full time at a 

four-year college earn a degree from any college 

within six years of initial enrollment; among 

those who start at two-year colleges, fewer than 

a quarter earn a credential within three years of 

initial enrollment.4 Moreover, the way federal 

and state governments currently finance higher 

education — mostly on the backs of students and 

their families — leaves both those who finish 

college and those who don’t with unprecedented 

levels of debt. Just when they would normally be 

ready to buy a house, car, or make another major 

investment, many former students are struggling 

to meet — if not outright defaulting on — their 

student loan obligations.5

To make matters worse, college-going rates, 

graduation rates and rates of high student loan 

debt all track family income and race.6 While 

roughly 8 out of 10 young people from families in 

the top income quartile earn at least a bachelor’s 

degree, only 1 in 9 young people from families 

in the bottom income quartile do the same by 

age 24 (Figure 1). Similar disparities exist by race: 

Young white adults earn bachelor’s degrees at 

nearly twice the rate of African Americans and 

nearly three times the rate of Latinos (Figure 2). 

Some would argue these troubling trends are 

mostly about the students, many of whom arrive 

at college underprepared. But it turns out that at Michael Dannenberg is director of higher education and education 

finance policy, and Mary Nguyen Barry is higher education research 

and policy analyst at The Education Trust.

Tough Love: 

Bottom-Line Quality Standards for Colleges

BY MICHAEL DANNENBERG AND MARY NGUYEN BARRY
2 THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014

PROPOSAL AT A GLANCE

THE EDUCATION TRUST’S PROPOSAL FOR MINIMUM INSTITUTION OF 

HIGHER EDUCATION PERFORMANCE STANDARDS 

Raise the Floor Above the Current Bottom 5 Percent 

Minimum Standards for Low-Income Student Access and Degree Completion

Pell, full-time freshman enrollment: 17 percent 

Six-year, full-time freshman graduation rate: 15 percent

Student loan repayment rate (optional interim proxy three-year cohort default rate: 28 percent) 

Time Frame for Improvement 

Fair notice of new minimum performance standards (at least one year)

Opportunity to appeal designation for those institutions that may be the only option within a certain geographic area or that overwhelmingly serve non-first-time, full-time students but perform better with those 

students than with first-time, full-time students

Federal monetary and technical assistance for institutions below graduation and loan repayment standards

Low-access colleges have three years to improve, succeeding if the average Pell enrollment rate over the next 

three years equals or exceeds 17 percent.

Low-graduation colleges have four years to improve, with two additional years if they are on track to graduate 

at least 15 percent of students by the end of six years, succeeding if the average graduation rate during this 

time frame equals or exceeds 15 percent. 

Low-loan repayment colleges will also have time to improve. A specific time frame is to be determined upon 

availability of data, but should be, at a minimum, at least three years. 

Sanctions for No Improvement 

Low-access “Engines of Inequality” will be subject to losing institutional grant and tax benefits, including taxexempt bonds to nonprofits and the charitable interest deduction to both the institution and affiliated foundations. 

Low-graduation “College Dropout Factories” and low-loan repayment “Diploma Mills” will be subject to losing 

institutional grant and tax benefits as well as all eligibility to receive federal student aid, including grant, loan, 

and tax aid.

A Rolling Benchmark 

As institutions evolve and improve over time, a new 5 percent standard will be updated every three to six years 

to encourage continuous improvement.
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 3

every level of preparation — from institutions 

that serve only impeccably prepared students to 

those that serve the most underprepared — some 

colleges consistently do a much better job than 

other institutions serving exactly the same kinds 

of students. 

And yet, regardless of outcomes, nearly all colleges 

continue to receive taxpayer dollars, year after 

year after year. Federal dollars flow to institutions 

that graduate almost all their students and those 

that graduate almost none; institutions that serve 

their “fair share” of students from lower income 

families, and those that don’t; and institutions 

whose students graduate with manageable debt 

and are able to turn their degrees into decent 

jobs that support loan repayment, as well as 

institutions whose students carry too much debt 

and leave with no degree or a worthless one. 

In fact, the federal government provides roughly 

$180 billion in the form of student financial 

aid and tax benefits to American colleges and 

universities in a typical year. (See “How Does the 

Money Flow?”) When the checks are written, an 

institution’s performance on these three critical 

measures — access, completion, and postenrollment success — essentially doesn’t matter. 

This hands-off approach stands in stark contrast 

to what the federal government asks in return for 

a much smaller investment in elementary and 

secondary (K-12) education. To qualify for federal 

K-12 dollars each year, states and school districts 

have had to set improvement goals for every 

major demographic group of students they serve, 

and schools are held accountable for meeting 

those goals. Schools that consistently perform in 

the bottom 5 percent are subject to much stronger 

interventions.

The theory of action in higher education has been 

different. In a country with what has been viewed 

as the best higher education system in the world, 

the primary role of the federal government has 

been to help students from low-income families 

afford the cost of attendance. Basically, all that has 

been considered necessary to guarantee quality is 

a peer-review process called accreditation. 

This policy framework might be acceptable if the 

United States was still comfortably ahead of its 

competitors in educating the nation and its future 

workforce. But postsecondary attainment levels of 

U.S. young adults have dropped from first in the 

world to middle of the pack.7

If we are to return to being a global leader in the 

education levels of our workforce, no involved 

party — high schools, government, or institutions 

themselves — can afford to sit idly by and watch 

while we fail to maximize our investment in the 

nation’s future. 

Fortunately though, some promising work is 

already underway. 

• After years of academic standards that 

stopped well short of what colleges require 

for entry, state leaders have adopted new K-12 

standards that match the skills and knowledge necessary for students to be truly college ready at the end of high school. These 

standards require more of both students and 

teachers; as implementation efforts proceed, 

college preparation levels are expected to rise.

• States have also stepped up to adopt goals 

and performance funding aimed at increasing degree completion. Already, 33 states 

have adopted college completion goals, and 

27 have implemented or are in the process of 

implementing state funding systems that reward institutions for their performance with 

students.8

• Some colleges have shifted their focus away 

from just access to access and success, making 

student success an institutionwide priority. 

With strong campus leadership from university presidents and provosts and data systems 

that track student progression and credit 

accumulation, colleges like Florida State, 

Georgia State, and San Diego State have made 

major strides in graduating more of their 

students — especially students of color and 

low-income students — than peer institutions 

throughout the country.9
4 THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014

Indeed, among all the major players, only the 

federal government sits passively on the sidelines, 

writing check after check for higher education 

with almost no consideration of institutional 

performance. In continuing to do so, the federal 

government undermines the message that results 

matter — and that what individual colleges do 

makes a difference. 

So, how could the federal government play a more 

productive role — one that reinforces work that 

is already underway while mobilizing institutions 

that lag behind? By establishing minimum 

performance standards that align with its core 

purposes for investing in financial aid — lowincome student access and meaningful degree 

completion — and giving institutions several 

years to meet those standards. 

The process should start with minimum 

performance standards for four-year colleges. 

Their degree-oriented missions are clear, and 

publicly available data on completion are 

reasonably strong. Later, standards should also 

be set for two-year colleges. But because available 

data are weaker and their missions more complex 

— including transfer to a four-year college, 

short-term job training, and non-degree, lifelong 

learning opportunities — this will take additional 

time. 

For K-12 education policy, both the executive 

branch and members of Congress over time have 

HOW DOES THE MONEY FLOW?

A finer lens on the nature of federal investment in higher education shows that resources are distributed to two 

main groups. There are: 1) resources that go directly to colleges, universities, and affiliated foundations in the 

form of tax breaks and grants that provide institutional support and student financial aid; and 2) resources that 

go directly to students and families in the form of tax credits and deductions, grants, and student loans. Some 

of these resources, like Pell Grants, are direct expenditures of federal dollars. Other benefits, like student loans, 

represent outflows of dollars, but do not equate to actual spending since the majority of these dollars will be paid 

back. And finally, benefits like tax credits, deductions, and other tax breaks typically offset tax obligations or promote investment in the form of higher charitable giving and also do not count as direct expenditures. 
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 5

come to embrace a framework in which the focal 

point for targeted attention and intervention 

is chronically underperforming schools — the 

bottom 5 percent of all institutions.10 Following 

that example, we suggest identifying a bottom 5 

percent threshold for four-year colleges on access 

and success metrics.i

The basic idea is simple: Draw a line based 

on where the fifth percentile of institutional 

performance currently rests and make that 

the minimum standard all institutions should 

strive to surpass over the next several years.ii As 

is true in K-12, our analyses of the institutions 

that currently fall below that bottom 5 percent 

threshold suggest that not only are they lowperformers relative to other institutions like them, 

but they are objectively low-performers. 

To be clear and similar to K-12 precedent, we 

do not seek identification of exactly 5 percent 

of institutions each year. We also do not suggest 

immediately implementing sanctions for 

persistent underperformance. Rather, we propose:

• Fair notice of new minimum performance 

standards; 

• Opportunity to appeal for those institutions 

that may be the only option within a certain 

geographic area or institutions that overwhelmingly serve non-first-time, full-time 

students and perform markedly better with 

those students than with first-time, full-time 

students; 

• Additional financial and technical assistance 

for public and nonprofit private institutions 

struggling to meet success metrics to help 

them get up to par; and, 

• Sanctions only for those that over three or 

four years do not meet the minimum benchi. The sample of institutions used for the analysis in this paper includes all 

four-year schools that award bachelor’s degrees that have had a cohort of 

first-time, full-time undergraduates within the last three years (N=2,220). The 

bottom 5 percent threshold only applies to colleges without missing data and 

that have at least 30 students in the given cohort (first-time, full-time freshmen 

for graduation rates and freshman Pell enrollment rates). Note that this paper 

uses data from the 2010-11 academic school year as the benchmark year to 

establish initial thresholds for consideration.

ii. After several years, a new bottom 5 percent threshold should be identified 

to encourage continuous improvement. The minimum performance standard, 

therefore, represents a rolling benchmark.

mark on access and success measures. (See 

“Proposal At a Glance.”) 

But on this last point, the federal government 

must be clear: If, after receiving support and time 

to get better, exceptionally and persistently lowperforming colleges do not improve, there must 

be consequences.

The goal should be to spur institutions to 

improve, not to shrink or close them. If we as a 

nation are to get the education of our workforce 

where it needs to be, we need more higher 

education capacity, not less. That said, experience 

teaches us that one more set of goals without 

consequences for not meeting them won’t 

do the job. It won’t galvanize the energy and 

resources necessary to make real improvements in 

education institutions. And it won’t save students 

from the lifetime consequences of debt with no 

degree.

THE COST OF FAILING COLLEGES

Of the total $180 billion federal investment in 

higher education student aid made each year, over 

$100 billion is Title IV aid dispensed only to fouryear colleges in the form of grant, work-study, and 

student loan resources (i.e., non-tax benefits). Of 

that $100 billion, approximately $15 billion is 

distributed to some 300 institutions that currently 

reside among the bottom 5 percent nationally in 

enrolling low-income students, graduating the 

students they serve, or graduating students with 

manageable debt and degrees that can support 

that investment without default.iii

For students, the consequences of grossly 

underperforming colleges are severe. Currently, 

nearly 600,000 undergraduates attend four-year 

institutions that rest in the bottom 5 percent of 

colleges nationally on student success metrics 

that measure the likelihood of graduating and 

repaying student loans.11 Of these students, an 

iii. Low-graduation University of Phoenix campuses alone account for 

over one-quarter ($4.1 billion) of the $15 billion federal student aid dollars 

distributed to colleges in the bottom 5 percent of access and success metrics. 

Source: Education Trust analysis of Title IV Program Volume Reports, from 

Federal Student Aid, U.S. Department of Education.
6 THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014

estimated 100,000 will default on their federal 

student loans within three years of exit.12

For first-time, full-time students attending one of 

the bottom 5 percent of colleges on graduation 

rates, the chances of leaving school with no degree 

are nearly six times greater than the chances of 

graduating.13 New full-time students attending 

failing four-year colleges have only a 1-in-2 chance 

of making it to their second year. And the firsttime, full-time freshmen we lose nationally after 

attending just one year at one of these schools 

leave with nearly $40 million in student loan 

debt,14 which can have a tragic impact considering 

students who drop out with no degree face a 

fourfold increase in their likelihood of defaulting 

on their student loans.15

Likewise, there are serious consequences for 

talented students from low-income families 

who don’t have a chance to attend the mostly 

elite colleges that rank in the bottom 5 percent 

on low-income student access. Many of these 

students will enroll in colleges of lesser quality, 

if any at all, negatively affecting their chances of 

earning a degree.

16 Completion rates for students 

who “under match,” or enroll in less rigorous 

institutions than they are qualified for, are 15 

percentage points lower than similarly wellprepared peers.17 And students with some college 

but no degree have notably lower earnings than 

those who complete a bachelor’s degree.18

THREE PROPOSED STANDARDS

Standard #1. A Bottom 5 Percent Standard for Fair 

Access: At Least 17 Percent of Full-Time Freshmen Are Pell 

Grant-Eligible

Highly selective, low-Pell institutions can enroll more 

low-income students without compromising admission 

standards

To judge an institution’s service to low-income 

student access, analysts traditionally have relied 

on the percentage of full-time freshmen eligible 

for a Pell Grant.19 It’s not a perfect measure, 

because some lower income students — despite 

the best efforts of their colleges — don’t fill out 

the necessary forms to receive a Pell Grant. But it’s 

a well-accepted measure of the enrollment of lowincome students.20, iv

Among all full-time freshmen enrolled at fouryear colleges, roughly 4 in 10 (39 percent) are 

Pell Grant recipients. In colleges that fall in the 

bottom 5 percent, however, fewer than 17 percent 

of freshmen are Pell students, making these 

institutions engines of inequality in a country that 

already has too much.v

Universities falling below the 17 percent Pell 

threshold are mostly selective, private, and 

wealthy — some very wealthy — colleges (Figures 

3 & 4). There are a handful of public institutions 

as well. Together though, these institutions have 

some of the largest endowments in the country. 

If their leaders wanted to, they could invest more 

iv. Note that we have made a deliberate choice for the four-year sector in 

applying a threshold for the percentage of Pell students enrolled in the 

freshman class versus the percentage of Pell students enrolled among all 

undergraduates. This was meant to capture a measure of access alone and 

to remove the success component out of the picture because Pell students 

tend to have higher withdrawal rates and are less well-represented among 

upperclassmen. 

v. We recognize that while some colleges may enroll more than 17 percent 

of Pell students, they may still charge students very high net prices, which 

doesn’t make them paragons of socioeconomic mobility. Devising an 

affordability metric, however, is outside the scope of this paper. We will further 

investigate recommendations around a minimum affordability standard in a 

separate publication.

Figure 3: Which Colleges Are the “Engines of Inequality”?

What types of colleges are in the bottom 5 percent in Pell freshman 

enrollment?

# Public 

Colleges 

(% of 

Sector)

% of 

Bottom 

Five

# 

Nonprofit, 

Private 

(% of 

Sector)

% of 

Bottom 

Five

# ForProfit 

(% of 

Sector)

% of 

Bottom 

Five

Barron’s 

Selectivity

FY2012 

Endowment 

16 (3%) 15% 89 (7%) 83% 2 (1%) 2%

80% in the 

top three 

levels of 

selectivity 

Total: 

$168.8 

billion

Average: 

$1.7 

billion

Median: 

$550.3 

million

Notes: Chart displays statistics for the 107 total colleges with Pell freshman enrollment rates below 17 percent. See 

Figure 4 for a sample listing of four-year colleges and universities that currently rank among the bottom 5 percent on 

low-income student college access and Appendix Table 1 for a full list.

Source: Ed Trust analysis of 2011 IPEDS data on Pell freshman enrollment, 2012 IPEDS data on endowment assets, and 

2011 Barron’s data on selectivity.
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 7

in identifying, recruiting, and enrolling more 

talented students from low-income families.

When pressed, leaders in these institutions 

typically argue they can’t find more low-income 

students or cannot admit them without lowering 

institutional academic standards. But an 

examination of national college admissions test 

data and the actions of individual institutions 

indicate otherwise. The evidence suggests there 

are many more very high achieving young people 

from low-income families than currently enrolled 

in highly selective colleges.21 Some institutions 

work at finding and supporting those students, 

while other institutions do not. 

Middlebury College in Vermont, for example, in 

2011 fell in the bottom 5 percent of all colleges in 

its enrollment of low-income students: 10 percent. 

Yet equally selective institutions like Amherst 

College and Vassar College enrolled more than 

twice as many low-income students, 23 and 27 

percent respectively. We see the same variation 

in the public sector. The University of Virginia, 

which ranks in the bottom 5 percent on service 

to low-income students, enrolled only 13 percent 

Pell students in 2011, whereas the University 

of North Carolina–Chapel Hill and the State 

University of New York at Binghamton enrolled 

20 and 26 percent Pell students, respectively. 

UNC–Chapel Hill and Binghamton University 

have comparable admissions standards to U.Va. 

and fewer financial resources. In fact, U.Va. is 

twice as wealthy as UNC–Chapel Hill and over 75 

times as wealthy as Binghamton.22

More and more research on the “under matching” 

phenomenon indicates that higher Pell 

enrollments at some highly selective universities 

as compared with others are not a fluke: There 

are high-achieving, low-income students whose 

academic credentials place them well within 

the band of elite colleges’ current admission 

standards but who for a variety of reasons do not 

apply to or enroll in these selective institutions. 

Nearly two-thirds of low-income students with 

high grades and SAT scores do not attend the 

most selective institutions for which they are 

qualified, compared with just over one-quarter 

of high-income students with similar academic 

credentials.23

Our own analysis of ACT data suggests the same 

— that if highly selective, low-Pell enrollment 

colleges really tried to become engines of 

opportunity instead of inequality, there are more 

than enough high-achieving, low-income students 

who already meet their admission standard of 

drawing freshmen from the top 10 percent of 

test-takers nationwide.vi Among ACT test-takers 

over the past three years, 20 percent of students 

scoring in the top 10 percent came from lowincome families (self-identified as coming from 

families with incomes below $50,000, the rough 

threshold for Pell eligibility), making surpassing 

a 17 percent standard readily attainable without 

dramatically compromising admissions standards 

(Figure 5).

vi. The median SAT/ACT score equivalent among colleges in the bottom 5 

percent was 1300 (out of 1600), which represents the top 10 percent of scorers 

according to College Board. While data was only available to us for ACT testtakers, that income data is more complete and reliable than the data available 

from College Board for the SAT. Moreover, if 20 percent of ACT test-takers are 

low-income, that suggests that a similar proportion — and larger pool of highachieving, low-income students overall — should exist among SAT test-takers 

as well.

Figure 4: Sample Listing of Colleges Enrolling Fewer 

Than 17 Percent Pell Students in Fall 2010

College Name

% Pell Among 2010 

Entering Class (2011 

Benchmark Year)

FY2012 Endowment 

Funds

Washington University in 

St. Louis (MO) 6% $5.3 billion

Princeton University (NJ) 11% $17.4 billion

Yale University (CT) 13% $19.3 billion

University of Chicago (IL) 15% $5.7 billion

University of Virginia (VA) 13% $4.7 billion

Notes: Full listing of colleges falling in bottom 5 percent in 2011 is in Appendix Table 1. All 

institutions serve at least 30 first-time, full-time students. 
8 THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014

Standard #2: A Bottom 5 Percent Standard for Education 

Success: Graduation Rates of at Least 15 Percent

Institutions with similar demographics can have very 

different outcomes — student demographics are not to 

blame

What do degree success rates look like at the fifth 

percentile among four-year colleges? Currently, 

the bottom 5 percent of colleges have six-year 

completion rates of 15 percent or lower. Over half 

of these college dropout factories are for-profit 

institutions; one-third are nonprofit privates; and 

one-tenth are publics.vii One-fifth are nonprofit 

minority-serving institutions; four-fifths are not. 

Many are largely online colleges (Figures 6 & 7). 

(See “Are IPEDS Graduation Rates Valid to Use?”)

Unlike the colleges that fall below our minimum 

access standard, institutions with success rates 

below the 15 percent standard do not serve 

mostly wealthy, high achievers. Rather, these 

colleges often serve students whose high schools 

left them underprepared for the rigors of 

postsecondary education; many are from lowincome families and are members of racial or 

ethnic minority groups. Not surprisingly, when 

pressed about their success rates, leaders point 

not at their academic standards or institutional 

practices but at their students.

Certainly serving underprepared students makes 

graduating students more challenging. But the 

claim that these low-performing colleges are 

doing “about as well as can be expected” is a ruse. 

Hundreds of colleges prove that demographics are 

not destiny in higher education. 

Texas Southern University, for example, fell 

in the bottom 5 percent of all institutions on 

graduation rates in 2011, graduating only 11.8 

percent of its full-time freshmen within six 

years of initial enrollment. Some 80 percent of 

Texas Southern’s freshmen are from low-income 

families (i.e., Pell Grant recipients); 90 percent 

are from underrepresented minority groups; 

vii. A dropout factory in the K-12 context is a term coined by Bob Balfanz 

and Nettie Letgers referring to high schools with graduation rates below 

60 percent. It has also been used in the higher education context in a 2010 

Washington Monthly article by Ben Miller and Phuong Ly.

Figure 7: Sample List of Colleges Graduating Fewer Than 

15 Percent of Students in 2011

College Name Sector

6-Year Graduation Rate 

in 2011 (Benchmark 

Year)

Concordia College-Selma 

(AL) Nonprofit HBCU 3.4%

East-West University (IL) Nonprofit 7.7%

Colorado Technical 

University-Online (CO) For-Profit 9.4%

University of PhoenixPhiladelphia (PA) For-Profit 10.7%

Louisiana State UniversityAlexandria (LA) Public 12.1%

Notes: Full listing of colleges falling in bottom 5 percent in 2011 is in Appendix

Table 2A. All institutions serve at least 30 first-time, full-time students. 

Figure 6: In What Sector are the “College Dropout 

Factories” Located?

What types of colleges are in the bottom 5% in graduation 

rates?

# Publics 

(% of 

Sector)

% of 

Bottom 

Five

# 

Nonprofits 

(% of 

Sector)

% of 

Bottom 

Five

# ForProfits (% 

of Sector)

% of 

Bottom 

Five

12 (2%) 11% 34 (3%) 32% 59 (15%) 56%

# HBCUs 

(% of 

Sector)

% of 

Bottom 

Five

# HSIs (% 

of Sector)

% of 

Bottom 

Five

# Tribals 

(% of 

Sector)

% of 

Bottom 

Five

10 (12%) 10% 10 (8%) 10% 3 (38%) 3%

Notes: Chart displays statistics for the 105 total colleges that have 

graduation rates below 15 percent. Hispanic-serving institutions (HSIs) are 

defined here as public and nonprofit private institutions whose Hispanic 

FTE undergraduate enrollment comprises at least 25 percent of total FTE 

undergraduate enrollment. See Figure 7 for a sample listing of four-year 

colleges and universities that currently rank among the bottom 5 percent on 

graduation rates and Appendix Table 2A for a full list.

Source: Ed Trust analysis of 2011 IPEDS data.

Figure 5: 20 Percent of Students Scoring Among the Top 

10 Percent on the ACT Are Low-Income

ACT Percentile Rank and Score Percent of Test-Takers Who Are 

Low-Income (<$50,000)

Top 1%: 33 12%

Top 5%: 30 17%

Top 10%: 28 20%

Top 15%: 26 21%

Top 20%: 25 23%

Source: Ed Trust analysis of 2011-13 ACT data.
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 9

and many are weakly prepared for college, with 

a median SAT score of 800 out of 1600 and an 

average high school GPA of 2.7. But so too are the 

students at Tennessee State University and North 

Carolina Central University, yet they graduate 

at rates more than three times as high (35.5 

percent and 38.4 percent, respectively). In fact, 

Texas Southern performs at the very bottom of its 

closest 15 peer institutions and has for many years 

(Figure 8). (See "How Does Ed Trust Define Peer 

Groups?”)

These same differences are clear when we 

compare graduation rates of other bottom 

performers with institutions that are most like 

them. Truett-McConnell College, for example, a 

small private university in Georgia, had one of the 

lowest graduation rates among its peer group — 

graduating only 13.6 percent of students within 

six years of initial enrollment. Meanwhile, peers 

like Averett University in Virginia and Cazenovia 

College in New York serve similar students yet 

graduate them at much higher rates (41 percent 

and 49.5 percent respectively). Or take Western 

International University, a for-profit college 

located in Phoenix. In 2011, it graduated only 

2 percent of all full-time freshmen. Needless 

to say, many other for-profit peers have higher 

graduation rates. 

Indeed, when viewed as a group, the performance 

of nearly all colleges with overall graduation rates 

of less than 15 percent — such as Texas Southern, 

Truett-McConnell, and Western International 

— are concentrated near the bottom of their 

respective peer groups. These college dropout 

factories typically and markedly underperform 

peer institutions serving similar students — 

almost 9 out of 10 fall in the bottom two quintiles 

of their “most similar” institutional peers (Figure 

9). (See “Applying the Graduation Standard at the 

Subgroup Level.”)

Standard #3. A Bottom 5 Percent Standard Indicating 

Preparation for Post-Enrollment Success: Student Loan 

Repayment Rates

Institutions can protect students’ debt investment by 

helping them graduate with meaningful degrees 

So far, we’ve proposed minimum standards for 

access and completion. What about a minimum 

standard for quality? Might some schools grant 

degrees that aren’t worth the paper on which 

they are printed? Would the absence of a quality 

standard encourage institutions to try to improve 

their completion rates by diluting degreegranting standards and simply passing through 

to graduation students who do not exhibit 

the knowledge and skills warranting a degree, 

effectively serving as “diploma mills”?

Frankly, we’re not so worried because for years 

we have studied institutions that have vastly 

improved their levels of student success, and 

virtually all agree that the key is raising standards, 

not lowering them. Nevertheless, our experience 

with existing diploma mills — many of them 

for-profit institutions — convinces us that a postenrollment success metric would be a valuable 

addition in any high-stakes environment. 

But unlike in K-12 education, where states 

regularly assess student learning, there are no 

common, widely used assessments in higher 

education. Moreover, post-graduation earnings 
10 THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014

data — which certainly could help identify 

diploma mills — are still spotty. 

If it chose to, however, the federal government 

could readily collect institution-level data that 

would serve as a reasonable basis for establishing 

a minimum college quality standard: student loan 

repayment rates. Simply put, these rates would 

measure what percentage of the students in each 

institutional exit cohort were able to reduce the 

balance on their loans by at least a single dollar 

during the previous year.24 Given that the federal 

role in higher education revolves so heavily 

around student financial aid and student loans in 

particular, this makes sense as a minimum quality 

standard, both from a student perspective and 

that of the taxpayer.

Student loans are by far the riskiest form of 

federal financial aid. Students who cannot meet 

their debt obligations either because they earn 

a degree with little economic value or because 

they earn no degree at all will confront lifedamaging consequences of bad credit, including 

the inability to take on future debt — like a home 

mortgage or a car loan — and possibly even wage 

and tax garnishment. 

Students whom colleges encourage to take on 

debt should have some minimal chance of 

graduating with a meaningful degree to support 

that investment. This is especially true for lowincome students whose families do not have 

resources to help with education-related debt. 

 ARE IPEDS GRADUATION RATES VALID TO USE?

In order to receive federal financial aid, four-year institutions of higher education must calculate six-year graduation 

rates for all first-time, full-time students. This so-called “IPEDS graduation rate,” like the Pell Grant-eligible freshman 

enrollment rate, isn’t a perfect measure. It ignores the success of part-time and transfer students, and treats all students who leave school as dropouts even if they re-enroll elsewhere. Graduation rates would be a better performance 

metric if these problems were fixed in the IPEDS data collection, and we have long supported such efforts.1

It’s important to note, however, that institution graduation rates typically remain the same, or even decrease, with the 

inclusion of transfer and part-time students. Including transfer students can nudge overall institution numbers up, but 

generally only by a percentage point or two.2 But, because part-time students necessarily take longer to complete 

and complete at substantially lower rates, including such students generally reduces institution graduation rates.3 On 

balance then, we submit the current IPEDS graduation rate metric is adequate to use — at least until we have more 

comprehensive data.

1See Ed Trust comments to the federal comment request on the Integrated Postsecondary Education Data System (IPEDS) 2013-2016.

2 Ed Trust analysis of transfer graduation rates from our Access to Success Initiative. The Access to Success Initiative is a project of 

The Education Trust and the National Association of System Heads that works with 19 state public higher education systems to cut the 

college-going and graduation rate gaps for low-income and minority students in half by 2015. The 300 two-year and four-year campuses 

enroll more than 3.5 million students, nearly 900,000 students of color and over a million Pell Grant recipients.

3 Ed Trust analysis of part-time graduation rates from our Access to Success Initiative. Also, Alexandria Walton Radford, et al., Persistence 

and Attainment of 2003-04 Beginning Postsecondary Students: After 6 Years (NCES 2011-151) (Table 1).
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 11

These students — a majority of federal student 

loan borrowers in a given year — need at least 

some basic level of protection from rip-off schools 

that are unusually likely to damage their futures.25

A minimum standard based on student loan 

repayment rates can serve that protective role, 

while also helping to quantify the success of the 

federal investment. 

Some might argue that the current cohort default 

rate standard the U.S. Department of Education 

uses is more than adequate as a protection 

against diluted degrees. We disagree. While threeyear cohort default rates are currently the only 

quantitative metric the federal government uses 

to measure institutional quality, it’s important to 

be clear about three of the measure’s limitations: 

(1) default represents the final stage of financial 

distress; (2) the current institution eligibility 

threshold attached to the cohort default rate 

metric is arbitrary and fixed; and (3) if institutions 

have sufficient resources, they can fairly easily 

manipulate their cohort default rates. Some 

for-profit college corporations, for example, 

artificially keep their default rates low by pushing 

students into forbearance and deferment, thereby 

delaying defaults until after the time frame during 

which schools are held accountable for results. 

Student loan repayment rates would be a much 

better measure of minimum institutional quality, 

because they reflect an ongoing record of whether 

former students have been able to make at least 

a single payment to reduce their federal student 

loan principal balance in the previous year. 

Colleges that have extremely low repayment rates 

are likely to have both unusually high dropout 

rates and unusually low employment rates, which 

are clear measures of quality problems. 

A student loan repayment measure would protect 

against some of the limitations in using cohort 

default rates, since repayment rates are not as easy 

to manipulate and do not represent only the final 

stage of financial distress. Currently, however, 

repayment rates are not available by institution.

We strongly encourage the Department of 

Education to collect and aggregate repayment 

rate data at the institution level; once that data is 

available, a bottom 5 percent threshold applicable 

to this new metric should be set.viii (See “In the 

Meantime: Using the Cohort Default Rate to Identify 

the Bottom 5 Percent.”)

TIME AND SUPPORT FOR LOWPERFORMING COLLEGES TO IMPROVE

Colleges that are low-performers on any of these 

three minimum benchmarks need fair notice 

of the new requirements (at least one year), an 

opportunity to appeal, and time to improve. 

Examples of successful appeals may include 

colleges that are the only postsecondary education 

option within a certain geographic area, or 

colleges that overwhelmingly serve non-first-time, 

full-time students and can provide evidence that 

they perform markedly better with those students 

than with first-time, full-time students. 

Recognizing that low-performing colleges, 

especially nonprofit private and public 

institutions, are sometimes under-resourced, the 

federal government should be prepared — as it 

has been for the bottom-performing K-12 schools 

— to provide resources to support improvement 

efforts. For-profit institutions should not, 

however, receive additional federal funds under 

this proposal because the majority already receive 

75 percent or more of their revenues from the 

federal government and because their explicit 

business model allows them to access capital 

needed to support student success. 

Many of the problems underperforming 

institutions confront, however, likely transcend 

monetary issues. As has been true in K-12 

education, it may take structural change and 

unorthodox authority for new leaders: Simply 

sending a new president into a low-performing 

college, but then tying his or her hands with 

archaic personnel or budget rules won’t be 

sufficient. 

viii. We recommend this until the day comes when an invalidating percentage 

of students are enrolled in income-based repayment, at which point a new 

metric for post-enrollment success should be determined. With 11 percent of 

borrowers enrolled in income-based repayment currently, we are far from that 

day.
12 THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014

IN THE MEANTIME: USING THE COHORT 

DEFAULT RATE TO IDENTIFY THE BOTTOM 

5 PERCENT

Until overall loan repayment rates are made available 

by institution, one option to consider is to establish 

a bottom 5 percent threshold based on three-year 

cohort default rates. A bottom 5 percent threshold 

applied to fiscal year 2010 three-year cohort default 

rate data would yield a 28 percent benchmark,1

meaning more than 1 in 4 former students are struggling to find a job with an adequate income to make 

student loan payments within three years of exit. 

This difficulty may be a reflection of two major factors: 1) Either a college produces many dropouts with 

significant debt and no degree from which to reap 

increased earnings; or 2) a college produces graduates with high debt and degrees with scant economic 

meaning or value in the labor market. In either case, 

these institutions are not a good bet either for students or for federal dollars.

Similar to graduation rates — and as has happened 

in the past with cohort default rates — we expect 

that most of the institutions that initially fall below 

our recommended cohort default rate threshold will 

improve with a combination of attention and support. 

Institutions can improve their default rates not only 

by raising their graduation rates, but also by implementing concrete strategies to lower defaults, such 

as providing individual counseling on loan repayment 

options before and after students leave campus. 

In the past, we have seen a number of institutions, 

minority-serving institutions in particular, take serious, genuine, and coordinated action to work with 

their students in these ways, resulting in a significant 

reduction in school cohort default rates.2

Although graduation rates and default rates are correlated, among the bottom 5 percent of institutions 

on graduation rates and default rates, separately 

considered, only 20 colleges underperform on both 

measures, indicating that default rates do indeed 

point out something different than the graduation rate 

metric (Figure A). 

1. In addition to reducing the current cohort default rate 

threshold from 30 percent to 28 percent under this option, 

we would also propose that institutions must maintain a 

three-year average default rate below 28 percent. Under 

current law, institutions are “safe” if they can keep their 

default rate below 30 percent in any given year. Moving to 

a three-year average would make institutions attend to the 

ability of their students to repay loans on a more consistent 

basis. Regardless, the 28 percent threshold could and should 

be regularly updated every few years, as we propose with 

our access and success metrics, to encourage continuous 

improvement.

2. Dillon, E. and Smiles, R. Lowering Student Loan Default 

Rates: What One Consortium of Historically Black Institutions 

Did to Succeed, Education Sector: 2010.

WHAT TYPES OF COLLEGES ARE IN THE BOTTOM 5 

PERCENT IN COHORT DEFAULT RATES?

# Publics 

(% of 

Sector)

% of 

Bottom 

Five

# 

Nonprofits 

(% of 

Sector)

% of 

Bottom 

Five

# ForProfits 

(% of 

Sector)

% of 

Bottom 

Five

5 (1%) 4% 34 (3%) 30% 75 (19%) 66%

# HBCUs 

(% of 

Sector)

% of 

Bottom 

Five

# HSIs 

(% of 

Sector)

% of 

Bottom 

Five

# Tribals 

(% of 

Sector)

% of 

Bottom 

Five

16 (19%) 14% 18 (14%) 16% 0 (0%) 0%

Notes: Chart displays statistics for the 114 total colleges that have default rates 

exceeding 28 percent. Hispanic-serving institutions (HSIs) are defined here as public and 

nonprofit private institutions whose Hispanic FTE undergraduate enrollment comprises 

at least 25 percent of total FTE undergraduate enrollment. Twenty of these colleges also 

do not meet our proposed graduation rate benchmark of 15 percent. See Appendix Table 

3 for a full listing of four-year colleges and universities that currently rank among the 

bottom 5 percent on default rates. 

Source: Ed Trust analysis of official FY2010 three-year cohort default rate data from the 

Department of Education, and 2011 IPEDS data. 
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 13
14 THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014

During a period of initial notice of 

underperformance, the federal government should 

support contracts between entities that have been 

successful in guiding institutional improvement 

and leaders (governing boards, state officials, 

and campus leaders) of public and nonprofit 

private institutions with low graduation and low 

loan repayment rates that show a commitment 

to improvement. Outside groups can help 

assess institutional challenges and provide 

recommendations for improvement, technical 

assistance, and support. Institution leaders can 

and should facilitate a campuswide culture of 

inquiry into student success and improvement.26

Department of Education leaders should use 

their influence to broker assistance from major 

national foundations and corporations. The goal 

should be to improve institutions, not close them. 

(See “It Can Be Done: Salish Kootenai College.”) 

But all this support needs to be accompanied by 

clear deadlines and real consequences. Without 

those, state and institutional leaders won’t have 

the leverage they need to bring about change fast 

enough to make a difference. 

Three Years to Improve Pell Enrollment Rates 

Colleges without at least 17 percent Pell student 

freshman enrollment will have three years to raise 

their enrollment of low-income students. This 

is a sufficient period of time for the admissions 

staff, enrollment management team, and other 

school administrators to adjust recruiting and 

financial aid practices to increase Pell enrollment 

in the freshman class. Consider the success of 

institutions like Franklin & Marshall College: 

Despite being in the bottom 5 percent of lowaccess colleges in 2011, Franklin & Marshall has 

since markedly improved low-income student 

enrollment, and did so quickly following a 

commitment by institution leadership. (See “It 

Can Be Done: Franklin & Marshall College.”) 

Based on the Franklin & Marshall example and 

our analysis of ACT data, we submit that a threeyear improvement window provides institutions 

with sufficient time to exhibit meaningful growth; 

colleges will be deemed successful only if the 

average Pell freshman enrollment during the 

three-year improvement time frame is at least 

17 percent. Averaging three years of enrollment 

information will help guard against any natural 

data fluctuations as well as deter an unintended 

consequence where institutions may enroll more 

low-income students only in one of three years to 

avoid sanctions (Figure 10). 

Four Years to Improve College Graduation Rates 

When and where leaders are truly intentional 

about all matters related to student success, 

colleges can change completion and postenrollment success patterns even for students 

who are well into the undergraduate experience.27

However, in order to provide institutions with a 

fair amount of time to intervene with an entire 

cohort of students and form practices that will 

permanently affect graduation rates, we propose 

providing institutions graduating less than 15 

percent of first-time, full-time students at least four 

years to improve. 

Moreover, at the end of four years, if an institution 

can furnish data showing that they are on track to 

graduate at least 15 percent of its students over the 

next two years (to align with a six-year graduation 

rate), the secretary of education should be able 

to grant those institutions an additional two-year 

Figure 10: Timeline for Improvement

1 YEAR YEAR 

1

YEAR 

2

YEAR 

3

YEAR 

4

YEAR 

5

YEAR 

6

ACCESS:

17% Pell 

Enrollment

RECEIVE 

NOTICE OF 

UNDERPERFORMANCE

3 years to improve

SUCCESS:

15% 6-Year 

Graduation Rate

4 years to improve

2-year grace 

period if 

on track to 

graduate 

15+% of 

students

POSTENROLLMENT 

SUCCESS:

Loan Repayment 

Rates or 

Revised CDR in 

Interim

3 years to improve
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 15

grace period. To ensure meaningful, consistent 

improvement and provide some flexibility 

for natural data fluctuations, colleges will be 

considered successful if their average graduation 

rate during this improvement time frame is at least 

15 percent. 

Three Years to Improve Student Loan Repayment Rates

When student loan repayment rates become 

available at the institutional level and a bottom 

5 percent threshold is established, colleges with 

low loan repayment rates should also receive time 

to improve. We suggest not making a decision 

on the specific time frame for improvement until 

the data becomes available, in order to determine 

a time period most appropriate to this metric. 

But we would suggest institutions should have 

at least three years to improve their repayment 

rates, and that upon notice of underperformance, 

institutions have to evidence at least a three-year 

average repayment rate that is above the threshold 

to demonstrate meaningful improvement.

The bottom 5 percent threshold suggested for each 

metric is meant to be updated and recalculated 

regularly to represent the evolution (and expected 

improvement) in the field on the whole. We 

recommend new bottom 5 percent thresholds 

be recalculated at the end of each improvement 

time frame: every three years for Pell freshman 

enrollment and repayment rates or cohort default 

rates, and every six years for graduation rates. 

These thresholds will continue to be updated over 

time until they are no longer needed, such as if 

all institutions enroll a proportion of low-income 

students that equals a high percentage of the 

national average of such students.

ULTIMATE CONSEQUENCES FOR CHRONIC 

LOW-PERFORMERS

If at the end of multi-year grace periods for 

improvement, relevant colleges still are not rising 

above the bottom 5 percent threshold established 

years prior, the federal government has to take 

the next step: reduce if not eliminate its financial 

investment in institutions that consistently fail 

to serve their students and the nation. Vulnerable 

students, first and foremost, and a finite public 

investment ultimately must be protected from 

continued harm.

In the case of chronically and dramatically 

low-performing colleges, the two categories of 

federal aid — (1) tax breaks and grants that go to 

colleges, universities, and affiliated foundations; 

and (2) tax benefits, grants, and loans that go to 

students and families — do little to promote the 

primary purposes of federal investment in higher 

education: low-income student access and degree 

completion. Indeed it could be argued that they 

serve instead to protect and even enhance the 

attractiveness of weak institutions, many of whose 

students would be better served elsewhere. We 

suggest federal resources be leveraged differently 

to better serve the national interest in improving 

postsecondary outcomes, especially for lowincome students (Figure 11).

 Figure 11: Summary Chart of Ultimate Consequences

Institutional 

Tax

Institutional 

Grants

Student 

Tax

Student 

Grants 

& Loans

Charitable 

deductions for 

institutions 

and their 

affiliated 

foundations

TRIO

Campusbased aid

Competitive 

federal-state 

money

AOTC

Lifetime 

learning 

credit

Student loan 

interest 

deduction

Personal 

exemption 

for students 

age 19 and 

over

Qualified 

tuition 

programs

Pell

Stafford loans

PLUS loans

Access:

Pell 

Enrollment

“Engines of 

Inequality”

X X

Success:

Graduation 

Rates

“Dropout 

Factories”

X X X X

PostEnrollment 

Success:

Loan 

Repayment 

Rates 

“Diploma 

Mills”

X X X X
16 THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014

Engines of Inequality — Bottom Performers in Enrolling 

Students From Low-Income Families

Colleges that effectively and repeatedly choose to 

operate as engines of inequality, failing to enroll 

a bare minimum percentage of low-income 

students, should lose access to institution-based 

federal aid. If there is to be a shared responsibility 

for college access and success, then at some point 

the federal government should no longer permit 

low-access institutions of higher education — or 

their affiliated foundations — to take advantage 

of the tax code to receive tax-deductible charitable 

donations or institutional campus-based aid 

in the form of the Supplemental Education 

Opportunity Grant and federal work-study, or 

competitive federal dollars, including those 

awarded through the TRIO and GEAR UP 

programs and any future federal-state partnership 

initiative.28 

The mostly selective, private, and fairly wealthy 

colleges that might be affected by this proposal 

may argue that their services — to teach, conduct 

research, and provide public service — are critical 

to the overall well-being of a democratic society; 

as such, they are fulfilling their mission as public 

charities and should continue to receive some 

federal tax relief. But colleges that receive their 

tax-exempt status on the basis of their educational

mission have a primary responsibility to serve 

the public good through education. By not 

supporting even a minimum number of qualified, 

low-income students, they fail the public interest 

in a crucial way — by calcifying rather than 

ameliorating societal inequities. 

For institutional grants, the federal government 

originally provided TRIO and campus-based aid 

as supplemental funds to help institutions of 

higher education and others provide outreach 

and support to students from disadvantaged 

backgrounds. But it’s clear that those dollars 

are not achieving their intended impact at these 

colleges, if after repeated years, they still do not 

enroll a bare-minimum percentage of low-income 

students. These scarce funds would be better spent 

elsewhere, i.e., at institutions that do prioritize 

needy students and contribute to the public good. 

To be clear, we recommend these colleges lose 

access only to institution-based aid, not that 

their students lose access to direct student-based 

financial aid. Our goal is to protect and help 

needy students. Low-income and hard-pressed, 

middle-income students who currently attend 

these low-access colleges will still maintain 

access to Pell Grants, federal student loans, and 

student tax benefits — particularly the American 

Opportunity Tax Credit — ensuring that they are 

able to continue to attend and complete their 

studies. 

College Dropout Factories and Diploma Mills — Colleges 

Failing to Improve on Completion or Success

Postsecondary education institutions that 

continue to operate as college dropout factories 

after four-to-six years of consistent failure or 

continue to operate as diploma mills whose 

students cannot earn enough post-graduation 

to repay their loans without default should face 

serious consequences: They should be subject to 

losing not only institutional-based aid, but also 

eligibility to receive all forms of federal studentbased aid, including federal student loans.ix

Why such a seemingly draconian step? Because 

prospective students should not enroll in these 

poor-performing institutions on the taxpayers’ 

dime. It’s neither an efficient nor effective use of 

finite public resources. And the virtual absence 

of institutional accountability makes the federal 

government complicit in harming vulnerable 

students who are highly likely to be financially 

injured by these institutions or at the very least 

lose ability to access time-restricted Pell Grant 

funds.

In the end, taking away all federal aid is the only 

way to send an unequivocal message to students 

ix. There is, of course, the concern that if we cut off all federal aid, students still 

wanting to go to these schools will have to turn to private loans, which carry 

higher interest rates and less borrower protection. While that is a theoretical 

possibility, we think it’s unlikely a private bank will lend to students to attend 

an institution labeled a college dropout factory or diploma mill. In fact, given 

how risky an investment these institutions of higher education are, it would 

make sense for the Consumer Financial Protection Bureau — a supervisor of 

private lending institutions — and/or bank regulators to consider regulating 

how much of a private lender’s portfolio may be tied up in dropout factories 

and diploma mills.
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 17

APPLYING THE GRADUATION STANDARD AT THE SUBGROUP LEVEL

Should we apply the graduation standard to demographic subgroups? Graduation rate data make it very clear 

that at the aggregate level and at most institutions, there are significant differences in the rates at which different subgroups of students complete. On average, black, Latino and American Indian freshmen complete their 

degrees at rates far below those of white and Asian students.1 The pattern is the same for Pell students.2 But 

these gaps are not inevitable: At institutions that work hard to support their students, there are often small or no 

gaps between student groups.

Given that low-income students and students of color now constitute a majority of the young people in this 

country, it is important for the federal government to signal its concern about these gaps and the need for them 

to be closed.

Metrics to this effect could be included in any overall postsecondary accountability system. But there is no 

reason to wait for a comprehensive system to be developed, tested, and put into place. Instead, the federal government could send a powerful signal of its concern by applying a minimum graduation rate standard not just 

at the institution level, but also separately for every significant group of students. For example, while an institution might have an overall six-year graduation rate of 32 percent, if its graduation rate for, say, black or Latino 

students fell consistently below the 15 percent standard, that institution would have to work hard to improve 

its record. (See Appendix Table 2B for a listing of colleges that serve one or more subgroups of students inadequately.) 

Consider, for example, Wayne State University. 

Wayne State’s overall six-year graduation rate 

in 2011 was 26 percent — nothing to write home 

about for sure. But the university did a particularly 

abysmal job serving African American students, 

over 90 percent of whom fail to complete a degree 

within six years of initial enrollment. That’s right; 

Wayne State graduated less than 10 percent (7.5 

percent in fact) of its African American students in 

2011. It doesn’t have to be this way: Old Dominion 

University in Virginia — a Wayne State peer serving a similar student body — graduated African 

American students at a rate nearly 40 percentage 

points higher (47.4 percent). 

Clearly, Wayne State needs a push to address 

the needs of its black students more seriously. Its 

black-white graduation rate gap of 31 points is considerably larger than the national average of 23 points.3 Yet 

Wayne State is not alone. Some institutions are clearly more vigilant than others at making sure all their students have the best possible chance of success.

Interestingly though, institutions like Wayne State may need a push for an even bigger reason. When we examined the subset of colleges with graduation rates below 15 percent for a particular subgroup(s), the majority 

of these institutions also have overall graduation rates that are substantially lower than their peer institutions. 

More than 8 in 10 fall toward the bottom of their peer groups. The median college within this group of institutions graduates only 23 percent of all students. So while these colleges may have overall graduation rates 

exceeding 15 percent, their overall performance with students is still lacking.

_________________

1

National Center for Education Statistics (NCES), Enrollment in Postsecondary Institutions, Fall 2012; Financial Statistics, Fiscal 

Year 2012; and Graduation Rates, Selected Cohorts, 2004-2009, First Look (Table 3).

2

Ed Trust analysis of 2003-04 Beginning Postsecondary Students survey, from the U.S. Department of Education.

3

 NCES, Enrollment in Postsecondary Institutions, Fall 2012; Financial Statistics, Fiscal Year 2012; and Graduation Rates, Selected 

Cohorts, 2004-2009, First Look (Table 3).
18 THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014

HOW DOES ED TRUST DEFINE 

PEER GROUPS? 

For the past 10 years, The Education Trust, through 

its College Results Online Web tool, has established 

a methodology to identify each college’s group of 

peer or “similar” institutions. Our algorithm is public 

and has been vetted by a series of outside technical 

experts over the years.

For public and private nonprofit institutions, we have 

identified 12 institutional and student-related characteristics that significantly predict six-year graduation 

rates. Our 2011 peer groups, for example, were based 

on the following variables:

Institutional Characteristics

Sector (public vs. private)

Size (number of Full-Time Equivalent undergraduates)

Status as a commuter campus

Barron’s admission selectivity

Student-related expenditures per Full-Time Equivalent undergraduate

Carnegie classification

Percent of degrees awarded in STEM

Student Characteristics

Estimated median SAT or ACT equivalent of freshman class

Average high school GPA among college freshmen

Percent of Pell recipients among full-time freshman 

class

Percent of undergraduates enrolled part-time

Percent of Full-Time Equivalent undergraduate students age 25 and over

The same algorithm can’t be used for for-profit institutions because certain variables are not available and/

or applicable to this sector (e.g., SAT, Barron’s, GPA). 

Instead, we use filters on the same characteristics to 

ensure similar colleges are compared to each other. 

See our Frequently Asked Questions section at www.

collegeresults.org for more information, including 

weights associated with each characteristic utilized in 

identifying peer groups.

RESTRICTING CHOICE? 

Some low-performing institutions on graduation rates or default rate metrics are for-profits or 

minority-serving institutions. While we expect most 

of these institutions to improve with the pressure 

and support provided in this proposal, some observers may still be concerned that this proposal would 

restrict student choice within particular sectors. 

Let’s examine the numbers. Currently 600,000 undergraduates — representing 6 percent of all undergraduates and just slightly over 10 percent of 

African American, Hispanic, and American Indian 

students — are concentrated in institutions that are 

bottom performers on our proposed student success 

measures.1 If these bottom performers don't improve 

after time and support to do so, and tough sanctions 

take effect, will new students seeking an education 

at a for-profit, online, or minority-serving institution 

continue to have options to receive a college education at the same type of institution? 

In every case, the answer is yes. Regardless of 

institution type, only a small percentage of seats are 

affected. The only exception is tribal colleges, and 

many of these are likely to be exempted based on 

geographic isolation.

1. This includes first-time, returning, full-time, and part-time students attending 

the 199 colleges that fall in the bottom 5 percent on graduation rates and 

student loan default rates. Student loan default rates are a proxy for those 

institutions that might underperform on a loan repayment metric.
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 19

that these schools will not serve them well and 

they should enroll elsewhere. Sadly, it may also be 

the only way to send an unequivocal message to 

those who run these institutions that it is neither 

ethical nor acceptable to take hard-earned money 

from students when you don’t have the capacity 

to see them through to the degrees they seek. 

Notice of non-eligibility for federal student aid 

should be prominently displayed on institutions’ 

admission pages and on financial aid award 

letters, including the standardized Financial Aid 

Shopping Sheet for participating institutions, 

among other consumer warnings, to warn new 

students that they will not be eligible for financial 

aid at these low-performing colleges. 

To be absolutely clear, any revocation of studentbased aid eligibility should only be applicable to 

newly admitted students, not currently enrolled 

students.29 Students who are already enrolled 

should be permitted to conclude their studies. 

However, we do recommend the Department 

of Education provide those eligible for federal 

financial aid with strong consumer warnings 

informing them of the institution’s record of 

graduating students and/or leading them to 

default. (See “Restricting Choice?”)

CONCLUSION

Our public priority should be to increase 

the access and success of needy students to 

postsecondary education, not to protect the 

financial interests of institutions of higher 

education regardless of their quality or service 

to the nation. No longer should federal 

higher education money flow unabated and 

unquestioned to institutions that neglect their 

public duty to educate successfully the students 

they admit and to enroll low-income students at 

least at a bare-minimum level. 

We understand that the consequences we suggest 

for bottom performers that don’t improve are 

severe. But they are by no means out of line with 

the consequences for underserved students — the 

nearly 600,000 undergraduates attending the 

schools that fall below our minimum standards 

for success and the estimated 100,000 of them 

who will default on student loans. These students 

are at risk of facing both a lifetime of debt and no 

degree.

And let’s be clear: Establishing rigorous minimum 

performance benchmarks is particularly important 

at a time when federal dollars are, and will 

remain for the foreseeable future, scarce. In such a 

climate, serving students effectively, accountability 

for results, and efficiency of performance are of 

increased importance. 

This scarcity of resources is what led states to 

set goals, experiment with performance-based 

funding, and set minimum institutional success 

standards to access state financial aid.x It’s time 

for the federal government to do its part as well, 

instead of continuing to write $180 billion in 

checks to colleges every year and asking for 

virtually nothing in return.

x. The California Cal Grant program, for example, requires participating 

institutions to have a graduation rate that is at least 30 percent or a three-year

cohort default rate below 15.5 percent.
20 THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014

At Salish Kootenai College, a small, tribal school 

in Montana, about half of all incoming students 

start in at least one remedial (or non-creditbearing) course. Nearly one-quarter end up 

in three remedial courses: reading, math, and 

writing. Evidence indicates that students who are 

placed in remedial, or developmental education, 

courses are at a higher risk of dropping out, 

and those who don’t will often take longer to 

complete their degrees.1 A few years ago, students 

at Salish Kootenai were no different. In 2009, less 

than half of remedial students completed their 

courses; even fewer were successful once they got 

to gateway, or entry-level, 101 courses. 

So college administrators decided to look at the 

structures needed to support remedial students. 

What they found was disjointed efforts and 

departments that only complicated pathways for 

students. “There’s a tendency to think that the 

student is the problem,” says Stacey Sherwin, 

director of institutional effectiveness at Salish 

Kootenai. “We found that a lot of times, it was the 

institution that was the problem.” 

Salish Kootenai is in Pablo, Mont., a town 

surrounded by national forests in the northwest 

corner of the state. The college sits on the Flathead 

Indian Reservation and prides itself on catering 

to the specific needs of Native students. More 

than three-quarters of students are Native, almost 

9 in 10 freshmen receive Pell Grants, and more 

than half of the student population is 25 years or 

older.2 For these reasons and based on averages at 

other institutions with comparable populations, 

using a predicted vs. actual regression 

methodology, The Education Trust predicted 

Salish Kootenai to graduate only 10 percent of its 

students. But the college’s actual graduation rate is 

more than four times that — 43 percent — thanks 

to deliberate efforts to streamline processes and 

strengthen supports for students, many of whom 

are first-generation or lack academic preparation 

for college-level work.

Improvements have included revamped 

assessments that better place students into 

appropriate courses, more meaningful advising 

procedures that doubly ensure students’ 

coursework matches their abilities and academic 

goals, and a new department to oversee — and 

coordinate — all of it. This prevents mishaps like 

simultaneously enrolling students in remedial 

reading and a scientific literature course. Scenarios 

like these weren’t an entirely uncommon 

occurrence, said Stephen McCoy, director of 

academic success. According to the college’s 

internal assessment in 2009, about 20 percent of 

remedial students were simultaneously enrolled 

in courses in which they were unlikely to succeed. 

The new advising structure, however, now gives 

students a remediation-focused adviser, who 

ensures student course schedules make sense. 

These new efforts came at a cost, but officials 

found financial support through external grants. A 

$100,000 Wal-Mart grant helped establish the new 

department of academic success, which became 

a go-to hub for remedial students and their 

advisers, and a $400,000 grant from the Lumina 

Foundation helped administrators collect data to 

better identify the obstacles students faced on the 

IT CAN BE DONE

SALISH KOOTENAI COLLEGE

By Mandy Zatynski

Photo courtesy of Salish Kootenai
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 21

way to graduation. “Often what manifests itself 

as an academic problem,” said McCoy, “is rooted 

in what research calls a ‘non-cognitive factor’ or a 

‘soft skills factor.’” 

Take, for example, a student who struggles with 

math. Does that student have the self-efficacy 

and the study skills necessary to succeed in that 

class? In many cases, McCoy said, they found that 

students don’t. To address this, faculty attended 

professional development sessions that taught 

them how to work with low-skill, adult learners 

and help them be successful, not just in their 

class specifically, but as a student generally. Now, 

the engineering department dedicates more 

time toward helping students understand the 

vocabulary central to the coursework. Students 

learn the roots of words and draw their meanings 

on note cards, a technique pitched in one of 

the professional development sessions. That 

foundation allows students to grasp complex 

topics more easily later on, McCoy says. 

Remedial completion rates now reach as high 

as 80 percent. “Everybody talks about breaking 

down silos between academics and student 

support services,” says Sherwin, “but we actually 

did it.” And administrators have taken note: Once 

they saw the successes with remedial students, 

they turned their attention toward students 

who receive financial aid, but are on academic 

suspension, which puts that critical money at risk. 

For these students, the college now offers an 

“academic improvement waiver.” It’s funded 

through federal money the college receives for its 

Native population, and it pays for the student’s 

full-time tuition for one quarter while they work 

to re-instate themselves. In exchange, students 

must take an Academic Success 101 course, 

which instills a lot of the soft skills that McCoy 

references, including everything from identity 

and motivation to note-taking and study habits. 

Students must also take a personal employment 

class, which gauges their interests and strengths 

to ensure they have chosen a career where they’ll 

find success. Finally, students must take a series 

of Friday seminars, which build on the topics 

covered in Academic Success 101. Perhaps most 

important, the college requires students with 

these waivers to take one core class as well, all in 

the grand plan to ensure they stay on track toward 

graduation. Since the waivers were introduced two 

years ago, almost three-quarters of students have 

been reinstated for the next quarter. Although 

McCoy acknowledges that doesn’t mean they stay 

out of academic trouble, he adds, “They would 

have been done and gone if they hadn’t been 

here.”

________

1 Complete College America. Time is the Enemy: Sept. 2011.

2 College Results Online, www.collegeresults.org

Photo courtesy of Salish Kootenai
22 THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014

Franklin & Marshall College is a small but prestigious 

liberal arts school in Pennsylvania. Like many such 

institutions, few in its student body of 2,400 come 

from low-income families. But in the past few years, 

that has started to change. In fall 2008, only 5 

percent of all F&M students received a Pell Grant, one 

of the lowest percentages in the country. Just three 

years later, however, it was 17 percent. Why the shift, 

and how did they do it?

It started with the college’s board of trustees agreeing 

that the reflected imbalance in diversity didn't align 

with the college’s mission. Trustees also concluded 

that it wasn’t good for students’ educational 

experience. But the board knew it would cost them 

precious resources to radically increase the amount of 

need-based aid necessary to attract more low-income 

students and students of color without reducing aid 

to current students. And they knew it would take a 

strong leader to transition the campus community to 

serving a broader population.

So, beginning in early 2008, the board started to 

redirect more money toward financial aid, mostly by 

reducing planned budget surpluses. By the summer, 

they approved a plan to gradually phase out nonneed-based aid in favor of boosting the pot of funds 

for need-based aid. By the time they launched a 

search for a new president in 2010, they looked for a 

leader who would promote access and continue what 

they had started. What the board did with money — 

increasing the financial aid budget from $5.8 million 

to $11.3 million over five years — the new president, 

Dan Porterfield, augmented with programming. 

At the core of the new programming in support of 

economic diversity was relationship-building. F&M 

worked to identify K-12 schools and networks, like 

KIPP, that predominantly serve talented low-income 

students and build partnerships that 

introduce enrolled teens to college 

life and expectations. The college 

created F&M College Prep, now 

in its fourth year, to bring highachieving, first-generation students 

to campus the summer before their 

senior year of high school. Students 

must have a 3.3 GPA or rank in the 

top 5 percent of their class, and they 

must demonstrate some leadership 

experience at their school. For three 

weeks, participants live on campus, 

take two courses with F&M faculty 

(from environmental science to creative writing), 

and participate in other activities, like seminars on 

financial aid, that aim to acclimate students to the 

college-going lifestyle. F&M also pays a $500 stipend 

to each student who completes the program in an 

attempt to make up any summer earning potential 

they lost. The goal, in the end, is that these students 

apply to their dream schools — even if that doesn’t 

mean F&M. Thus far, all 156 students who have 

participated in F&M College Prep have been accepted 

into college, including such selective institutions 

as the University of Texas at Austin, University of 

California–Berkeley, Brown University, and Harvard 

University. More than 90 percent of students actually 

go — and more than a quarter of them go to F&M.

F&M also works with the National College Advising 

Corps to provide college counseling to 15 rural 

schools in Pennsylvania. In addition, for a decade, 

IT CAN BE DONE

FRANKLIN & MARSHALL COLLEGE

By Mandy Zatynski

Photo courtesy of Franklin & Marshall College
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 23

it has maintained a relationship 

with the Posse Foundation, which 

promotes college access and youth 

leadership development, offering 

full-tuition scholarships to 10 

high-achieving students of color 

from New York City and most 

recently, Miami. In particular, F&M 

targets prospective students with 

interests in STEM-related careers, 

in part because of its strong math 

and science offerings, but also 

because leaders know those careers 

are in demand. 

Porterfield says other schools 

can do the same, identify their 

own programmatic strengths 

and then form partnerships with 

like-minded networks that will 

attract not only students in those 

programs, but also those students’ 

communities. “The big advantage 

of the Posse relationship is that 

you not only identify students 

who are a great fit for your school, 

but you develop some inroads 

into those students’ high school 

communities, which can open 

pipelines beyond what the formal 

Posse pipeline brings,” he says.

Additionally, F&M works to keep 

introductory class sizes small, 

encouraging more faculty-student 

engagement and letting more 

students know of the resources 

and help available to them. Other 

efforts focus on drawing the 

connection between school and 

work, like a new pilot program 

this year that identifies work and 

internships in the community 

that align with students’ career 

interests. Upperclassmen pursue 

these opportunities as part 

of their work-study program, 

collecting a stipend from the 

university while also doing 

work that matters to them. F&M 

added a new leadership position 

to its general operating budget, 

the senior associate dean for 

planning and student outcomes, 

who is charged with assessing 

all of its programming, whether 

it’s working, and how it can be 

improved. 

There’s no regression analysis, but 

through these and other supports 

at F&M, the retention of its Pell 

students is actually higher than the 

freshman class and first-generation 

students. Comparatively, 92 

percent of the freshman class as a 

whole returned, and 96 percent of 

first-generation students did.

F&M leaders say much of this 

couldn’t have been accomplished 

without the significant 

commitment to need-based 

financial aid made back in 2008. 

Thanks to the additional grants, 

F&M has attracted more than 

triple the number of Pell Grant 

recipients it did then. The college 

now meets the full demonstrated 

need of every student who enrolls. 

(To pay for this, college leaders 

reduced their annual surplus 

and now project expenses more 

precisely.) They’ve also phased 

out almost all non-need-based 

aid with the exception of a few 

endowed scholarships for the arts. 

“We’ve achieved more goals than 

just increasing Pell [Grant-eligible] 

students by increasing financial 

aid,” Porterfield says. “We’re trying 

to attend to all students’ financial 

need.” 

This summer, the college 

plans to launch a fundraising 

campaign prioritizing financial 

aid — something it hasn’t done 

before. Porterfield is cautious. 

He and other leaders know little 

about how this campaign will 

be received and whether donors 

will contribute with the same 

enthusiasm as they have in the 

past. But one thing is for certain: 

F&M more than tripled its Pell 

enrollment rate in just three years. 

Their efforts were aggressive, 

their goals — ambitious, but not 

impossible.

“This is do-able. Some of the gains 

we’ve made ... are achievable with 

thoughtful and intentional effort,” 

Porterfield says. “This is not a 

matter of moving mountains.”

Photo courtesy of Franklin & Marshall College
24 THE EDUCATION TRUST

| TOUGH LOVE | JUNE 2014

TABLE 1: COLLEGES IN THE BOTTOM 5% FOR NOT 

ENROLLING AT LEAST 17% PELL FRESHMEN 

ID 

Year

Y1 

Status

Name State Sector

Median 

SAT/ACT 

of Enrolled 

Students 

(2011)

% 

Pell 

(2011)

% Pell 

(2012)

Auburn University AL Public 1225 14% 13%

California Institute of 

Technology CA Nonprofit 1525 9% 11%

California Polytechnic State 

University CA Public 1205 14% 14%

Claremont McKenna College CA Nonprofit 1390 15% 10%

Harvey Mudd College CA Nonprofit 1485 12% 13%

Pitzer College CA Nonprofit 1270 14% 10%

Pomona College CA Nonprofit 1470 15% 16%

University of San Diego CA Nonprofit 1210 16% 15%

Santa Clara University CA Nonprofit 1230 16% 13%

Scripps College CA Nonprofit 1360 15% 11%

Stanford University CA Nonprofit 1455 16% 16%

West Coast University-Los 

Angeles CA For-Profit N/A 15% 45%

University of Colorado-Boulder CO Public 1165 16% 17%

Colorado College CO Nonprofit 1315 12% 10%

Colorado Heights University CO Nonprofit N/A 4% N/A*

Connecticut College CT Nonprofit N/A 13% 16%

Quinnipiac University CT Nonprofit 1090 16% 14%

Trinity College CT Nonprofit 1285 13% 10%

Wesleyan University CT Nonprofit 1395 16% 21%

Yale University CT Nonprofit 1490 13% 12%

American University DC Nonprofit 1280 15% 24%

Catholic University of America DC Nonprofit 1110 12% 12%

George Washington University DC Nonprofit 1290 13% 12%

Georgetown University DC Nonprofit 1400 14% 16%

University of Delaware DE Public 1185 13% 12%

Beacon College FL Nonprofit N/A 10% 24%

Embry Riddle Aeronautical 

University-Worldwide FL Nonprofit N/A 13% 28%

University of Chicago IL Nonprofit 1480 15% 11%

Northwestern University IL Nonprofit 1445 15% 14%

University of Notre Dame IN Nonprofit 1450 12% 12%

Centre College KY Nonprofit 1280 16% 17%

Tulane University LA Nonprofit 1315 13% 11%

Bentley University MA Nonprofit 1210 16% 14%

Boston College MA Nonprofit 1340 16% 12%

Emerson College MA Nonprofit 1240 14% 19%

Northeastern University MA Nonprofit 1310 13% 13%

Stonehill College MA Nonprofit N/A 14% 12%

Tufts University MA Nonprofit 1425 10% 11%

Worcester Polytechnic 

Institute MA Nonprofit N/A 15% 15%

Franklin W. Olin College of 

Engineering MA Nonprofit 1455 14% 10%

Johns Hopkins University MD Nonprofit 1395 12% 13%

Loyola University-Baltimore MD Nonprofit 1198 14% 14%

University of MarylandCollege Park MD Public 1290 15% 15%

Ner Israel Rabbinical College MD Nonprofit N/A 15% 22%

St Mary's College of Maryland MD Public 1235 14% 19%

Bates College ME Nonprofit N/A 13% 12%

Colby College ME Nonprofit 1335 10% 11%

University of Michigan-Ann 

Arbor MI Public 1300 15% 16%

Carleton College MN Nonprofit 1400 13% 14%

Washington University in St 

Louis MO Nonprofit 1470 6% 6%

Davidson College NC Nonprofit 1345 13% 12%

Duke University NC Nonprofit 1435 13% 14%

Elon University NC Nonprofit 1215 10% 11%

High Point University NC Nonprofit 1075 12% 14%

Wake Forest University NC Nonprofit N/A 14% 14%

Dartmouth College NH Nonprofit 1450 13% 13%

Princeton University NJ Nonprofit 1490 11% 12%

Colgate University NY Nonprofit 1365 11% 11%

Cooper Union for the 

Advancement of Science 

and Art

NY Nonprofit 1365 13% 19%

Cornell University NY Nonprofit 1400 15% 17%

Jewish Theological Seminary 

of America NY Nonprofit 1350 0% 0%

The Juilliard School NY Nonprofit N/A 11% 25%

Marist College NY Nonprofit 1160 15% 15%

Rabbinical Seminary of 

America NY Nonprofit N/A 11% 18%

Torah Temimah Talmudical 

Seminary NY Nonprofit N/A 16% 18%

Kenyon College OH Nonprofit 1340 10% 7%

Oberlin College OH Nonprofit 1365 10% 9%

Bucknell University PA Nonprofit 1300 11% 9%

Carnegie Mellon University PA Nonprofit 1400 13% 15%

Dickinson College PA Nonprofit 1284 12% 10%

Franklin and Marshall College PA Nonprofit N/A 13% 17%

Gettysburg College PA Nonprofit 1300 13% 12%

Haverford College PA Nonprofit 1395 16% 14%

Lafayette College PA Nonprofit 1275 8% 13%

Lehigh University PA Nonprofit 1305 16% 14%

Muhlenberg College PA Nonprofit 1240 8% 9%

Pennsylvania State UniversityMain PA Public 1195 16% 15%

University of Pennsylvania PA Nonprofit 1440 16% 17%

University of Pittsburgh PA Public 1260 16% 16%
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 25

Saint Joseph's University PA Nonprofit 1120 12% 10%

Swarthmore College PA Nonprofit 1435 14% 17%

Villanova University PA Nonprofit 1300 11% 13%

Bryant University RI Nonprofit 1140 14% 17%

Providence College RI Nonprofit 1160 16% 16%

Roger Williams University RI Nonprofit 1075 14% 14%

Furman University SC Nonprofit 1275 16% 12%

Rhodes College TN Nonprofit 1260 16% 19%

Sewanee-The University of 

the South TN Nonprofit 1260 16% 19%

Vanderbilt University TN Nonprofit 1430 13% 14%

Rice University TX Nonprofit 1440 16% 17%

Southern Methodist University TX Nonprofit 1245 15% 15%

Texas Christian University TX Nonprofit 1165 14% 11%

Brigham Young UniversityProvo UT Nonprofit 1260 16% 18%

College of William and Mary VA Public 1350 10% 9%

Christopher Newport 

University VA Public 1200 16% 18%

James Madison University VA Public 1145 14% 14%

University of Richmond VA Nonprofit 1280 14% 15%

Strayer University-Virginia VA For-Profit N/A 16% 8%

Virginia Tech VA Public 1220 15% 15%

University of Virginia VA Public 1335 13% 12%

Virginia Military Institute VA Public 1135 16% 16%

Washington and Lee 

University VA Nonprofit 1385 11% 11%

Middlebury College VT Nonprofit 1385 10% 10%

Gonzaga University WA Nonprofit 1185 16% 19%

Whitman College WA Nonprofit 1325 14% 10%

Bellin College WI Nonprofit 1125 0% N/A*

University of WisconsinMadison WI Public 1260 15% 16%

Notes: Colleges must have at least 30 full-time freshmen in the 2010-2011 school year to 

be identified as falling in the bottom 5 percent of Pell freshman enrollment rates. Y1 status 

shows how these institutions are performing one year later but should be interpreted with 

caution: To allow for natural data fluctuations, our proposal stipulates that colleges will only 

be considered successful if their three-year weighted average, after the identification year, 

surpasses the 17 percent Pell benchmark. Colleges marked "N/A*" had a cohort size fewer 

than 30 full-time freshmen in the subsequent year. Their Pell rates, however, will still be 

used in calculating a three-year weighted average to determine whether they surpass the 17 

percent Pell benchmark after three years.

Source: 2011 and 2012 Integrated Postsecondary Education Data System (IPEDS) Pell data.
26 THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014

TABLE 2A: COLLEGES IN THE BOTTOM 5% FOR FAILING TO 

GRADUATE AT LEAST 15% OF ALL FRESHMEN 

ID Year Y1 

Status

Name State Sector

Overall 

Grad 

Rate 

(2011)

Overall 

Grad 

Rate 

(2012)

Concordia College-Selma AL Nonprofit, HBCU 3.4% 5.5%

ITT Technical Institute-Bessemer AL For-Profit 9.3% 14%

Arkansas Baptist College AR Nonprofit, HBCU 4.2% 4.8%

University of Phoenix-Little Rock AR For-Profit 9.7% 15.3%

University of Phoenix-Northwest 

Arkansas AR For-Profit 7.9% 20.3%

Western International University AZ For-Profit 2.4% 2.6%

University of Phoenix-Online AZ For-Profit 6.2% 4.3%

Yeshiva Ohr Elchonon Chabad CA Nonprofit 14.6% 36.4%

University of Phoenix-San Diego CA For-Profit 12.4% 14.4%

University of Phoenix-Sacramento 

Valley CA For-Profit 10.7% 16.2%

Colorado Technical UniversityColorado CO For-Profit 8.5% 19%

Colorado Technical UniversityGreenwood CO For-Profit 7% N/A*

Colorado Technical University-Online CO For-Profit 9.4% 9.5%

University of the District of Columbia DC Public, HBCU 8% 15.8%

Carlos Albizu University-Miami FL Nonprofit, HSI 8.8% N/A*

Hodges University FL Nonprofit, HSI 12.5% N/A*

University of Phoenix-North Florida FL For-Profit 14.8% 18.8%

Thomas University GA Nonprofit 7.5% 14.3%

Truett-McConnell College GA Nonprofit 13.6% 9.4%

University of Phoenix-Atlanta GA For-Profit 14.1% 13.5%

University of Phoenix-Columbus GA For-Profit 10.1% 15.6%

University of Phoenix-Hawaii HI For-Profit 13.3% 26.7%

University of Phoenix-Des Moines IA For-Profit 10% N/A*

University of Phoenix-Idaho ID For-Profit 9.1% 8.8%

East-West University IL Nonprofit 7.7% 8.7%

Hebrew Theological College IL Nonprofit 5.7% 8.8%

Holy Cross College IN Nonprofit 12.7% 19.9%

ITT Technical Institute-Fort Wayne IN For-Profit 9.1% N/A*

ITT Technical Institute-Indianapolis IN For-Profit 8.3% 10.5%

University of Phoenix-Indianapolis IN For-Profit 5.3% 14.1%

University of Phoenix-Wichita KS For-Profit 12.8% 1.5%

ITT Technical Institute-Louisville KY For-Profit 14.7% 18.2%

University of Phoenix-Louisville KY For-Profit 4.9% N/A*

Louisiana State University-Alexandria LA Public 12.1% 13.5%

University of Phoenix-Louisiana LA For-Profit 13.6% 17.9%

Boston Architectural College MA Nonprofit 9.1% 6.8%

Coppin State University MD Public, HBCU 14.7% 17%

University of Maryland-University 

College MD Public 10.3% 4.3%

Baker College of Owosso MI Nonprofit 13% 11.1%

University of Phoenix-Metro Detroit MI For-Profit 11.4% 10.5%

University of Phoenix-West Michigan MI For-Profit 7.1% 14.4%

University of Phoenix-Minneapolis/

St Paul MN For-Profit 6.8% 12.9%

ITT Technical Institute-Earth City MO For-Profit 10.7% 11.1%

Harris-Stowe State University MO Public, HBCU 8.5% 8.2%

University of Phoenix-St Louis MO For-Profit 7.6% 10.2%

University of Phoenix-Kansas City MO For-Profit 12.9% 13.3%

University of Phoenix-Springfield MO For-Profit 10.9% 9.7%

University of Phoenix-Charlotte NC For-Profit 9.9% 16.3%

University of Phoenix-Raleigh NC For-Profit 6.8% 12.1%

Turtle Mountain Community College ND Nonprofit, Tribal 0.7% N/A*

Rabbinical College of America NJ Nonprofit 12.1% N/A*

Yeshiva Toras Chaim NJ Nonprofit 2.9% 2.2%

Western New Mexico University NM Public, HSI 12.5% 16.2%

Great Basin College NV Public 7.7% 14.3%

ITT Technical Institute-Henderson NV For-Profit 11.9% N/A*

International Academy of Design and 

Technology-Henderson NV For-Profit 11.9% 36.4%

Mirrer Yeshiva Cent Institute NY Nonprofit 6.1% 15.4%

Rabbinical College of Long Island NY Nonprofit 3% 2.6%

Talmudical Seminary Oholei Torah NY Nonprofit 2.2% 3.5%

Torah Temimah Talmudical Seminary NY Nonprofit 5% 2.6%

Yeshivat Mikdash Melech NY Nonprofit 2.7% N/A*

Yeshiva of the Telshe Alumni NY Nonprofit 2.6% N/A*

DeVry College of New York NY For-Profit 14.4% 24.5%

Chancellor University OH For-Profit 4.8% 4.6%

University of Phoenix-Cincinnati OH For-Profit 8.8% 3.2%

Bacone College OK Nonprofit 4.2% 9.5%

Oklahoma State University Institute of 

Technology-Okmulgee OK Public 1.1% missing

University of Phoenix-Oklahoma City OK For-Profit 13.9% 11.9%

University of Phoenix-Tulsa OK For-Profit 13.4% 13.8%

University of Phoenix-Philadelphia PA For-Profit 10.7% 9%

University of Phoenix-Pittsburgh PA For-Profit 5.9% N/A*

Harrisburg University of Science and 

Technology PA Nonprofit 9.1% N/A*

National University College-Bayamon PR For-Profit 9.3% 5.5%

National University College-Arecibo PR For-Profit 14.3% 12.2%

University of Puerto Rico-Utuado PR Public, HSI 12.1% 20.8%

Universidad Del Este PR Nonprofit, HSI 12.5% 22.5%

EDP College of Puerto Rico Inc-San 

Juan PR Nonprofit, HSI 10.9% 25%

Caribbean University-Vega Baja PR Nonprofit, HSI 12.8% 29.4%

Oglala Lakota College SD Public, Tribal 4.5% 1.3%

Sinte Gleska University SD Nonprofit, Tribal 4.7% N/A*

ITT Technical Institute-Nashville TN For-Profit 13.8% 12.5%

LeMoyne-Owen College TN Nonprofit, HBCU 14.9% 8.1%

Victory University TN For-Profit 10.3% 13.2%
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 27

ITT Technical Institute-Knoxville TN For-Profit 11.8% 9.5%

ITT Technical Institute-Cordova TN For-Profit 13.8% 16.7%

University of Phoenix-Nashville TN For-Profit 14.1% 9.6%

University of Houston-Downtown TX Public, HSI 14.7% 11.9%

Jarvis Christian College TX Nonprofit, HBCU 14.3% 13.3%

Paul Quinn College TX Nonprofit, HBCU 5.4% 0.6%

Texas College TX Nonprofit, HBCU 6.4% 17.1%

Texas Southern University TX Public, HBCU 11.8% 12%

University of Phoenix-Dallas TX For-Profit 7.1% 15.7%

Baptist University of the Americas TX Nonprofit, HSI 10.3% N/A*

American InterContinental UniversityHouston TX For-Profit 13.8% 24.4%

University of Phoenix-Austin TX For-Profit 12.2% 12.5%

Stevens-Henager College of BusinessProvo UT For-Profit 4.9% 41.5%

ITT Technical Institute-Norfolk VA For-Profit 10% 2%

University of Phoenix-Northern 

Virginia VA For-Profit 8.5% N/A*

University of Phoenix-Richmond VA For-Profit 3.4% 3.9%

Heritage University WA Nonprofit, HSI 12.3% 16%

University of Phoenix-Western 

Washington WA For-Profit 14.5% 14.7%

ITT Technical Institute-Greenfield WI For-Profit 14.3% 5.4%

University of Phoenix-Milwaukee WI For-Profit 9.6% 6.8%

Mountain State University WV Nonprofit 11.6% missing

Salem International University WV For-Profit 13.6% 11.3%

Notes: Colleges must have at least 30 full-time freshmen in the 2005 fall cohort to be 

identified as falling in the bottom 5 percent of 2011 graduation rates. Y1 status shows how 

these institutions are performing one year later but should be interpreted with caution: 

To allow for natural data fluctuations, our proposal stipulates that colleges will only be 

considered successful if their four-year weighted average, after the identification year, 

surpasses the 15 percent graduation rate benchmark. 

Colleges marked "N/A*" had a cohort size fewer than 30 full-time freshmen in the subsequent 

year. Their graduation rates, however, will still be used in calculating a four-year weighted 

average to determine whether they surpass the 15 percent graduation rate benchmark after 

four years.

Source: 2011 and 2012 Integrated Postsecondary Education Data System (IPEDS) Graduation 

Rate data.
28 THE EDUCATION TRUST

| TOUGH LOVE | JUNE 2014

TABLE 2B: COLLEGES IN THE BOTTOM 5% FOR NOT 

GRADUATING AT LEAST 15% OF ANY SUBGROUP 

ID Year

Name State Sector

Overall 

Grad Rate 

(2011)

Subgroup Grad Rate (2011)

University of North 

Alabama AL Public 27.4% 11.9% (Black)

Talladega College AL Nonprofit, 

HBCU 20% 14.2% (Black)

University of 

Alaska-Anchorage AK Public 25.3% 11.8% (Hispanic)9.1% (Am. Indian)

University of 

Phoenix-PhoenixHohokam AZ For-Profit 16.7% 13.9% (Hispanic)

University of 

Arkansas at Little 

Rock

AR Public 21.2% 13.6% (Black)

University of 

Arkansas at 

Monticello

AR Public 23.2% 10.9% (Black)

Academy of Art 

University CA For-Profit 34.5% 14.3% (Hispanic)

Westwood 

College-Los 

Angeles

CA For-Profit 15.4% 8.2% (White)

Metropolitan State 

College of Denver CO Public 21.4% 13.7% (Hispanic)

Gallaudet 

University DC Nonprofit 41.4% 14.3% (Black)

Augusta State 

University GA Public 22.3% 13.3% (Black)

International 

Academy of 

Design and 

TechnologyChicago

IL For-Profit 18.1% 12.7% (Black)

Northeastern 

Illinois University IL Public, HSI 23.1% 8.6% (Black)

Indiana UniversityPurdue UniversityFort Wayne

IN Public 25.6% 11.9% (Black)

13.0% (Hispanic)

University of 

Southern Indiana IN Public 34.3% 10.5% (Black)

Indiana UniversitySouth Bend IN Public 22.2% 6.5% (Black)

Indiana UniversityNorthwest IN Public 23.1% 11.3% (Black)

Purdue UniversityCalumet IN Public 27.7% 14.1% (Black)

Iowa Wesleyan 

College IA Nonprofit 25.2% 12.1% (Black)

Kentucky State 

University KY Public, HBCU 21.4% 14.3% (White)

Louisiana College LA Nonprofit 31.1% 13.3% (Black)

University of New 

Orleans LA Public 38.1% 12.1% (Black)

Baker College of 

Flint MI Nonprofit 16.7% 3% (Black)

Lake Superior 

State University MI Public 35.3% 13.3% (Am. Indian)

Lawrence 

Technological 

University

MI Nonprofit 43.9% 11.1% (Black)

Wayne State 

University MI Public 26.4% 7.5% (Black)

Missouri Baptist 

University MO Nonprofit 27.8% 14.3% (Black)

Missouri Western 

State University MO Public 27% 9.3% (Black)

Eastern New 

Mexico University NM Public, HSI 23.9% 8.7% (Black)

New Mexico 

Highlands 

University

NM Public, HSI 20.9% 12.1% (White)

CUNY York College NY Public 19.8% 14.4% (Hispanic)

12.8% (White)

SUNY Empire 

State College NY Public 18.7% 9.3% (Black)

Methodist 

University NC Nonprofit 38.6% 14.5% (Black)

University of Akron OH Public 38% 9.8% (Black)

Cleveland State 

University OH Public 29.9% 13.1% (Black)13.0 (Hispanic)

DeVry UniversityOhio OH For-Profit 32.9% 12.2% (Black)

Kent State 

University-Stark OH Public 23.5% 6.5% (Black)

Ohio UniversityChillicothe OH Public 15.1% 14.7% (White)

Youngstown State 

University OH Public 35.2% 12.5% (Black)

Cameron 

University OK Public 19% 7.9% (Am. Indian)

Southwestern 

Oklahoma State 

University

OK Public 32.9% 5.7% (Hispanic)

DeVry UniversityTexas TX For-Profit 18.8% 13.2% (White)

The University of 

Texas-Brownsville TX Public, HSI 17.4% 8.1% (White)

Wayland Baptist 

University TX Nonprofit 37.4% 14.6% (Hispanic)

The University of 

Virginia's CollegeWiseVA Public 38.8% 6.5% (Black)

Concord University WV Public 33.5% 14.3% (Black)

University of 

WisconsinParksideWI Public 27.7% 14.3% (Black)

University of 

Phoenix-Bay Area CA For-Profit 18.6% 6.3% (Black)
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 29

University of 

Phoenix-Southern 

California

CA For-Profit 15% 12% (Black)

Western 

Governors 

University

UT Nonprofit 18.4% 7.2% (Black)

13.2% (Hispanic)

University of 

Phoenix-South 

Florida 

FL For-Profit 20.4% 14.9% (Hispanic)

University of 

Phoenix-Houston TX For-Profit 16.1% 13.9% (White)

Westwood 

College-Chicago 

Loop

IL For-Profit 17.9% 10% (Black)

University of 

Phoenix-Memphis TN For-Profit 15.4% 14.5% (Black)

Notes: Colleges must have at least 30 full-time freshmen in any of the five major 

subgroups (black, Hispanic, American Indian, white, Asian) in the 2005 cohort to be 

identified as falling below the bottom 5 percent 2011 overall graduation rate standard.

Source: 2011 Integrated Postsecondary Education Data System (IPEDS) Graduation Rate 

data.
30 THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014

TABLE 3: COLLEGES IN THE BOTTOM 5% FOR HAVING 

MORE THAN 28% OF STUDENTS DEFAULT ON 

STUDENT LOANS

ID Year

Name State Sector

3-Year 

Cohort 

Default 

Rates 

(FY2010)

Concordia College-Selma AL Nonprofit, 

HBCU

33.0%

Talladega College AL Nonprofit, 

HBCU

36.7%

ITT Technical Institute-Bessemer AL For-Profit 29.2%

Virginia College-Birmingham AL For-Profit 28.2%

Virginia College-Huntsville AL For-Profit 28.2%

Arkansas Baptist College AR Nonprofit, 

HBCU

33.6%

University of Arkansas at Pine Bluff AR Public, HBCU 29.2%

ITT Technical Institute-Little Rock AR For-Profit 29.2%

ITT Technical Institute-Tucson AZ For-Profit 29.2%

ITT Technical Institute-Tempe AZ For-Profit 29.2%

Le Cordon Bleu College of Culinary Arts AZ For-Profit 28.5%

ITT Technical Institute-Rancho Cordova CA For-Profit 29.2%

California College-San Diego CA For-Profit 29.3%

ITT Technical Institute-San Diego CA For-Profit 29.2%

ITT Technical Institute-San Dimas CA For-Profit 29.2%

ITT Technical Institute-Orange CA For-Profit 29.2%

ITT Technical Institute-Sylmar CA For-Profit 29.2%

ITT Technical Institute-Torrance CA For-Profit 29.2%

ITT Technical Institute-San Bernardino CA For-Profit 29.2%

ITT Technical Institute-Oxnard CA For-Profit 29.2%

ITT Technical Institute-Lathrop CA For-Profit 29.2%

College America-Denver CO For-Profit 35.1%

ITT Technical Institute-Thornton CO For-Profit 29.2%

College America-Colorado Springs CO For-Profit 35.1%

College America-Fort Collins CO For-Profit 35.1%

Potomac College-Washington DC For-Profit 32.8%

ITT Technical Institute-Tampa FL For-Profit 29.2%

Lincoln College of Technology-West Palm FL For-Profit 31.3%

ITT Technical Institute-Lake Mary FL For-Profit 29.2%

ITT Technical Institute-Jacksonville FL For-Profit 29.2%

ITT Technical Institute-Fort Lauderdale FL For-Profit 29.2%

ITT Technical Institute-Miami FL For-Profit 29.2%

Bauder College GA For-Profit 29.0%

ITT Technical Institute-Duluth GA For-Profit 29.2%

ITT Technical Institute-Kennesaw GA For-Profit 29.2%

ITT Technical Institute-Boise ID For-Profit 29.2%

East-West University IL Nonprofit 30.5%

ITT Technical Institute-Mount Prospect IL For-Profit 29.2%

ITT Technical Institute-Orland Park IL For-Profit 29.2%

ITT Technical Institute-Fort Wayne IN For-Profit 29.2%

ITT Technical Institute-Indianapolis IN For-Profit 29.2%

ITT Technical Institute-Newburgh IN For-Profit 29.2%

ITT Technical Institute-Louisville KY For-Profit 29.2%

ITT Technical Institute-Saint Rose LA For-Profit 29.2%

Pine Manor College MA Nonprofit 31.5%

ITT Technical Institute-Eden Prairie MN For-Profit 29.2%

ITT Technical Institute-Earth City MO For-Profit 29.2%

Missouri Tech MO For-Profit 39.1%

ITT Technical Institute-Arnold MO For-Profit 29.2%

ITT Technical Institute-Kansas City MO For-Profit 29.2%

Rust College MS Nonprofit, 

HBCU

32.0%

South College-Asheville NC For-Profit 31.7%

Heritage Bible College NC Nonprofit 29.4%

Livingstone College NC Nonprofit, 

HBCU

32.4%

Saint Augustine's University NC Nonprofit, 

HBCU

30.6%

ITT Technical Institute-Omaha NE For-Profit 29.2%

ITT Technical Institute-Albuquerque NM For-Profit 29.2%

ITT Technical Institute-Henderson NV For-Profit 29.2%

Globe Institute of Technology NY For-Profit 35.9%

Bryant & Stratton College-Parma OH For-Profit 30.3%

Central State University OH Public, HBCU 31.2%

Bryant & Stratton College-Cleveland OH For-Profit 30.3%

Bryant & Stratton College-Eastlake OH For-Profit 30.3%

Bacone College OK Nonprofit 32.0%

Langston University OK Public, HBCU 32.5%

Oklahoma State University Institute of 

Technology-Okmulgee

OK Public 30.5%

ITT Technical Institute-Portland OR For-Profit 29.2%

Cheyney University of Pennsylvania PA Public, HBCU 28.2%

American University of Puerto Rico PR Nonprofit, HSI 31.2%

Caribbean University-Bayamon PR Nonprofit, HSI 29.9%

Caribbean University-Carolina PR Nonprofit, HSI 29.9%

Pontifical Catholic University of Puerto 

Rico-Arecibo

PR Nonprofit, HSI 28.6%

Pontifical Catholic University of Puerto 

Rico-Ponce

PR Nonprofit, HSI 28.6%

Inter American University of Puerto RicoSan GermanPR Nonprofit, HSI 28.9%

Inter American University of Puerto RicoAguadillaPR Nonprofit, HSI 28.9%

Inter American University of Puerto 

Rico-Arecibo

PR Nonprofit, HSI 28.9%

Inter American University of Puerto RicoBarranquitasPR Nonprofit, HSI 28.9%

Inter American University of Puerto 

Rico-Metro

PR Nonprofit, HSI 28.9%

Inter American University of Puerto 

Rico-Ponce

PR Nonprofit, HSI 28.9%
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 31

Inter American University of Puerto 

Rico-Fajardo

PR Nonprofit, HSI 28.9%

Inter American University of Puerto RicoGuayamaPR Nonprofit, HSI 28.9%

Inter American University of Puerto 

Rico-Bayamon

PR Nonprofit, HSI 28.9%

Pontifical Catholic University of Puerto 

Rico-Mayaguez

PR Nonprofit, HSI 28.6%

Caribbean University-Ponce PR Nonprofit, HSI 29.9%

Caribbean University-Vega Baja PR Nonprofit, HSI 29.9%

Allen University SC Nonprofit, 

HBCU

35.3%

Benedict College SC Nonprofit, 

HBCU

32.9%

Morris College SC Nonprofit, 

HBCU

28.8%

ITT Technical Institute-Greenville SC For-Profit 29.2%

ITT Technical Institute-Nashville TN For-Profit 29.2%

ITT Technical Institute-Knoxville TN For-Profit 29.2%

ITT Technical Institute-Cordova TN For-Profit 29.2%

Jarvis Christian College TX Nonprofit, 

HBCU

50.6%

Southwestern Christian College TX Nonprofit, 

HBCU

32.7%

Texas College TX Nonprofit, 

HBCU

34.6%

ITT Technical Institute-Murray UT For-Profit 29.2%

Stevens-Henager College-Ogden UT For-Profit 34.1%

Stevens-Henager College of BusinessProvoUT For-Profit 34.1%

Stevens-Henager College-Murray UT For-Profit 34.1%

Stevens-Henager College-Logan UT For-Profit 34.1%

Bryant & Stratton College-Virginia Beach VA For-Profit 30.3%

Bryant & Stratton College-Richmond VA For-Profit 30.3%

Centura College-Virginia Beach VA For-Profit 32.0%

Sanford-Brown College-Vienna VA For-Profit 31.6%

ITT Technical Institute-Norfolk VA For-Profit 29.2%

ITT Technical Institute-Richmond VA For-Profit 29.2%

ITT Technical Institute-Springfield VA For-Profit 29.2%

ITT Technical Institute-Chantilly VA For-Profit 29.2%

Potomac College-Herndon VA For-Profit 32.8%

ITT Technical Institute-Greenfield WI For-Profit 29.2%

Bryant & Stratton College-Milwaukee WI For-Profit 30.3%

ITT Technical Institute-Green Bay WI For-Profit 29.2%

Bryant & Stratton College-Wauwatosa WI For-Profit 30.3%

Notes: Colleges must have at least 30 students in the 2010 cohort entering 

repayment to be considered falling in the bottom 5 percent of cohort default rates.

Source: FY2010 Default Data from Federal Student Aid, U.S. Department of 

Education.
32 THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014

ENDNOTES

1. Bhashkar Mazumder, “Upward Intergenerational Economic Mobility 

in the United States” (Washington, D.C.: Economic Mobility Project, 

Pew Charitable Trusts, 2008); Ron Haskins, Harry Holzer and Robert 

Lerman, “Promoting Economic Mobility by Increasing Postsecondary Education” (Washington, D.C.: Economic Mobility Project, Pew 

Charitable Trusts, 2009). According to the Economic Mobility Project 

at Pew Charitable Trusts, those who have finished four years of college 

see no racial gap in economic mobility: Both whites and blacks in this 

group experience very high rates of upward mobility. A follow-up report 

also found that poor children are four times more likely to become rich 

if they attain a four-year college degree than they are if they don’t earn a 

bachelor’s. 

2. Undergraduate enrollment trends from 1960 to 2012 can be found at: 

U.S. Department of Education, National Center for Education Statistics, 

“The Digest of Education Statistics 2013,” Tables 302.20 and 302.30 

(Washington D.C.: 2013). Postsecondary expectations of 12th-graders 

from 1981 to 2004 can be found at: U.S. Department of Education, 

National Center for Education Statistics, “The Condition of Education 

2006,” Indicator 23 (Washington, D.C.: 2006). 

3. Organisation for Economic Co-operation and Development, “Education at a Glance 2013,” Chart A4.2 (Paris: Organisation for Economic 

Co-operation and Development, 2013). 

4. Education Trust analysis of “Beginning Postsecondary Students Study 

(BPS), 2003-04” (Washington, D.C.: U.S. Department of Education, 

National Center for Education Statistics), http://nces.ed.gov/surveys/

bps/.

5. Donghoon Lee, “Household Debt and Credit: Student Debt” (New 

York: Federal Reserve Bank of New York, February 2013). According 

to the Federal Reserve Bank of New York, total student loan balances 

almost tripled between 2004 and 2012, with nearly one-third of borrowers in repayment delinquent on student debt. The higher burden of 

student loans and higher delinquencies may affect borrowers’ access to 

other types of credit (auto, credit, mortgage) and the performance of 

other debt. 

6. U.S. Department of Education, National Center for Education Statistics, “Enrollment in Postsecondary Institutions, Fall 2012; Financial 

Statistics, Fiscal Year 2012; and Graduation Rates, Selected Cohorts, 

2004-2009, First Look,” Table 3 (Washington, D.C.: U.S. Government 

Printing Office, December 2013); College Board, “Trends in Student Aid 

2013: Median Debt Levels of 2007-08 Bachelor’s Degree Recipients by 

Income Level,” Figure 2010_9 (New York: College Board, 2013); College 

Board, “Who Borrows Most? Bachelor’s Degree Recipients with High 

Levels of Student Debt,” Table 5 (New York: College Board, 2010). 

7. Organisation for Economic Co-operation and Development, “Education at a Glance 2013” (Paris: Organisation for Economic Co-operation 

and Development, 2013). 

8. Dennis P. Jones, “Outcomes-Based Funding: The Wave of Implementation” (Washington, D.C.: Complete College America and National 

Center for Higher Education Management Systems, October 2013). 

Currently, 33 states are part of the Complete College America Alliance of States. To become a member, a state’s governor, in partnership 

with its colleges and universities, pledges to make college completion 

a top priority and commits to: 1) establish annual state and campusspecific completion goals through 2020; 2) collect and report common 

measures of progress; and 3) develop action plans and move key policy 

levers. 

9. Joseph Yeado, Kati Haycock, Rob Johnstone, and Priyadarshini Chaplot, 

“Learning From High-Performing and Fast-Gaining Institutions” (Washington, D.C.: The Education Trust, January 2014). 

10. Mass Insight Education, “State Education Agencies — Creating Proof 

Points and Scaling Results” (Washington, D.C.: Mass Insight Education, 

June 2012); Strengthening America’s Schools Act of 2013 bill summary. 

For example, the State Fiscal Stabilization Fund within The American 

Recovery and Reinvestment Act of 2009, the School Improvement Grant, 

and 2009 Race to the Top required grantees to focus on the persistently 

low-achieving schools — the bottom 5 percent — as a condition to 

receive federal dollars. More recently, both the waiver application granting states flexibility from the Elementary and Secondary Education Act’s 

(ESEA) accountability provisions and the Senate ESEA reauthorization 

bill required states to identify and support “priority schools,” those 

that had been identified as the lowest achieving 5 percent of each Title I 

elementary and secondary schools in the state. 

11. Calculation includes first-time, returning, full-time, and part-time students attending the colleges that fall in the bottom 5 percent on graduation rates and student loan default rates. Student loan default rates were 

chosen as a proxy for those institutions that might underperform on a 

loan repayment metric, for which institution-level data is not available.

12.Education Trust analysis of Integrated Postsecondary Education Data 

System (IPEDS) and FY2010 three-year cohort default rate, 2011 (Washington, D.C.: U.S. Department of Education, National Center for Education Statistics), http://nces.ed.gov/ipeds/.

13.Education Trust analysis of Integrated Postsecondary Education Data 

System (IPEDS), Graduation rate data, 2011 (Washington, D.C.: U.S. 

Department of Education Statistics, National Center for Education 

Statistics), http://nces.ed.gov/ipeds/.

14.Education Trust analysis of Integrated Postsecondary Education Data 

System (IPEDS), Graduation rate, net price and average student loan 

data for 2010 freshman class, 2011 (Washington, D.C.: U.S. Department 

of Education Statistics, National Center for Education Statistics), http://

nces.ed.gov/ipeds/.

15.Mary Nguyen, “Degreeless in Debt: What Happens to Borrowers Who 

Drop Out” (Washington, D.C.: Education Sector, 2012). 

16.William G. Bowen, Matthew M. Chingos and Michael S. McPherson, 

Crossing the Finish Line: Completing College at America’s Public Universities 

(Princeton, New Jersey: Princeton University Press, 2009). According 

to Crossing the Finish Line, among highly qualified students eligible to 

attend a highly selective college, more than 40 percent “under match”: 

30 percent enroll at a less selective college, 1 percent enroll at an HBCU, 

3 percent enroll at a two-year college, and 9 percent do not go to college 

at all, according to National Student Clearinghouse data. 

17.Bowen et al., Crossing the Finish Line. 

18. Sandy Baum, Jennifer Ma, and Kathleen Payea, “Education Pays 2013: 

The Benefits of Higher Education for Individuals and Society,” Figure 

1.1: Median Earnings and Tax Payments of Full-Time Year-Round Workers Ages 25 and Older by Educational Level, 2011 (Washington D.C.: 

College Board, 2013). 

19.Education Trust, “The Access to Success Initiative Technical Appendix 

in Replenishing Opportunity in America: The 2012 Midterm Report of 

Public Higher Education Systems” (Washington, D.C.: Education Trust, 

2012). The Education Trust and its Access to Success Initiative have 

used Pell receipt as an indicator of income status because of its close 

reflection to the national proportion of first-time, full-time students 

who come from families with incomes below $50,000, the approximate 

income eligibility threshold for Pell Grants. Using the 2012 National 

Postsecondary Student Aid Survey, we find that the percentage of 

four-year, college-entering students with Pell Grants (42 percent) was 

the same as the percentage of students with incomes below $50,000 

— approximately 40 percent. It is also the only income measure that is 

widely available across institutions, systems, and states. 

20. Education Trust analysis of National Postsecondary Student Aid Study 

(NPSAS), 2011-12 (Washington, D.C.: U.S. Department of Education, 

National Center for Education Statistics), http://nces.ed.gov/surveys/

npsas/. Over 90 percent of Pell Grant recipients come from families 

with incomes of $50,000 or less, the bottom 40 percent of the national 

income distribution. In fact, many Pell recipients are extremely lowincome. One-quarter come from families with incomes of $6,000 or 

less. 

21. Education Trust analysis of ACT data, 2011-13 (Iowa City, Iowa: ACT, 

Inc.); Bowen et al., Crossing the Finish Line. 

22.U.S. Department of Education, National Center for Education Statistics, 

Integrated Postsecondary Education Data System (IPEDS), Endowment 

assets, 2011-12 (Washington, D.C.: U.S. Department of Education, National Center for Education Statistics). According to 2012 IPEDS data, 

U.Va.’s FY2012 endowment assets were valued at $4.7 billion, compared 
THE EDUCATION TRUST | TOUGH LOVE | JUNE 2014 33

with $2.2 billion at UNC-Chapel Hill and $62 million at Binghamton 

University. 

23.Bowen et al., Crossing the Finish Line. 

24.U.S. Department of Education, Office of Federal Student Aid, 2011 

“Gainful Employment Data,” https://studentaid.ed.gov/about/datacenter/school/ge/data. According to the 2011 Gainful Employment 

Informational Rates, repayment rates measure the percent of the GE 

program’s former students who are repaying their federal student loans, 

weighted by the original outstanding principal loan balances. Students 

would be considered repaying their loans if they reduced the principal 

balance by at least one dollar in the most recently completed fiscal year. 

25.Education Trust analysis of National Postsecondary Student Aid Study, 

2011-12 (Washington, D.C.: U.S. Department of Education, National 

Center for Education Statistics), http://nces.ed.gov/surveys/npsas/. 

National Postsecondary Student Aid Study 2011-12 indicates that 62 

percent of students who received federal student loans also received Pell 

Grants. 

26.Yeado et al., “Learning From High-Performing and Fast-Gaining Institutions.” 

27.Yeado et al., “Learning From High-Performing and Fast-Gaining Institutions.” 

28.Michael Dannenberg and Mamie Voight, “Doing Away With Debt: 

Using Existing Resources to Ensure College Affordability for Low and 

Middle-Income Families” (Washington, D.C.: The Education Trust, 

February 2013); Daniel J. Hurley, Thomas L. Harnisch, and Barmak Nassirian, “A Proposed Federal Matching Program to Stop the Privatization 

of Public Higher Education” (Washington, D.C.: American Association 

of State Colleges and Universities, January 2014); Elizabeth Baylor and 

David A. Bergeron, “Public College Quality Compact for Students and 

Taxpayers” (Washington, D.C.: Center for American Progress, 2014). 

President Barack Obama has repeatedly called for a shared responsibility between states and higher education institutions — working with the 

federal government — to promote access, affordability, and attainment 

in higher education. 

29.Regulations already permit an institution to use funds received under 

Pell, ACG, SMART, TEACH, a campus-based program, or direct loans, 

or to request additional funds from the secretary of education if the 

institution does not possess sufficient funds or if the commitment to 

the student was made before the end of the participation in the Title IV 

program. See 34 CFR 668.26. If an institution closes before all students 

have completed their programs, a teach-out plan must be submitted to 

the department that provides for the equitable treatment of students. 

The plan may also include a teach-out agreement between institutions. 

See 34 CFR 602.24(c).
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ABOUT THE EDUCATION TRUST

The Education Trust promotes high academic achievement for 

all students at all levels — pre-kindergarten through college. We 

work alongside parents, educators, and community and business 

leaders across the country in transforming schools and colleges into 

institutions that serve all students well. Lessons learned in these 

efforts, together with unflinching data analyses, shape our state and 

national policy agendas. Our goal is to close the gaps in opportunity 

and achievement that consign far too many young people — especially 

those who are black, Latino, American Indian, or from low-income 

families — to lives on the margins of the American mainstream.

ACKNOWLEDGEMENTS

The Education Trust is grateful to the Bill & Melinda Gates Foundation 

and Lumina Foundation for providing support for the development of 

this publication. The views expressed herein are those of the authors 

and do not necessarily represent those of the foundations, their 

officers, or employees.