Congress should empower universities in the fight against student debt

Recently the Department of Education unveiled its latest student cohort default rate calculations, and for the third year in a row, the University of Phoenix’s rate dropped. The progress is an exciting validation of our five-year transformation plan to become a more focused, more trusted, less complex and higher retaining institution.

The announcement this week shows that our three-year student cohort default rate dropped to 13.3 percent. For some perspective, our rate released in 2013 was 26 percent, meaning in a mere three years, our rate has dropped by almost half.

{mosads}This is the latest sign of our value, but it’s not the only one. The newly released data for the White House College Scorecard continues to show that both the University’s tuition and fees are below the national average among private universities with more than 15,000 students, and its median student earnings ten years after entry to the institution are over the national average among public and private universities with more than 15,000 students.

While I am pleased to see these positive signs, I believe there is more we can do to help students graduate in a strong financial position. In fact, I believe there is a stronger role for all universities to play in helping reduce student debt, however we currently have one hand tied behind our back. It’s time Congress passed legislation empowering universities to prevent students from excessively borrowing and taking on unnecessary burdens in student debt.

Our University works hard to make sure students understand the resources available and plan for the costs of their education. We have a sophisticated, interactive tool online designed to inform students before they begin a program as to the full cost of a degree or certificate. Our online calculator goes above and beyond, offering students the ability to project the full cost of a four-year or two-year degree, rather than providing a simple one-year snapshot like most other tools.

Our team of financial advisors is equally eager to go above and beyond helping students make informed decisions. New students don’t always understand the risk of taking student loans, or the opportunity to apply for other types of financial aid like scholarships or grants they qualify for to help cover their tuition. Should a student choose to enroll with us, a financial advisor is assigned to assist them through graduation.

While we can make these resources available to students, we can’t require them to listen to advisors, nor can we require students have regular financial aid counseling beyond the two interactions prescribed in law. Furthermore, law prohibits institutions from preventing a student from taking out unnecessary student loans or loans larger than what the student reasonably needs for their education. Students can take on as much student loan debt as they are eligible for, whether or not they need it.

Universities have a strong stake in making sure students make sound financial decisions. If Congress would pass legislation granting us the authority to prevent students from taking out unnecessary loans and allow us to require further counseling, we could have an even greater impact addressing the national challenge of growing student loan debt.

Such legislation would be a particularly important tool for schools in light of the upcoming Gainful Employment regulations. These regulations will tie a program’s eligibility to receive federal financial aid through title IV funding to a calculation of graduates’ student debt and post-graduation earnings. Seeing as the regulation will mean student debt impacts university programs, we should be considering how to give universities a stronger tool for preventing students from taking on excessive debt.

University of Phoenix is committed to high standards of accountability, transparency and compliance. I’ve always been a data-driven individual, it was the hallmark of my tenure at University of Michigan, and it continues to shape the work I’m doing at University of Phoenix. I’m glad the Department annually calculates the newly announced default rates. Our institution is pleased to show meaningful, measureable progress in helping students avoid the negative consequences of default and we hope to continue this trend. 

No university can control the conditions that impact the economy and job market, and currently we cannot control students who are overburdening themselves with debt. However, we can continue to offer students advice and we can actively encourage lawmakers to support new tools for all universities to better address student loan debt and encourage responsible borrowing.

Timothy P. Slottow is the seventh president of University of Phoenix.

The views expressed by authors are their own and not the views of The Hill.