In order to help new generations of Americans achieve middle-class employment and pay, RAMC is dedicated to ensuring student success at our partner institutions. However, supporting community college students requires a specific, unique mindset that unfortunately many policy-makers do not have or realize. We believe that adequately supporting community college students is dependent on improvements in three areas: risk-sharing, federal regulations, and data collection.

Institutional Risk-Sharing

“Risk sharing” is the idea that colleges should bear some of the cost when their students default on federal loans. While RAMC is not entirely opposed to new risk-sharing concepts, we firmly believe that any risk-sharing should not jeopardize the missions of community colleges or other institutions of higher education. Risk-sharing should never prevent schools from serving low-income, high-risk individuals seeking shorter training to gain employment. Similarly, risk-sharing should absolutely not discourage schools from experimenting with new methods aimed at serving populations that do not always respond to traditional education approaches.

At RAMC, we are focused on the success of both the college and the student, and to raise the rates of community college completion. Here are some of our priorities to boost student success and community college completion.

Consider the unique role of open-access institutions, like community colleges: Community colleges fill the incredibly important role of educating predominantly low-income, adult, underrepresented minority and at-risk students. Nearly 40% of community college students are first-generation college students. 57% of first-time college students whose family income is $32,000 or lower start at a community college. While it is vital that this population has access to higher education in order to participate in our increasingly demanding global economy, risk-sharing also punishes community colleges that try to serve at-risk students (at-risk students are more likely to trigger risk-sharing penalties for an institution). RAMC recommends that risk-sharing explicitly takes into account the unique, “non-traditional” population of students we serve to ensure institutions are not pressured to “play it safe” and shy away from new, innovative techniques that can help serve lower-income students.

Allow schools to implement risk-management protections along with risk-sharing: In order to ensure community colleges will not be penalized under a risk-sharing policy for factors outside of their control, community colleges need to have the ability to implement their own risk-management protections. For example, protections might include expanding upon existing front-end requirements for a student to receive a loan. This could be based on factors that include additional financial literacy requirements and informing students about different income potential for graduates with varying degrees. Another example would be to allow institutions to limit the amount of loans students can take out (perhaps only an amount equaling the cost of tuition and fees at the institution).

Ensure risk-sharing doesn’t prompt even more community colleges to opt-out of the federal student loan program: Based on 2013-2014 available data, 8.5% of community college students nationwide do not have access to federal loans because their colleges do not participate in the federal loan program. This is largely because of the increased burden and bureaucracy faced by colleges administering this program. While community colleges are an “affordable” option, with average tuition and fees equaling $3,260, the majority (62%) of community college students still apply for federal financial aid. Therefore, in order to not punish students by limiting their access to federal aid, it is imperative any new federal policies do not drive more community colleges to opt-out of participating in the federal loan program.

Fairly account for institutions with small numbers of borrowers: Many community colleges only have a small number of borrowers in each cohort. Potentially requiring these colleges to either pay into a federal insurance program or provide financial backing for a percentage of student loan amounts will not likely account for the successes of a significant segment of their student population.

Federal Regulations

More bureaucracy and red tape cause less innovation and focus on ensuring students complete their education and find steady, middle-class jobs. Regulations, including those related to gainful employment, cash management, the college ratings system, and risk-sharing all hinder community colleges’ abilities to productively serve their students.

The burden regulations often have on institutions is evidenced by the increasing number of community colleges that have opted-out of the federal student loan program, as mentioned above. Further consideration must be given to ways regulations can be reduced and streamlined, leading to institutions being readily able to participate in the federal student loan program, and generally speaking, best serve their students.

Transparency and Data

RAMC believes that the current federal data system is broken, particularly for community college students. Current policy discussions are based on data representing “traditional” full-time students. However, most of today’s students do not attend school on a full-time basis. While RAMC encourages transparency and accountability, the federal data system must be improved to truly capture the outcomes and success of community college students. Our ideas for improving the collection of higher education data can be summed up in two main ways:

Improve postsecondary data systems. Federal programs have a built in bias towards first-time, full-time residential college experiences. RAMC supports efforts to update and expand the ability of the Integrated Postsecondary Education Data System (IPEDS) and other federal data programs, and to improve state longitudinal data systems, to be more useful to community colleges and their students. However, even with expected improvements to IPEDS this fall, this will not fully address the current issues this system faces with inaccurate reporting. Work needs to continue to be done to address this ongoing issue and implementation of any new policies, such as risk-sharing mentioned above, should be contingent on accurate and complete data.

Rationalize existing data collection to focus on meaningful metrics. Policymakers need to work to create new performance metrics that make sense for community college populations. This would require not only the development of new data for performance indicators, but also, the reduction or elimination of data collection that is unnecessary, duplicative or unused.