The Education Department is stepping up its oversight of the basic-skills tests that students without a high-school diploma or GED can use to qualify for federal student aid, a top official told members of Congress on Wednesday.
Testifying before a U.S. House of Representatives education subcommittee, Robert M. Shireman, deputy under secretary of education, said the department has put in place systems to better monitor publishers of the assessments, known as "ability to benefit" tests, and will revisit regulations governing the tests during a rule-making session that starts in November. The department will also consider publishing lists of legitimate institutions and diploma mills to help for-profit colleges differentiate between valid and invalid degrees, he said.
Wednesday's hearing came less than a month after the Government Accountability Office reported it had found that officials administering an ability-to-benefit test at a for-profit college had given out answers and had changed answer sheets so that students would be eligible for federal funds. In its report, the GAO also found that officials at two proprietary schools had helped prospective students obtain invalid high-school diplomas from diploma mills.
The Education Department approves ability-to-benefit tests submitted by private publishers. The publishers are responsible for certifying and monitoring test administrators, under the department's oversight.
While the GAO report did not find evidence of widespread cheating on the exams, it warned that lapses in the department's oversight of test publishers could allow unqualified students to receive federal student aid. Students who are unprepared for college courses are at greater risk of dropping out of college and defaulting on their student loans.
The report, "Proprietary Schools: Stronger Department of Education Oversight Needed to Help Ensure Only Eligible Students Receive Federal Student Aid," got the attention of the chairman of the House education committee, who called its findings "extremely troubling." In an e-mail message to Bloomberg News last month, the chairman, Rep. George Miller, Democrat of California, said he would hold hearings on whether for-profit colleges were "gaming the system" to enroll "students who may not be fully ready for college and may be more likely to default" on loans.
Wednesday's hearing did little to answer those questions, though it did give the Education Department and for-profit colleges an opportunity to defend themselves. In his testimony, Harris N. Miller, president of the Career College Association, argued that most of his members "play by the rules" and stressed that the report had not uncovered any "pattern of abuse."
"The good news is that we do not see evidence that fraud in ability-to-benefit tests or diploma-mill use is widespread—nor does the GAO," he told the panel.
Republicans on the committee seemed eager to give for-profit institutions the benefit of the doubt, asking questions designed to draw attention to the report's limited scope and suggesting that similar problems could be found at nonprofit institutions. Rep. Robert E. Andrews, Democrat of New Jersey, argued that student demographics could be behind the sector's high default rates. Students attending for-profit institutions tend to be older and to have lower family incomes, both factors that correlate with a failure to pay back student loans.
Even the oft-fiery Mr. Miller was relatively subdued, though he said he worried that for-profit colleges were encouraging unqualified students to take on high-interest debt.
"I'm a little concerned that we're developing a process that looks like subprime student loans," he said.
The most dramatic moment in the hearing came at the beginning, when George A. Scott, the director of education, work-force, and income-security issues at the GAO, played a recording of a test administrator providing answers to students. He also showed members images of doctored answer sheets.
This is not the first time the Education Department has been criticized for its oversight of ability-to-benefit tests. In 2002, following a series of audits, the department's Office of Inspector General recommended that the agency improve its monitoring of test publishers. While the department took some measures to do so, "additional improvements are needed," the acting inspector general, Mary Mitchelson, told members Wednesday. In fiscal 2009, 11 percent of all federal aid, or $12-billion, went to students who had taken ability-to-benefit tests, she said.
Ms. Mitchelson said her office is investigating 15 matters related to ability-to-benefit testing and cited examples of previous investigations that have resulted in jail terms for officials, and fines and other penalties for colleges that violated the law. The office also continues to investigate diploma mills, she said.
It's unclear if Congress will hold additional hearings on proprietary institutions. However, ability-to-benefit tests and diploma mills are on the agenda for an Education Department rule-making process that is scheduled to begin in early November.