A r c h i v e d  I n f o r m a t i o n

U.S. Department of Education Strategic Plan, 1998-2002 - September 1997

Goal 3. Ensure access to postsecondary education and lifelong learning.

Postsecondary Education

Postsecondary education has been America's traditional gateway to the professions, more challenging jobs, and higher wages. American postsecondary education has become world-class, and foreign nations have sent thousands of their future leaders here for training. Business, government, and the field of education itself have eagerly sought postsecondary graduates, including graduates from two-year technical programs. Given current trends, at least two years of postsecondary education will be increasingly necessary in the next century to gain higher earnings and improved job opportunities.

Although American higher education is the envy of the world, almost 40% of our own high school graduates do not immediately attend postsecondary education. Moreover, postsecondary enrollment and completion rates are significantly lower for blacks and Hispanics and for students from lower- and middle-income families than for whites and those from higher-income families. Although enrollment rates have been rising in recent years, postsecondary education remains an elusive option for too many American high school graduates.

To help ensure access to postsecondary education, we need to continue to make progress in three key areas, ensuring that:

1. All students leave high school with the academic background and preparation to pursue postsecondary education. Movement toward achievement of Goals 1 and 2 will go a long way toward making this a reality. We also need to help motivate students to continue their education beyond high school by providing them with earlier and better information about what the benefits of postsecondary education are, what admission requirements are, how much college costs, and how they can get financial aid to help pay postsecondary costs.

2. All students motivated and academically ready to attend postsecondary education have the financial resources and support services needed to do so.

3. The student aid delivery system is efficient, financially sound, and customer-responsive.

While overcoming barriers to postsecondary enrollment and completion for young people is critical to our nation, it is equally essential to encourage lifelong learning, whether it be graduate school or adult basic education, advanced technical training or training in job entry skills. This includes many for whom lifelong learning opportunities are of special importance, such as persons with disabilities, adults lacking basic skills, and those whose job skills need upgrading or who require retraining because of labor market changes.

Persons with disabilities are at least twice as likely as people without disabilities to be unemployed. Their low employment rate is estimated to cost society in excess of $2 billion annually. At the end of 1994, 19.5% of the working-age population--30.7 million people--had a disability, and 14.5 million of these were considered to have a severe limitation.

Adults who haven't graduated from high school or postsecondary programs are also at a serious disadvantage when competing for jobs and maintaining their independence from government support. The National Adult Literacy Survey of 1992 showed that at least 21% of adults age 16 and older lacked basic reading and math skills needed for well-paying jobs or entry into higher education.

To address these problems, the Department is giving priority to improving the quality of its rehabilitation and adult education programs, including identifying best practices and updating performance data systems to provide feedback for program improvement. It also is supporting work with other federal agencies to coordinate programs and improve employment outcomes for adults with disabilities and adults who need basic skills education, especially those on welfare.

Use of Evaluations and Assessments in Developing Goal 3

In developing our goals, objectives, and strategies in Goal 3, the Department relied on a number of evaluations, research studies, and management analyses. Specifically,

• A number of research studies have been and are being conducted using data collected by the National Center for Education Statistics and the Census Department and targeted studies of specific populations affected by changes in legislation or policy. These studies are being used to assess the educational effects of the student aid programs and to help pinpoint where barriers to postsecondary education and lifelong learning remain for certain groups within the population. Strategies are then developed to help overcome these barriers.

• A series of management analyses--including the Direct Loan evaluation, customer satisfaction surveys, and studies of the "gatekeeping" process that determines which postsecondary institutions are eligible to participate in the student aid programs--aided in the identification of successes and problems in the management of the student aid programs. Another major source of evaluation information has been the General Accounting Office (GAO) reports on student financial aid management.

• Evaluations of the TRIO, adult education, and vocational rehabilitation programs were used to identify critical strategies for program improvement. For example, prior studies on adult education made it clear that the field urgently needs information on effective practices and improved state and local performance data, both of which are plan strategies as well as current evaluation priorities.

Objective 3.1: Secondary school students get the information and support they need to prepare successfully for postsecondary education.

Research has shown that to help students attend and complete college, motivating them and their families to anticipate and plan for college early and providing students with needed non-financial support are at least as important as ensuring financial assistance. This is particularly true for low-income students. A recent study showed that, overall, less than half of eighth-graders from families in the bottom third of the income distribution are attending a postsecondary institution within two years of graduating from high school (44%). However, 88% of low-income students who take a rigorous high school program go on to college.

Core Strategies:

• National campaign for middle-school students. Launch a national campaign to motivate middle-school students and their parents to prepare for higher education by providing information on (1) the benefits of education beyond high school, academic requirements for college admission, and financial costs of attending postsecondary institutions; (2) availability and value of financial aid; and (3) the support services and programs available in their state and local areas. Special emphasis will be placed on developing strategies to reach low-income and first-generation college families.
• Sector coordination. Provide incentives and guidance for increased coordination between K-12 schools and postsecondary institutions to ensure that students are ready for college.
• Outreach and dissemination initiatives. Enhance the effectiveness of the TRIO Upward Bound and Talent Search programs by improving outreach and dissemination efforts and by applying the latest research on effective strategies to assist disadvantaged students.
• Develop a student- and family-focused "system" to support postsecondary education using computer and information technologies.
  • Develop procedures to give students and families a simple mechanism for electronically applying for student financial aid through the world wide web (legislative authority may be needed for full implementation). This system will give prospective students a single point of contact for all federal student aid programs, and, eventually, with the cooperation of the postsecondary education community, will respond to all their financial aid questions, including estimates of likely federal aid amounts and costs associated with attending specific schools.
  • Work with the financial aid community and Congress to implement the use of a multi-year promissory note for student loans that will streamline application procedures, minimize delays in receiving funds, and provide better consumer information for borrowers. (Requires legislative action.)

Objective 3.2: Postsecondary students receive the financial aid and support services they need to enroll in and complete their educational program.

Education increasingly determines who will prosper in our economy and who will not. Most of today's good jobs require more skills and training than a high school diploma can provide. Proof of the critical importance of postsecondary education is the large and growing economic return to education. Fifteen years ago a worker with a college degree made 38% more, on average, than a worker with a high school diploma. Today, that difference is 73%.

Economic efficiency and fairness require that we make at least two years of postsecondary education as universally available as a high school diploma is now. Unfortunately, the cost of college limits access for many low- and middle-income families. The average cost of attending a public college increased from 9% of the typical family's income in 1979 to 14% in 1994. The Administration has worked with Congress to enact tax relief and has succeeded in passing a comprehensive package of proposals--additional tax relief, increased grant aid and work-study assistance, and reduced borrowing costs--to help ensure that postsecondary education is affordable for all Americans.

Core Strategies:

• Financial aid programs.
  • Provide aid to postsecondary education students through the Pell Grant program, Campus-based programs (Supplemental Educational Opportunities Grants, Work-Study, and Perkins Loans), Federal Family Education Loan program, and Direct Student Loan program. Carry out activities to strengthen and improve the capacity of the schools to administer aid programs.
  • Help student loan borrowers manage their debt by informing students of the availability of flexible repayment options in the Direct Loan program, encouraging lenders in the FFEL program to also offer flexible repayment options, and working with postsecondary institutions to provide good debt management counseling before a student borrows, before leaving school, and while the student is in repayment.
• New financial aid initiatives. Provide financial support for postsecondary education to students and parents through the tax system by working with the Treasury Department to implement the two tax credits for postsecondary education. In particular, ED will work to ensure that all Americans who might benefit are informed about the new tax credits and know how to use them.
• Support services. Provide federal support and technical assistance for the higher education programs, in particular the TRIO and Aid for Institutional Development programs, that are key in providing the services needed to help disadvantaged students enter and complete postsecondary education.
• Streamlined processes for aid delivery. Initiate a pilot project with postsecondary schools to have their students receive federal aid disbursements through streamlined processes similar to those used for electronic benefits transfers.

Objective 3.3: Postsecondary student aid delivery and program management is efficient, financially sound, and customer-responsive.

In 1997-98, ED will provide almost $43 billion through its student financial assistance programs (including grants, loans, and work-study) to help students attend postsecondary institutions. Ensuring the effective and efficient delivery of these funds is one of the Department's highest priorities. In recent years, great strides have been made in improving the management of the student aid programs.

• Over a four-year period, default rates dropped by over 50%, from 22.4% of loans entering repayment in FY 1990 to 10.7% of loans entering repayment in FY 1994.
• Improved institutional oversight by the Department has led to the removal of 875 schools, including 672 schools from all student aid programs and an additional 203 from federal loan programs.
• The Department has implemented rigorous certification standards for institutions to participate in the student aid programs; as a result, about 33% of initial applications to participate in the student aid programs have been rejected in the last three years--double the percentage in 1990.
• More than 1,000 schools of questionable capacity have been placed on provisional certification during the past four years so that the Department can move quickly to remove them from participating in the student aid program should problems arise.

Core Strategies:

• Customer satisfaction.
  • Emphasize customer service in all facets of operation and continue to monitor satisfaction levels among students, parents, and postsecondary institutions participating in the student aid programs.
  • Use the best of computer and information technologies to help students and their parents learn about and apply for student financial aid. This will include:
    • a simple and secure mechanism for electronically completing, through the world wide web, the Free Application for Federal Student Aid (FAFSA) used to apply for student financial aid.
    • a single point of contact for all federal student aid programs to address all financial aid questions, including estimates of likely federal aid amounts and costs associated with attending specific schools.
• An integrated, accurate, and efficient student aid delivery system.
  • Integrate the multiple student aid databases based on student-level records.
  • Improve contract performance for major information systems by increased use of performance-based contracting and by following OMB criteria (i.e., "Raines Rules") for technology system investment proposals.
  • Use mutually-agreed-upon industry-wide standards for data exchanges to stabilize data requirements, improve data integrity, and reduce costly errors.
  • Continue or expand interagency coordination on data matches--with the Internal Revenue Service, the Social Security Administration, the Immigration and Naturalization Service, the Selective Service, the U.S. Postal Service, and the Departments of Defense, Justice, and Housing and Urban Development--to help improve data accuracy and reduce burden on respondents. (Legislative authority may be needed for full implementation.)
  • Increase the community's use of ED's web site as a principal source of financial aid information, programmatic and technical publications, and software.
• Effective institutional oversight.
  • Develop and utilize a risk management system in order to target compliance and enforcement activities on poorly performing institutions while reducing burdens on high performing ones.
  • Expand use of the case management approach to maximize the effectiveness of institutional oversight. This approach encompasses review of recertification applications, compliance audits, financial statements, risk management system inputs, and program reviews.
• Legislative support for default reduction. Seek legislative changes that (1) increase risk sharing in the loan programs to provide more incentives for lenders and guaranty agencies to prevent defaults and (2) obtain new authorities to improve our collections from defaulted borrowers.
• Additional interagency coordination. Work with the Internal Revenue Service on tax refund offsets and address matches, and with the Department of Treasury on administrative offsets and student loan interest rates.
• Support innovations in the delivery of postsecondary education. Coordinate with states, schools, and Congress to change financial aid laws and regulations in order to support innovations in the delivery of postsecondary education, such as distance education and the creation of virtual universities, while maintaining accountability in the use of federal funds. (Legislative action needed.)

Objective 3.4: Adults can strengthen their skills and improve their earning power over their lifetime through lifelong learning.

For those adult Americans with disabilities, education must often be coupled with the provision of effective rehabilitation services if they are to succeed in competitive labor markets. The quality of rehabilitation programs is critical to ensuring that our nation's citizens with disabilities will be able to fully compete in the 21st century work world. The Department plans to increase the use of rehabilitation technology and will work to improve the efficiency of current rehabilitation programs.

National data have shown that too few adult education participants-particularly in adult basic education-stay in the program long enough to receive a substantial benefit. Moreover, the research on effective programs is very limited. The Department is sponsoring several research and evaluation projects in an effort to improve the effectiveness of adult education programs and to better integrate them with other training programs and the reformed welfare system.

Core Strategies:

• Direct financial support for lifelong learning in postsecondary education and employer-provided education. As described in objective 3.2, the Department is committed to providing monetary support for adults wanting to return to school through the financial aid programs and the tax system. In addition, the balanced budget agreement extended Section 127 of the tax code allowing workers to exclude up to $5,250 of employer-provided education benefits from their income.
• Financial support to states for vocational rehabilitation and adult education. Provide grants to states to carry out adult education and rehabilitation programs (Adult Education State Grants and Vocational Rehabilitation State Grants).
• Best practices for vocational rehabilitation. Assist individuals with disabilities to achieve desired employment outcomes by identifying and disseminating information regarding best practices.
• Linking vocational rehabilitation indicators with high quality performance measurement systems. Work with states to improve the state performance measurement systems in the vocational rehabilitation program in order to ensure progress toward performance indicators and identify areas for technical assistance.
• Rehabilitation services interagency coordination.
  • Encourage coordination between state vocational rehabilitation agencies and state-level job training programs by awarding grants for system changes.
  • Establish a federal interagency council to promote the employment of persons with disabilities. In concert with the Departments of Labor, Health and Human Services, Defense, Veterans Affairs, Commerce, Transportation, Justice, and the Social Security Administration, the Architectural and Transportation Barriers Board, the Office of Personnel Management, and the Small Business Administration, carry out an initiative to set in place the requisite policies and actions needed to improve employment rates and outcomes for persons with disabilities and to reduce overlap in services and programs.
• Access to quality adult basic and secondary education.
  • Expand the availability of high quality adult basic and secondary education to all adults lacking the necessary skills and credentials by encouraging the appropriate use of distance learning and other technologies and by coordinating with job training programs that integrate academic and workplace learning.
  • Through research by the National Center on Adult Learning and Literacy and effectiveness evaluations conducted by the Planning and Evaluation Service, identify and validate effective adult basic education and English as a second language practices and disseminate study findings in formats that are accessible to a wide audience.
• Sound adult education state and local program management. Establish benchmarks for adult education performance systems on the levels of expected performance from effective programs and help improve state and local performance information systems to ensure that the information needed for good program management and improvement is available.
• Adult education an integral part of reformed welfare systems. Strengthen the role of adult education in the new welfare-to-work systems by providing technical assistance to states and local programs on models for integrating work readiness activities into the basic skills delivery system.

The balanced budget signed into law in August 1997 provides the largest investment in higher education since the G.I. Bill in 1945. The tax cuts and education spending provisions contained in this bill will help make the first two years of college universally available and they will give many more working Americans the financial means to go back to school if they want to choose a new career or upgrade their skills. When fully phased in, 12.9 million students are expected to benefit from these tax cuts--5.8 million under the HOPE Scholarship tax credit, and 7.1 million claiming the Lifetime Learning tax credit.

• Up to a $1,500 tax credit for students starting college: The HOPE Scholarship tax credit helps make the first two years of college universally available. Students (or the parents of dependent students) will receive a tax credit of 100% on the first $1,000 of tuition and required fees (less grants, scholarships, and other tax-free educational assistance) and 50% on the second $1,000. The HOPE Scholarship credit can be claimed in two taxable years for students who are in their first two years of postsecondary education and who are enrolled on at least a half-time basis for any portion of the year. This credit will be available for payments after December 31, 1997, for college enrollment after that date. The credit is phased out for joint filers with adjusted gross income (AGI) of between $80,000 and $100,000 and single filers with AGI of between $40,000 and $50,000.

• The Lifetime Learning tax credit: This tax credit is designed to assist a broad cross section of Americans-adults who want to go back to school to upgrade their skills; juniors, seniors, and graduate and professional students; people requiring new educational training to change careers; and people who want to take a course or two to improve themselves. A family will receive a 20% tax credit for the first $5,000 of tuition and required fees (less grants, scholarships, and other tax-free educational assistance) paid each year through 2002, and for the first $10,000 thereafter. The Lifetime Learning tax credit is available on a per-taxpayer (family) basis and is phased out at the same income levels as the HOPE scholarship. Families will be able to claim a Lifetime Learning tax credit for some members of their family and the HOPE Scholarship credit for others who qualify.

• Expanded Savings Opportunities: Several provisions of the balanced budget make it easier for families to save for their children's college expenses:
  • Beginning January 1, 1998, taxpayers may withdraw funds from an IRA, without penalty, for the postsecondary education expenses of the taxpayer, a spouse, a child, or even a grandchild.
  • For each child under 18, families may deposit $500 per year into an Educational IRA in the child's name. Earnings will accumulate tax free and no taxes will be due upon withdrawal if used to pay expenses at a postsecondary institution before the child turns 30.
  • Qualified state-sponsored tuition plans may now include savings for certain room and board expenses for students who attend at least half-time. Withdrawals are eligible for the HOPE Scholarship and Lifetime Learning tax credits.

• Easier Student Loan Repayment: Students or their families can, beginning in 1998, take a tax deduction for interest paid in the first 60 months of repayment on their student loans. In addition, student loan amounts forgiven by non-profit, tax-exempt, charitable or educational institutions for borrowers who take community-service jobs that address unmet needs will be excluded from income.

• Expanded Pell Grants for Needy and Deserving Students: The balanced budget agreement also provides for a substantial $300 increase in the Pell Grant maximum award, to $3,000. This builds upon last year's increase of $230 in the maximum award to begin to restore the lost buying power of Pell Grants for students at the lowest income level.

[Goal 2. Build a solid foundation for learning for all children.]

[Goal 4. Make ED a high-performance organization by focusing on results, service quality, and customer satisfaction.]