Restore Ability to Benefit Program with Limits to Prevent Abuses

As Inside Higher Ed reported yesterday, lawmakers from both political parties are pushing for the restoration of a program that allows college-ready students who haven’t earned a high school diploma or GED to receive federal financial aid funds to pay for college. That’s good news. But rather than simply bring back the program as it previously existed, lawmakers should limit the program to schools that have a proven track record of serving their students well to prevent the type of abuses that have hounded it in the past.

“Ability to Benefit” (ATB) was a policy in place until July 2012, when it was eliminated as part of a money-saving maneuver to shore up funding for the Pell Grant program. The ATB program permitted students who hadn’t graduated from high school or obtained a GED to receive aid, provided that they could demonstrate they were ready for college-level work through either passing a federally-approved exam or successfully completing at least 6 credit hours of postsecondary education.

While the ATB program benefited many students, it also experienced substantial controversy. In 2009, the Government Accountability Office (GAO), for example, conducted an undercover investigation at a publicly-traded for-profit college and found that the school was helping prospective students cheat on the ATB exam, presumably to pump up its enrollment numbers and collect more federal student aid funds. Test administrators gave the students answers to some of the questions. They also tampered with the test forms – crossing out wrong answers and replacing them with the right ones – to ensure that students passed. In addition, while conducting site visits at for-profit colleges around the country, the accountability office identified instances at two separate publicly-traded institutions in which recruiters “referred students to diploma mills for invalid high school diplomas in order to gain access to federal loans without having to take an ATB test.”

This was not the first time such allegations had been made. As the GAO report noted, both the Education Department’s Inspector General and the New York Department of Education found similar problems in the past.

While such abuses are clearly unacceptable, they should not obscure the importance of the program: that it gives students who dropped out of school, for one reason or another, the only opportunity they may have to earn certificates or degrees to advance their careers. The Department’s own experimental site demonstrated that “6-credit” ATB students did as well as those with a high school diploma.

Eliminating the program to help pay for Pell Grants was short-sighted. As the California community college system and the California Association of Student Financial Aid Administrators have said, “Economizing by closing the door on the neediest individuals who stand to gain the most from some career-specific postsecondary training just does not make policy, political or economic sense.”

Congress should bring back the ATB program. But there need to be limits on who can participate. As we’ve recommended at New America, only schools that have a cohort default rate under 15 percent or that meet other institutional accountability metrics should be able to take part in the program.

Lawmakers need to proceed cautiously. Otherwise, we may see the return of the type of abuses that bedeviled the program for years.