Opinion: There’s a better way to tackle America’s student debt crisis

Editor’s Note: Kelli Rhee is president and CEO of Arnold Ventures, a philanthropy with portfolios dedicated to criminal justice, health care, higher education, public finance and infrastructure. The opinions expressed in this commentary are her own. Read more opinion at CNN. 

Back in June, mere hours after the Supreme Court rejected the Biden administration’s first attempt at broad-based student debt relief, the White House kicked off a renewed push. The president announced a new effort to cancel student debt, this time under a different legal authority than the “national emergency” one used previously. The latest attempt, which requires a lengthy rulemaking process before it could take effect, cites the education secretary’s authority to “compromise” federal student loans in certain cases. With this latest effort, the administration hopes to navigate the Supreme Court’s clear pronouncement that the education secretary lacked the authority to “rewrite [the] statute from the ground up.”

Unfortunately, what’s likely to follow is a repeat of last year’s legal back-and-forth: a lawsuit, a protracted court battle and persistent uncertainty for borrowers. And even if this new gambit is successful, it won’t solve the underlying problem. America’s student loan debt will likely again reach $1.6 trillion — today’s staggering total — within just a few short years. In the meantime, the rest of the administration’s important higher education agenda will almost certainly shift to the backburner as attention is placed instead on regulating debt cancellation.

Given the time and distraction required for a long-shot chance at winning in court, and the fact that student loan payments are resuming this month, the administration would be wise to consider a different approach to its higher education agenda. By instead focusing on holding colleges accountable for their value and ensuring borrowers have the support they need, it could make a meaningful and tangible difference in the lives of students and borrowers — improvements that will endure well beyond Joe Biden’s tenure as president.

One such improvement is holding predatory for-profit colleges — of which there are hundreds in the US — and career-training programs accountable. Even before the pandemic brought the student loan problem into sharp relief, millions of student borrowers were in default, a burden that often falls disproportionately on those who dropped out of college and those who attended schools that charge for largely valueless degrees, or those that produce a negative return on investment.

The Department of Education has taken steps to hold accountable career-training programs that don’t deliver for students. Just last week, the Department finalized new regulations that would strip eligibility for federal aid dollars from career-oriented programs that leave students deeply indebted or without quality job opportunities, and provide more transparency on outcomes and value for all programs. But while the administration moved aggressively to finalize the rules this year, realizing the goals of those regulations — protecting both students and taxpayers from wasting time and money in programs that never pay off — they must be enforced quickly. More than 2.5 million students enroll in a college or university for the first time each year; more time spent putting new rules into effect could mean billions of dollars wasted for those who find themselves in low-value programs in the meantime.

The administration must also work with Congress to craft lasting solutions to increase the return on investment for higher education. Working only through executive action and regulations leaves progress fleeting, vulnerable to backtracking under a different administration.

Republicans introduced legislation earlier this year that would increase transparency into both the costs of enrolling in college and the outcomes that students can expect from their programs, including the likelihood of graduation and what they can expect to earn after college. Even more significant, the bill would altogether prevent federal dollars from going to programs where most students are no better off for having attended, as measured by the wages they earn later in life. Every loan made to a student seeking a degree from a low-quality or predatory institution compounds the country’s higher education debt, and the administration ought to focus on the root of the problem: institutions that take money from students but provide little of value in exchange.

Finally, the Department of Education can also take action to reform the work of state regulators and accrediting agencies that oversee colleges that are at a high risk of predatory behavior, poor outcomes and even closure. In recent years, hundreds of thousands of students were left stranded when their institutions closed abruptly. And each year, more than 700,000 students pay for pricey degrees from schools with poor outcomes. Yet states and accreditors have taken relatively few actions against these colleges to compel their improvement, instead rubber-stamping their mediocre results and ensuring their continued ability to enroll unsuspecting students and access billions in federal dollars.

Greater oversight of these colleges is badly overdue, and a rigorous regulatory focus on colleges with low graduation rates and high default rates would improve students’ lives. The administration should increase the requirements for states and accreditors to act in the face of poor quality, encouraging them to hold institutions’ feet to the fire and spark real change in how well they serve students. But today, this work is barely underway; the administration needs to stay focused on it.

Much of successful governing is deciding not only what to do, but what not to do. In higher education, the White House should recognize that it is fighting an unwinnable battle on mass student loan cancellation — something the Supreme Court made abundantly clear in its recent ruling. With less than half of the president’s term remaining, losing this fight a second time poses long-term risks to Biden’s higher education agenda.

Meanwhile, the administration can notch clear wins today, ones that will leave millions of Americans better off. By focusing on predatory actors within higher education and improving the oversight of risky colleges, the administration would improve our higher education system — and advance policy changes that can stand the test of time.

This piece has been updated with news developments.