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September/October 2014 Who’s Afraid of College Rankings?

Obama wants the federal government to disclose how much it actually costs to attend different colleges and universities, and what their success rates are. But to do so, he has to work around a powerful, little-known lobby and its Republican friends.

By Laura Colarusso and Jon Marcus


Headquarters of the status quo: Colleges and university trade associations congregate at One Dupont Circule- an address that, to Washington insiders, is shorthand for the higher ed lobby. Credit: Alaina Lancaster.

On a gray, drizzly morning in February, hundreds of university and college leaders gathered in the ballroom of the Hyatt Regency Hotel on Capitol Hill in Washington, D.C., for the annual meeting of the National Association of Independent Colleges and Universities, or NAICU. At the top of their agenda was finding a way to defeat a new college rating system proposed by President Barack Obama, which the administration hopes will give consumers a better idea of which schools are worth the tuition they charge.

Once David Warren, NAICU’s president, took the stage, the tone of the event shifted from trade meeting to church revival. “We have been under steady, unrelenting pressure,” said Warren, who spoke of an “overreaching executive branch” that seeks to use unreliable data to measure the effectiveness of higher education institutions that are vastly different from one another. The rating system would fail to capture “the specific mission of an institution at whose core is where the value can be found.” Then the tall, silver-haired former Ohio Wesleyan University president with a booming voice and a divinity degree from Yale dispatched the members of his congregation out into the rain and toward the mist-shrouded Capitol building to deliver the same message to their congressional representatives. “Tell your story to your member of Congress, why this is an ill-conceived notion,” Warren urged. “No congressman wants an ugly rating for an institution in his district.”

It was a rare glimpse at a lobbying operation that even critics say has been as effective as it is little known: the one that represents American colleges and universities.

NAICU, which advocates for private nonprofit colleges and universities, is one of the “Big Six” trade associations that represent public universities, private universities, community colleges, and other higher education interests. The biggest is the American Council on Education, or ACE, which houses many other higher ed trade organizations in its headquarters at One Dupont Circle—an address that, to Washington insiders, is shorthand for the higher ed lobby.

Virtually unknown outside the Beltway, the denizens of One Dupont have been remarkably effective over the years, as evidenced by the nearly $200 billion the federal government spends annually on higher education, mostly in the form of student financial aid, tax breaks, and research grants. Another testament to the lobby’s power is that most of this funding comes with few strings attached. Schools get the money with, by and large, no requirements that they control their costs, assure their quality, or meet other meaningful standards of performance.

But with voters increasingly alarmed about the ever-rising price of college, which has quintupled student loan debt in the past ten years, the Obama administration has begun pushing policies to get better results. Last summer, the president announced that he was directing the Department of Education to use existing federal data to create a system that would rate the performance of each of America’s thousands of colleges and universities on such things as graduation rates and net price—the actual amount paid, per student, after discounts and financial aid. The stated aim is to provide students and their parents with more and better information so they can make savvier choices when choosing a college, putting more market pressure on the system.

The ratings are the first step in a broader accountability drive by the administration and some other elected officials. Once a system of measuring college and university performance is established, Obama wants to tie federal funding to those results—a connection a growing number of states have already made in their higher education budgets. And because any performance measurement system is only as good as the quality of the underlying data, a bipartisan group of lawmakers has introduced legislation in Congress to strengthen the information the federal government collects and makes public.

So far, the political jockeying over these measures has mostly taken place behind closed doors. But the fight is likely to become more public this fall, when the administration plans to release the first draft of its new ratings proposal. While some congressmen have vowed to expressly block him from doing it, Obama has been able to move forward with the rating system without congressional approval, which has become a signature example of his “pen and phone” strategy to advance his agenda in a gridlocked Washington. But for the very same reason, it is drawing the ire of Republican lawmakers who portray it as a burdensome new regulation pushed by an out-of-control presidency— in short, a perfect illustration of what their broader battle with Obama is all about. And behind the scenes, groups like NAICU are stoking that fight.

Higher ed lobbyists contend that their influence is nowhere near as great as their critics suggest. “People think of the guy in the raincoat and the cash. They don’t understand what lobbying is. Lobbying is using First Amendment rights to talk to members of Congress,” said Sarah Flanagan, vice president for government relations at NAICU. “I’m always amused at the descriptions of our enormous power,” added Terry Hartle, senior vice president for government and public affairs at ACE. “We don’t have PACs, we don’t do fund-raisers, we can’t deliver votes.”

But while the lobby largely doesn’t play in the campaign money game (except for private for-profit colleges like the University of Phoenix and its parent company, the Apollo Group), its power derives from other sources. The Big Six—ACE, NAICU, the American Association of Community Colleges, the American Association of State Colleges and Universities, the Association of American Universities, and the Association of Public and Land-grant Universities—had combined budgets of $110 million in 2011, the last year for which the figures are available from documents they are required to file with the Internal Revenue Service. Such resources allow these groups to hire smart and knowledgeable researchers, wonks, and ex-policymakers, often from the government agencies that regulate them. For instance, ACE in February brought aboard Dan Madzelan, former acting assistant secretary for post-secondary education at the Department of Education, as one of its top lobbyists.

The greatest source of the higher ed lobby’s influence derives from the fact that all members of Congress have colleges and universities in their states and districts. These institutions tend to be major local employers, focal points of civic pride (including for their sports teams), and vehicles for federal research dollars that fuel regional private-sector growth. College and university leaders aren’t afraid to contact their representatives in Washington, often at the prompting of their lobbyists. “They crank out those college presidents to contact their senators and representatives, and college presidents have a lot of clout,” said a former education lobbyist. “They’re doing hand-to-hand combat.”

Laura Colarusso and Jon Marcus Laura Colarusso and Jon Marcus teamed up for this article. Laura Colarusso is a freelance writer who has written for a variety of publications, including Newsweek, the Boston Globe and the (Newark) Star-Ledger. Jon Marcus is the higher education editor at The Hechinger Report, a non-profit, nonpartisan education news outlet based at Teachers College, Columbia University.

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