Tangled in Red Tape

Multiplying regulations bring colleges new costs and headaches. For what? - See more at: http://m.chronicle.com/article/Tangled-in-Red-Tape/150059/?key=SWglIlNoMCIdYC0zMD5DbjsEOnxpY0gmYXNDbXsibl1XFw==#sthash.BRfAfnw2.dpuf

Multiplying regulations bring colleges new costs and headaches. For what? - See more at: http://m.chronicle.com/article/Tangled-in-Red-Tape/150059/?key=SWglIlNoMCIdYC0zMD5DbjsEOnxpY0gmYXNDbXsibl1XFw==#sthash.BRfAfnw2.dpuf

Multiplying regulations bring colleges new costs and headaches. For what? - See more at: http://m.chronicle.com/article/Tangled-in-Red-Tape/150059/?key=SWglIlNoMCIdYC0zMD5DbjsEOnxpY0gmYXNDbXsibl1XFw==#sthash.BRfAfnw2.dpuf

Multiplying regulations bring colleges new costs and headaches. For what? - See more at: http://m.chronicle.com/article/Tangled-in-Red-Tape/150059/?key=SWglIlNoMCIdYC0zMD5DbjsEOnxpY0gmYXNDbXsibl1XFw==#sthash.BRfAfnw2.dpuf

Multiplying regulations bring colleges new costs and headaches. 

For what? 

This from the Chronicle of  Higher Ed:

Norwich University hired Nick Cooper, a lawyer, three years ago to help its distance-learning program navigate a complex, ever-changing landscape of state regulation. To the Vermont institution, he is essential—the only person standing between it and a regulatory misstep that could shut down a degree program in Massachusetts, cost the university thousands in Wisconsin, even get the president slapped with a misdemeanor in Alabama.

In blunt moments, Mr. Cooper concedes a Sisyphean weariness. Over the past three years Norwich has spent nearly half a million dollars dealing just with state regulations through his office. In the process, while working to set up online programs across the country, he has amassed maddening stories, like the year he spent trying to reach someone in Oregon who would sign off on courses, or the times he had to fly to Arkansas for routine Board of Education meetings, where officials would ask no substantial questions before rubber-stamping Norwich’s programs.

Mr. Cooper hopes that one day the regulations will stop multiplying and shifting, and that he’ll have most of them figured out for Norwich. "I am the only person here who tries to advocate for getting rid of his own job," he says. "I’m just a burden on the school. Our mission is to educate students and help them reach their goals, and I am not really involved in that."

Higher education is getting a lot of heat these days for its rising costs, bloated administration, and sluggish movement toward innovation. Those who work in the sector point to at least one cause: Having to devote staff members like Mr. Cooper to a vast regulatory regime of hundreds of rules from dozens of state and federal agencies with reams of required paperwork. The rules seem to have expanded with scrutiny of student debt and graduation rates. Leaders of traditional institutions often say they’re paying a price for higher education’s bad actors, while some observers argue that colleges just want to duck accountability. Of course, no industry relishes regulation, but many in this one wonder whether the red tape is accomplishing what policy makers intended.

Nicholas S. Zeppos, president of Vanderbilt University and co-chair of a new U.S. Senate task force examining the regulation of higher education, says the businessmen on his board of trustees tell him it’s more complicated than anything they see in the corporate world. "They are stunned by the range and depth and complexity of the regulatory environment we operate under," he says. "They are asking us more and more, ‘What is the cost of this?’ "

At this point, only a handful of colleges have even a hazy picture. In late 2011, Margaret L. Drugovich, president of Hartwick College, asked her staff to tally the time they spent on compliance reports, and to attach dollar figures. After a year, they found that 100 employees and six contractors had spent 7,200 hours responding to more than 60 federal, state, and local government agencies, as well as accreditors, athletic associations, and groups like the National Association for College Admission Counseling. In all, Hartwick spent about $300,000 following 247 rules. To make sure it kept track of them all, Ms. Drugovich reassigned a staff member in her office as a compliance officer.

Less than two years later, the list of regulations has grown to 309. Ms. Drugovich suspects that the drive to regulate has at least something to do with talk in the news media and among policy makers that colleges are prodigal, even opportunistic, in raising tuition year after year.

"As a nation, we haven’t figured out how to pay for the education that we want our citizens to have, and yet there is an urgency to do something," she says. "Sometimes I feel that some of the requirements and regulations that are being put forth are an attempt to demonstrate that something is being done."

As large, diverse enterprises, colleges and universities can be subject to a vast array of rules—covering the eligibility of athletes, use of intellectual property, limits of research, handling of pollutants, and privacy of students, among many others. With more attention being paid to the glaring, if anomalous, failures, like six-figure student-loan debt and unemployed graduates, policy makers are trying to exert more influence.

College presidents are quick to say they don’t fear accountability, nor are they calling for extensive deregulation. They just want some consistency and relief. Ms. Drugovich, who serves on the Senate panel with Mr. Zeppos, notes that because colleges "don’t speak as a single voice," they haven’t pushed back against the intricate rules that agencies keep layering on.

That’s changing. The task force is studying how colleges and government agencies might work together to streamline some requirements. The push could lead to unlikely alliances between left-leaning educators and anti-regulation advocates on the right. In January, when Ms. Drugovich spoke at a meeting for private-college presidents, some prominent figures in the audience suggested that a Republican victory in November might bring relief.

Now Lamar Alexander, a Republican from Tennessee who led the Senate task force, is likely to be the next chair of the Senate education committee. "My principal goal in higher education is to deregulate it," he told The Chronicle this month. A former president of the University of Tennessee at Knoxville, he has directed the panel to identify the most onerous and costly regulations, so when it comes time to reauthorize the Higher Education Act, Congress can "weed the garden."

Just how much weeding is needed depends on whom you ask. From some corners, you might get unexpected answers. Andrew P. Kelly is no fan of regulation, as a scholar of education policy at the American Enterprise Institute, a conservative think tank. Yes, he says, regulations stipulating how a college reports fire-safety information, for instance, are often cumbersome and perhaps useless to consumers and regulators alike. But some rules—say, those on cohort default rates—are about quality control.

The problem, says Mr. Kelly, is that too many educators don’t distinguish between those two kinds of regulations. "When you ask colleges what’s burdensome about what they have to report, they’ll say, basically, all of it." The challenge is sorting out which rules are useful to watchdogs and consumers, and which aren’t.

The prospect of deregulation prompts two lines of thinking, Mr. Kelly says. One simply favors easing the burdens on colleges (although even if Congress wiped out half of the regulations governing colleges, he says, tuition probably wouldn’t drop much). Another approach is lowering the barriers to entry—through, say, the accreditation process—to bring new players into the market and use competition and innovation to drive down prices. Traditional colleges aren’t so keen on that idea.

For now, it’s the smallest colleges that can least afford the cost of compliance. Ellen McCulloch-Lovell, president of the 250-student Marlboro College, in Vermont, says her staff estimates the annual cost at $400,000, or about 3 percent of the budget. Marlboro sets aside $40,000 a year for legal services, but she expects the college to top that figure this year.

What the estimates at Marlboro and Hartwick can’t measure are the opportunity costs. Marlboro has only two people working in financial aid, and each one spends half the time following regulations. Maintaining the net-price calculator. Calculating cohort default rates. Tracking and reporting services for student veterans.

"That is like a full staff person who I would like to be talking to students about their financial aid, about their financial literacy, and helping them assemble the resources to attend college," Ms. McCulloch-Lovell says. But given the number and complexity of the rules, she doesn’t dare pull people off their compliance duties. "I am constantly worried about what I am missing."

She has good reason. Federal and state regulations, if not followed, can carry hefty fines. And some experts say agencies have grown more zealous in enforcement.

An agency can open a compliance review based on its own criteria or on a specific complaint, says Jerry D. Blakemore, general counsel at Northern Illinois University, who helped set up a database of regulation for the National Association of College and University Attorneys. Once on a campus for one issue, he says, government officials can expand their review to other areas—holding a kind of "open house" for complaints, he says. 

"They are setting up on campus and saying, We’re on campus, here’s the room we’re in, and if anyone wants to come talk to us, we’re here," he says.

Lately, out of more than 400 regulations that Northern Illinois must follow, it’s had three compliance reviews. One, by the U.S. Department of Education on financial aid, just ended, and it was favorable to the university, he says. Still, that review alone took months of gathering information, hours of conference calls, and multiple visits from a departmental delegation—with attention from the president, provost, vice president of student affairs, director of financial aid, deputy general counsel, and a slew of support-staff members.

Mr. Blakemore says, "There is a cost associated with that."

With intense focus recently on campus sexual assault, policy makers have tightened the rules on two key laws on gender equity and campus crime: Title IX and the Clery Act. The latter, named for Jeanne Clery, who was raped and murdered at Lehigh University in 1986, requires colleges to disclose information about crimes on campus and threats to public safety. In theory, families use those reports to help choose colleges, and students consult the reports for safety’s sake. Each violation of the rules carries a penalty of $35,000, though Sen. Claire McCaskill, Democrat of Missouri, introduced a bill this summer to raise the fine to $150,000.

Experts on the Clery Act say reporting campus crimes involves a lot of detective work itself. A compliance officer has to track every incident on property controlled by the university, which could include, say, a remote, little-known storage facility rented by an academic department. If a municipal police report notes a crime on, say, the 2300 block of a street, the campus’s Clery officer has to determine if it happened in front of college property or down the block. The officer also has to translate crime reports from local or state code to the more complex federal Uniform Crime Reporting system.

Somewhere in that process, most colleges get it wrong, says Dolores A. Stafford, a former police chief at George Washington University who now runs a consulting firm specializing in Clery compliance.

At a deeper level, she wonders whether policy makers are really getting what they intended from the law, especially given the cost. She estimates that most colleges have to devote one or two full-time staff members and upward of $200,000 a year to comply with evolving Clery rules.

Those include a requirement for colleges to issue "timely warnings" to students and employees of any threat to their safety, and the Education Department has found some violations there. Notably, Eastern Michigan University got a hefty fine in 2007 for failing to notify the campus when a student was raped and murdered.

But most Clery compliance focuses on an annual report of crimes: 100-plus pages meant to inform students and employees of risks. When Ms. Stafford travels around the country, she asks administrators if they think that more than 10 people, outside of those who work on Clery compliance, read their colleges’ reports. Almost nobody says yes.

"It’s disheartening," she says. "I am not sure we wouldn’t be better off if we could publish a four-page summary, if we could guarantee that 90 percent of the students and faculty would read it." That would also free up officers to spend more time out in the community, she notes, preventing crimes in the first place.

Sam Houston State University recently devoted an officer to Clery full time. C. Aaron LeMay, the university’s controller, says that person is yet another noninstructional staff member, whom colleges have been hiring in droves.

"You want to know why our administrative costs are what they are?" asks Mr. LeMay, a lawyer who teaches courses on higher-education finance and governance. "It’s getting to the point where you are starting to see universities with a director of compliance, a director of internal audits, a general counsel, a director of risk management," he says. "There’s not a doubt in my mind that the growth in administration is at least in part due to additional regulatory burdens."

His burden lately is the 1098-T, a form the university must fill out and distribute to students, letting them claim a tax deduction based on tuition. But the form allows the university to report the amount of tuition either billed or paid, so it’s inconsistent, and it requires students’ tax-ID numbers, which students aren't required to provide, and the university has no way to verify. Mr. LeMay is mystified: Why is this even the university’s responsibility?

"That is a form that can be done away with and set up like every other deduction and credit," he says. "If I ask for a child-care credit, I have to show the bills or receipts."

But for now it’s his headache. Last year Sam Houston State got slapped with a $30,000 fine from the Internal Revenue Service because the tax IDs on the 2011 forms had been omitted. By the time the university had appealed the fine, and the IRS had decided that it didn’t have to pay, it had already submitted its 2012 forms. Those resulted in another $30,000 fine, for the same thing. Recently, when Mr. LeMay and other administrators were trying to figure out a way to gather and verify students’ tax-ID numbers, he looked around the table and calculated that the university was burning $1,000 an hour in the process.

Mr. LeMay never wanted to be a lawyer, so some people ask him why he bothered with a law degree. His answer: Given the landscape, it meant job security. "I saw the regulatory and legal requirements increasing for higher education," he says, "and I knew that to have this knowledge above and beyond a standard CPA would help in muddling through."

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4 Rules Colleges Say They Can’t Stand

State authorization
The Education Department asks colleges to make a "good-faith effort" to follow the rules of each state in which they want to offer distance-education programs. But dealing with bureaucracies in 50 states can be costly and complicated for colleges with multiple online programs. Some of the states’ requirements can also seem onerous. Minnesota, for example, requires a copy of the college’s articles of incorporation, bylaws, mission, and goals; state licenses from various agencies; a financial statement; copies of any marketing materials to be used in the state; the college’s plan for preserving student records according to a state statute; and more. In Massachusetts, colleges have to pay a $10,000 application fee, plus $2,000 for each degree offered.

Candles in dorm rooms
Colleges have to report their policies on candles in dormitory rooms, one of 60 disclosures required as part of campus security reports. Terry W. Hartle, senior vice president for government and public affairs at the American Council on Education and a member of the Senate task force reviewing college regulations, says this rule illustrates the minutiae that institutions have to deal with.

Constitution Day
Colleges must observe Constitution Day every September 17. Sen. Robert C. Byrd, the late West Virginia Democrat, included the requirement in a higher-education spending bill in 2004. Some college officials have said the day has been useful for "consciousness raising," but others have called it "intrusive," with "no academically relevant purpose."

Posting of syllabi
Colleges have to deal with state regulations as well as federal ones, and sometimes the state rules are among the most troublesome. That’s the case in Texas, for example, where a 2010 law requires colleges to post professors’ résumés and course syllabi online. Supporters of the rule say it promotes transparency. Critics say it is an intimidation tactic, aimed at informing conservatives about controversial topics discussed in classrooms. They point out that the law was modeled on a report published by a conservative think tank.