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wages to account for regional differences in earnings and cost of living; and develop a reliable methodology for risk adjusting institutional and program outcomes to more accurately reflect the value added of education programs (as opposed to their admissions selectivity).

Currently the Department of Education relies on graduation rates and average earnings as proxies for educational quality. Both of those outcomes, however, are highly dependent upon a student’s socioeconomic background, sex, family status, and other factors. Colleges and universities with selective admissions policies post the strongest outcomes, primarily because they admit mostly low-risk, traditional students. Open enrollment institutions post the weakest outcomes, largely because life is challenging and complicated for low-income and non-traditional students, who may be forced to drop out when a work schedule changes, a child needs more attention, or an unexpected repair or medical bill makes continuing impossible. Such confounding factors make it difficult to isolate the impact of educational quality versus socioeconomic factors on student outcomes. The Department of Health and Human Services faced similar challenges in trying to evaluate healthcare outcomes since social determinants of health result in worse health outcomes among those who are socioeconomically disadvantaged, have low educational attainment levels, have struggled with addiction, or have poor diet and exercise habits. Without risk adjustment of outcomes, hospitals treating wealthy patients will always appear to be delivering good care, and hospitals treating low-income patients will appear to be delivering poor care. Higher education outcomes data should be similarly

“risk adjusted” to more carefully isolate the impact of educational quality versus socioeconomic status and other factors on college outcomes.

Reform the Negotiated Rulemaking Process at ED

The U.S. Department of Education is required by statute" to engage in negotiated rulemaking prior to promulgating new regulations under Subchapter 1 of the Elementary and Secondary Education Act as well as Subchapters II (Teacher Quality Enhancements) and IV of the Higher Education Act of 1964 (Student Assistance). The purpose of negotiated rulemaking is to engage a committee of stakeholders early in the drafting of proposed regulations to ensure that the regulation can be implemented as written, to understand any potential unintended consequences, and to seek suggestions from stakeholders on alternative solutions. The goal is for the negotiators to reach a consensus, thus smoothing the way to promulgate a newrule.

Although it is helpful for the department to receive stakeholder input, the negotiated rulemaking process has become an expensive and time-consuming undertaking. Consensus is only rarely reached, enabling the department to pursue its own path. The department’s master calendar (which requires final rules to be