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Memo To: From: Subject: Date: Interested Colleagues Barmak Nassirian Unit-Record, FERPA, SLDS February 12, 2013

Ive had conversations with some of you about the stalemate we have collectively created on the related topics of educational privacy, legitimate access to data, and compliance burdens on institutions. I thought Id write a quick summary of where I believe we are, and propose a re-examination of policy options in search of a compromise that might address the needs and concerns of the various parties to the debate. As you recall, back in 2004, when NCES launched a formal inquiry into replacing several IPEDS surveys with a federal unit-record data collection alternative, I was quite willing to consider their ideas, provided that the proposed system include meaningful privacy protection for students. Other colleagues were irrevocably opposed to the very concept on absolutist privacy grounds, or because they believed that student-level data collection would be even more burdensome for institutions than IPEDS, and/or because they viewed the effort as a threat to institutional autonomy. On the other side of the debate, state and federal policymakers, researchers, and accountability advocates were adamant in their demand for much greater access to student-level data, which they viewed as indispensible for arriving at some of the most basic facts about outcomes and for better higher education policy. Hours of discussion can be had around any of these beliefs and demands, none of which will prove to have been absolutely correct, but I will resist the temptation to start that here. In 2005, before the ink on the NCES report (Feasibility of a Student Unit Record System Within IPEDS) was dry, Congress intervened to stop the controversy by adopting the Foxx Amendment in the House version of the HEA reauthorization bill (HR 609) then under consideration. Despite this decisive message from the (Republican-controlled) House, the Commission on the Future of Higher Education, appointed by Secretary Spellings endorsed a federal unit-record system in 2006, and the Secretary herself signaled some interested in creating such a federal database. The matter seemed to have been settled when (a Democratically-controlled) Congress finally passed the Higher Education Opportunity Act of 2008 to reauthorize the HEA. The bill included the original Foxx ban on a federal data system, but modified it with what would prove to be consequential language (through an amendment offered by then-Rep. Heath Shuler, D-NC) that explicitly excluded any state systems from the Foxx prohibition. The Shuler Amendment was not seen as particularly problematic at the time, because the states were viewed as unlikely to come up with the resources to go beyond the handful of nascent data systems sponsored by the Feds since 2005 and because it required any state data collections to fully comply with FERPA, whose settled legal interpretation posed insurmountable privacy challenges to state access to the educational records in question. It is fair to say that those opposed to the unit-record data system declared victory and moved on to other issues. But, as with every thing else in Washington, no victory is permanent, and this one was more short-lived than most. In very rapid order, ARRA dumped $500 million of federal money into

the pre-existing State Longitudinal Data System (SLDS) grant program early in 2009, and the Department issued final regulations later that year (State Fiscal Stabilization Fund, Interim Final Rule, November 2009) that declared all non-consensual releases of non-directory information to SLDS to be FERPA-compliant. The combination of these two developmentsmassive federal funding and regulatory removal of FERPA barrierswere an astonishing reversal of fortunes for the advocates of unit-record data, who certainly looked like they had pulled an amazing come-from-behind win. And, if there were any doubts about who had the upper hand, the Department proceeded to eliminate FERPA as a threat to unfettered collection, warehousing, and sharing of educational data by promulgating what I continue to view as lamentable FERPA regulations in December 2011 that (unnecessarily and preemptively) eviscerated educational privacy. While it may be tempting to believe that the matter has now been settled in favor of unitrecord advocates, the truth is that the various sides have managed to inflict mortal damage to their opponents policy priorities, but without accomplishing their own substantive goals. The pro-unit-record groups have, for example, managed to undermine educational privacy, but they are no closer to actually obtaining national data than before the expenditure of millions of dollars since 2005. Indeed, it would behoove the advocates of unit-record data to contemplate the Balkanized data environment they have been backed into creating in lieu of a national data system. I, for one, dont believe that the obscenely over-priced SLDS will prove sustainable over time (i.e., when 100% federal funding runs out) or that they will ever be sufficiently interoperable as to provide the most basic universe data, such as unduplicated enrollments, transfers, or cross-border distance education statistics. The decentralization of what should have been a singular centralized data system has certainly cost plenty of time and money. But even more damaging to the cause of better data is the unintended creation of a powerful political lobbythe current SLDS granteesto any future federal data system that might derail their gravy train. For an example of a very similar federal-state partnerships from the recent past, one need look no further than the history of guaranteed student loans and the rent-seeking behavior of state-affiliated guaranty agencies and secondary markets, whose self-interest consistently trumped the public purposes which they theoretically served. Once the SLDS take root, their primary missioni.e, selfpreservationwill prove an insurmountable obstacle to better national data, which they will continue to promise and never deliver. If this is winning, one wonders what losing looks like! Not that the privacy crowd (with whom I identify) has done much better. Blocking the creation of a national unit-record data system might have prevented direct federal access to all records, but it also created irresistible pressure for circuitous access to the same data through far less capable state agencies. The fragmented patchwork of SLDS, with their appalling privacy practices, their lack of transparency and public accountability, and their questionable information and security practices are doing much more damage to educational privacy than a federal system ever could. Any federal data system designed and managed by the NCES would have vastly better privacy and security characteristics than the best SLDS. In addition, instead of the opaque and arbitrary process by which the various states are selecting data elements for collection, virtually every feature of a federal system would be defined through the standard NCES TRP process. And the damage to educational privacy and privacy rights doesnt stop with the SLDS. The Administrations unfortunate decision to needlessly mutilate FERPA through the December 2011 regulations compound the harm that will certainly be caused by the SLDS. In their zeal

to promote data quality, reform advocates and the Administration have created a data freefor-all in which even entities other than SLDS can now assert a theory under which they may access (and redisclose) information from educational records. Finally, those concerned about institutional compliance burdens and institutional autonomy have to admit that institutions are increasingly worse off as they are required to provide ever expansive disclosures and as IPEDS surveys get longer and more complex in roundabout attempts to get at metrics that a unit record system would much more efficiently produce. In many ways, institutions have ended up with the worst of all possible worlds, one in which many of them now have both unit-record and IPEDS reporting, when the initial impetus for a federal unit-record system was to trade unit-records for several IPEDS surveys. In reviewing these developments, it seems to me like all parties might do well to reconsider their historical positions. I continue to have misgivings about predictable abuses of any unitrecord database, but have come to believe that a properly configured federal data system would be a less costly, more efficient, less burdensome, and more responsible alternative to SLDS and the unfortunate regulatory reframing of FERPA that the other side of this debate has wrought. It could be worthwhile for the parties to come together to see if a more coherent policy environment might be in everybodys best interest. Such an environment would be one in which the community as a whole would seek to have the congressional ban replaced with an authorization of a federal data system with explicit legislative guidance on such central issues as notice, consent, access, etc (perhaps through the affirmative application of the Privacy Act to the system). The trade-off would be to cut off future funding to SLDS, and instead allow the states to access the federal system for specified and appropriate purposes. (An expansive and robust federal data system will cost far less than we have already spent on SLDS, let alone the hundreds of millions more that they will continue to consume prospectively.) In addition, the FERPA provisions of the 2009 SFSF and much of the 2011 FERPA regulations would have to be either withdrawn or legislatively blocked, perhaps to be replaced by more artful regulatory changes that address real issues without doing foundational violence to privacy rights. Finally, new authorizing language, conceptually framed around the Wyden-Rubio legislation, would substitute mandatory data submissions to the federal system for certain current IPEDS surveys as well as a number of required disclosures under the HEA, providing relief from the compliance burden by ensuring direct federal access to the underlying data. A consensus package with these elements would provide responsible access to data, protect privacy rights, and reduce institutional burdens better than going along the trajectory were on, and it would cost less too! I believe we have a narrow window to act and that it would take a broad coalition for this to have a chance.