Federal Policy & Reform

Overview

Federal Policy & Reform

The federal government provides billions of dollars in student aid and tax breaks to the nation’s colleges and universities each year, and it demands remarkably little in return.

The federal government provides billions of dollars in student aid and tax breaks to the nation’s colleges and universities each year, and it demands remarkably little in return.

In large part, that’s because the federal government has relatively few levers with which to hold colleges accountable. Unlike in K-12 education, where federal dollars flow through states to schools, most postsecondary aid goes directly to students, in the form of vouchers (Pell grants), loans, and tax benefits. To withhold money from an institution, the federal government effectively would have to punish its students as well.

The comparatively weak federal accountability levers in higher education are also a testament to the strength of the college lobby, which employed more lobbyists in 2014 than any other industry except electronics manufacturing and pharmaceuticals, according to the Center for Responsive Politics. With colleges in every congressional district, and millions of faculty and staff on voter rolls, college lobbyists have repeatedly beaten back efforts to link federal dollars to student outcomes and college costs.

Federal involvement in higher education goes back to the Morrill Act of 1862, which provided land to states to finance the creation of a system of agricultural colleges, known as “land grant” institutions. The federal role grew in the 1940’s and 1950’s, with passage of the GI Bill — which provided generous tuition benefits to veterans — and the National Defense Education Act, which created the first student-loan program.

But the real watershed was passage of the Higher Education Act, a 1965 law that laid the foundation for the modern student-aid system. The law, which created a system of grants and loans to help  students from low-income backgrounds pay for college, firmly established the federal role in ensuring equal access to higher education. In the years since, lawmakers have extended the bill’s benefits to middle- and upper-income students, providing unsubsidized loans and tax benefits to offset rising college costs.  

To qualify to award federal financial aid to students, institutions must show that they are financially “responsible” and administratively “capable,”  and have been approved by an accreditor and state regulators. Colleges can lose their eligibility if their state or accreditor revokes their approval, or if too many of their students default on their debt, but those conditions rarely happen. For-profit colleges can be kicked out of the programs if too much of their revenue comes from federal aid, but that, too, is uncommon.

Fifty years after the passage of the Higher Education Act, the government awards about $150 billion a year in grants, work-study, and loans to more than 15 million students. Policymakers and the public generally agree that the federal government should continue to make college accessible to all Americans.

Yet as college tuitions have risen, and student debt has skyrocketed, some lawmakers have questioned whether that federal aid may be fueling tuition growth — a theory known as the “Bennett Hypothesis,” which has been widely disputed in research. Others point to rising student loan defaults and lackluster graduation rates and ask why the government isn’t demanding more for the billions that it provides in student aid.

In fact, policymakers have tried to impose cost controls on colleges and condition small amounts of federal aid on student outcomes. But they have faced fierce opposition from colleges, who have branded such efforts “overreach” and accused lawmakers of intruding on academic affairs. In the end, most of the would-be reformers have had to settle for more “transparency” around college costs and student outcomes.

President Obama used both carrots and sticks to pressure colleges to lower their costs and graduate more students. He didn’t always succeed: His plan to reward high-performing colleges with additional Perkins loans went no where, and his controversial college “ratings” plan was reduced to a revamped “College Scorecard.” Still, Obama managed to tie aid to for-profit colleges to their graduates’ debt burdens, and to shine a spotlight on institutions with weak student earnings and low loan repayment rates.

At the same time, Obama sought to make applying for student aid easier and repaying student debt less difficult. He took steps to simplify the Free Application for Federal Student Aid, or FAFSA, and expanded income-based repayment for student loans. Congress might continue these efforts in the upcoming reauthorization of the Higher Education Act, which is expected to focus on streamlining and simplifying the student aid and loan repayment systems. 

Lawmakers might also look to reform accreditation and increase college accountability, giving institutions more “skin in the game,” i.e., responsibility for their students’ abilities to pay back their student loans.

What the federal role in higher education will look like going forward will depend, in part, on who is elected president next November. On the campaign trail, Democrats are pledging to make college free — or at least debt-free — while Republicans are promising to bring down the cost of college through new technology and alternative credentialing.

Published: January 2016

Blog: The Educated Reporter

A Reality Check on Secretary DeVos’ School Choice Agenda

The Trump administration has big ambitions to ramp up school choice — both public and private — but those desires have quickly bumped up against political reality. Will the president and Secretary of Education Betsy DeVos deliver? It remains to be seen, though speakers on a recent EWA panel expressed some skepticism.

EWA Radio

‘Eddie Prize’ Winner Kelly Field: Reporting on Native American Students
EWA Radio: Episode 134

Journalist Kelly Field recently won a top honor at EWA’s National Seminar for her compelling series, “From the Reservation to College,” on the education of Native American students. Field’s coverage for The Chronicle of Higher Education — supported by an EWA Reporting Fellowship — follows several students from the Blackfeet Indian reservation in Montana. Their experiences highlight the significant educational challenges facing Native communities in the U.S. today.

Latest News

Justice Dept. Plan To Attack Colleges’ Race Preferences Stirs Concerns

Education advocates are reacting with dismay to a report that President Donald Trump’s administration is recruiting lawyers within the U.S. Department of Justice for an initiative to investigate and potentially sue colleges and universities over racial preferences in admissions that discriminate against white applicants.

Latest News

Affirmative Action Battle Has A New Focus: Asian-Americans

By most standards, Austin Jia holds an enviable position. A rising sophomore at Duke, Mr. Jia attends one of the top universities in the country, setting him up for success.

But with his high G.P.A., nearly perfect SAT score and activities — debate team, tennis captain and state orchestra — Mr. Jia believes he should have had a fair shot at Harvard, Princeton, Columbia and the University of Pennsylvania. Those Ivy League colleges rejected him after he applied in the fall of 2015.

Latest News

Black Colleges Still Waiting

The White House today marked a milestone in leadership on historically black colleges and universities, although probably not the kind President Trump had in mind when he promised in February that support of those institutions would be an “absolute priority.”

A new administration hasn’t made it to August without having named a leader of the White House Initiative on Historically Black Colleges and Universities since that office was launched under President Carter. But Trump has not named a leader for the office.

Latest News

Former Top Official In Obama’s Education Dept. Is Named President Of ACE


Ted Mitchell, a top U.S. Department of Education official during the Obama administration and an architect of several of the college and student-loan accountability regulations the Trump administration is now trying to dismantle, was named on Thursday as the new president of the American Council on Education.

Mr. Mitchell said countering the “narrative that college doesn’t matter anymore for individuals and society” would be among his highest priorities for the organization, which represents about 1,800 college presidents on national policy issues.

Latest News

Education Department Derided, Praised For Student Loan Protection ‘Pause’

WASHINGTON — The U.S. Department of Education drew both scorn and praise Monday at a public hearing on its plans to revamp two Obama-era rules meant to protect students from shady schools that leave them saddled with debt and no viable way to pay it off.

Barmak Nassirian is director of federal policy for the American Association of State Colleges and Universities.

Latest News

Support Builds for Expanding Pell Eligibility to Short-term Certificates

Under current law, the major federal grants for low-income students cannot be used to pay for academic programs that are shorter than 600 clock hours or 15 weeks in length. But a bill introduced in January by Senator Rob Portman, an Ohio Republican, and Senator Tim Kaine, a Virginia Democrat, would expand Pell eligibility to shorter job-training programs, with a minimum cutoff of 150 clock hours of instruction time over a period of at least eight weeks.

Latest News

How Higher Ed Would Feel Medicaid Cuts

When states began opting in to Medicaid expansion after the passage of the Affordable Care Act, among the beneficiaries were the teaching hospitals that train doctors and nurses and serve a disproportionate share of low-income patients.

EWA Radio

No Relief: Who’s Holding Student Loan Debt Companies Accountable?
EWA Radio: Episode 128

A new investigation by NerdWallet’s public-interest journalism team focuses on student loan debt-relief companies that promise consumers savvy fiscal help but too often do little to actually lighten their load — and, in some cases, actually increase borrowers’ financial burdens. Reporters Richard Read and Teddy Nykiel discuss who is — and isn’t — holding these companies accountable. What would need to change at the state and federal levels to improve consumer protections?

EWA Radio

Betsy DeVos Goes From Ideas to Action
EWA Radio: Episode 127

Alyson Klein of Education Week and Andrew Kreighbaum of Inside Higher Ed discuss recent developments on the federal policy front, and what’s been a busy month for  U.S. Secretary of Education Betsy DeVos. The Education Department has hit the “pause button” on regulations aimed at reining in for-profit colleges, announced plans to scale back civil rights investigations, and suggested federal scrutiny of state accountability plans for K-12 education could be more forceful than some people — particularly Republicans — were expecting.

Latest News

When student journalists need defending, these lawyers swoop in. For free.

In recent months, millions of dollars in donations have rained down upon journalism organizations, prompted by President Trump’s verbal attacks on the news media and citizen support for the press’s role in America’s democracy. That’s been great news for worthy recipients such as the Committee to Protect Journalists, the Reporters Committee for Freedom of the Press, ProPublica and others. But one tiny outfit, working out of a windowless Washington office, has not benefited.

EWA Radio

NPR Digs Deep on School Vouchers
EWA Radio: Episode 125

Cory Turner discusses the NPR education team’s deep dive into school vouchers, with a focus on Indiana, home to the largest voucher program in the nation. Among NPR’s findings: less than 1 percent of participating students transferred out of public schools that had been labeled by the state as low performers, and many students using vouchers were already attending private schools. With school choice as a centerpiece to President Trump’s education policy agenda, what does the evidence show when it comes to academic outcomes for students using vouchers?

Blog: Higher Ed Beat

Fear and Loathing in Higher Education: No One Knows What Trump’s College Agenda Looks Like

Confusion and uncertainty. Gridlock and disagreement.

Sound familiar?

No, we’re not just talking about the political machinations on Capitol Hill. It’s also a pretty good characterization of the discussion on “The Changing Politics of Higher Education” at the 2017 Education Writers Association seminar at Georgetown University.

Member Stories

May 19 – 25
Here's what we're reading by EWA members this week

Jennifer Pignolet of the Commercial Appeal checks on the closure of an AmeriCorps program called City Year in Memphis, which is wrapping up a pilot year at Brownsville and Westside Achievement Middle, a state-run school in Frayser. 

 
 

EWA Radio

A Reality Check on Trump’s Education Budget
EWA Radio: Episode 123

Emma Brown of The Washington Post discusses President Trump’s budget proposal for education, with fresh analysis of the priorities and politics behind the line items. She also explains the prospects in the GOP-led Congress for the Trump plan. Overall, the president’s budget envisions deep cuts to the U.S. Department of Education budget, even as he wants to step up federal aid for school choice.  Which education programs are up for major cuts or outright elimination and why? How do some of the largest programs, like Title I aid for disadvantaged students and Pell grants, fare?