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

EWA Radio

Summer Story Ideas on the Education Beat
Tips for tapping national issues to fuel localized reporting
(EWA Radio: Episode 209)

School might be out, but that doesn’t mean education issues take a vacation: Two experienced education journalists offer compelling story ideas to beat the summertime blues. Delece Smith-Barrow of The Hechinger Report and Lauren Camera of U.S. News & World Report join this week’s podcast to discuss a wide range of national topics ripe for localized summer coverage.

Blog: Higher Ed Beat

Top 10 Higher Education Story Ideas for 2019-20
Inside Higher Ed's Scott Jaschik says admissions, free speech and rising graduation rates will make headlines.

While the hottest higher education story of early 2019 involved celebrities trying to bribe their kids’ way into elite colleges,  many other important stories are likely to make news in the 2019-20 academic year, according to Scott Jaschik, editor of Inside Higher Ed.

The veteran higher education journalist and editor listed the 10 topics he thinks every higher education reporter should be ready to cover in the coming months. 

Blog: Higher Ed Beat

Elections Have Consequences for Higher Ed

The 2018 midterm “blue wave” that split party control of the U.S. Congress and narrowed the Republican edge among governors to 27-23 will likely mean political battles over several higher education issues.

Latest News

If There Is a Free-Speech ‘Crisis’ on Campus, PEN America Says, Lawmakers Are Making It Worse

Free speech is being tested on college campuses by rising numbers of hate crimes and deepening racial tensions, according to a report released today by PEN America, a human-rights association of writers and editors. But the Trump administration’s warnings of a “crisis” overstate the problem, it says, and risk further polarizing colleges.

EWA Radio

What’s Betsy DeVos Up To?
School safety, student loans, and Title IX on front burner as U.S. Secretary of Education begins her third year
(EWA Radio: Episode 197)

U.S. Secretary of Education Betsy DeVos,  now one of President Trump’s longest-serving cabinet members, shows no signs she’s contemplating stepping down before the president’s first term ends. Alyson Klein of Education Week and Emily Wilkins of Bloomberg Government discuss regulatory rollbacks by the U.S. Department of Education on issues including how campus sexual assault claims are handled and consumer protections for student financial aid. They also explore the new political dynamics now that Democrats control the U.S. House of Representatives, with Rep. Bobby Scott chairing the Committee on Education and Labor.  What are the odds of Congress passing the long-overdue reauthorization of the Higher Education Act, for example? Plus, Klein and Wilkins identify hot topics that local reporters should keep on their radar, including ESSA implementation by states and whether a federal infrastructure package would provide money for school construction.

Seminar

72nd EWA National Seminar
Baltimore • May 6-8, 2019

EWA’s National Seminar is the largest annual gathering of journalists on the education beat. This year’s event in Baltimore, hosted by Johns Hopkins University’s School of Education, will explore an array of timely topics of interest to journalists from across the country, with a thematic focus on student success, safety, and well-being.

Seminar

Covering Higher Education’s New Political Landscape

A big increase in college student voter turnout helped flip the U.S. House of Representatives to Democratic control and elected scores of new state and local officials. Now, it’s clear that higher education will be shaped by—and will shape—the new political landscape of 2019.

To help journalists cover the impact of the midterms on education beyond high school, the Education Writers Association is holding a two-day intensive training seminar January 28-29 in Washington, D.C.

EWA Radio

It’s Not Just the Schools: Why Helping Families in Poverty Could Boost Students’ Test Scores
A review of research finds positive benefits to boosting family well-being
(EWA Radio: Episode 183)

In the debate over how to boost student achievement, especially among kids from low-income families, out-of-school factors are often cited as hurdles that even the best school-based programs and services can’t fully overcome. But what about programs that focus on lifting an entire family out of poverty?

EWA Radio

Want to Help Students in Poverty? Help Their Families, Too.
A review of research finds positive benefits to boosting family well-being
(EWA Radio: Episode 183)

In the debate over how to boost student achievement, especially among kids from low-income families, out-of-school factors are often cited as hurdles that even the best school-based programs and services can’t fully overcome. But what about programs that focus on lifting an entire family out of poverty?

Seminar

Higher Education Seminar Fall 2018
Las Vegas • UNLV • September 24-25, 2018

The Education Writers Association will hold its 2018 Higher Education Seminar Sept. 24-25 on the campus of the University of Nevada, Las Vegas.

The theme of this year’s intensive training event for journalists will be “Navigating Rapid Change.” This journalist-only event will offer two days of high-impact learning opportunities. The seminar will focus on how both postsecondary education and journalism are adjusting to an increasingly divisive political environment, the decline of traditional revenue sources, and continuing technological innovations that are upending much of the economy.

Blog: Higher Ed Beat

Top Higher Ed Stories for the 2018-19 Academic Year
Politics is driving some of the hottest news stories on college campuses.

Some of the most pressing higher education stories for the next academic year will spring from the intersection of education and politics, predicts Scott Jaschik, the editor of Inside Higher Ed.

Jaschik reprised his always-popular rundown of the top higher education story ideas during the Education Writers Association’s National Seminar in May.

Blog: Higher Ed Beat

How President Trump and the Republicans Are Changing Colleges
Impacts already being seen in admissions, student loans and for-profit colleges.

Even though a long-delayed update to a major higher education law appears to be stalled in the U.S. Senate, Republican policies are starting to influence colleges around the country because of orders and actions taken by the administration of President Donald Trump, according to a recent panel of Washington insiders and higher education leaders.

Speaking at the Education Writers Association’s 2018 National Seminar in May, the panelists highlighted three ways federal actions are affecting colleges around the country.

Key Coverage

Betsy Devos’s School Choice Ideas Are a Reality in Sweden, Where Student Performance Has Suffered

It was one of many tense moments at Education Secretary Betsy DeVos’ confirmation hearing this year. Sen. Tim Kaine, D-Va., repeatedly asked DeVos if she believed that all schools that receive public money, including private schools, should meet the same accountability standards. DeVos would not answer yes or no; she eventually began repeating, “I support accountability.”