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

Latest News

Colleges Worry About Implications of Religious Freedom Rule

Higher education lobbyists are concerned that colleges and universities could be disqualified from getting millions of dollars in federal grants under a draft Trump administration rule, which is aimed at increasing the legal rights of campus religious groups to be able to exclude gay students and others.

Colleges could face substantial penalties under the proposal, said Terry Hartle, the American Council on Education’s senior vice president for government and public affairs.

Latest News

Education Department Unveils Fix For Troubled Student Loan Forgiveness Program

Public servants with student loans were furious, and the U.S. Department of Education heard them. The department revealed Thursday that it will simplify the process for borrowers to apply for an expansion of the troubled Public Service Loan Forgiveness (PSLF) Program.

The move comes after a damning Government Accountability Office review, first reported by NPR. In that 2019 review, the federal watchdog found that during the expansion program’s first year, the department turned away 99% of applicants.

EWA Radio

Higher Education in 2020
Looming Supreme Court decision on DACA, new rules for college admissions, lead Associated Press’ reporter’s list
(EWA Radio: Episode 226)

While it’s a new calendar year, plenty of familiar issues are carrying over from 2019 on the higher education beat, says reporter Collin Binkley of The Associated Press. Many of the biggest headline-grabbers this year are likely to center on admissions – the process of deciding who gets into what college. To settle a federal anti-trust case, colleges recently scrapped old rules that limited what they could do to compete for applicants. Now, a potential admissions marketing free-for-all will create new winners and losers. The Trump Administration’s policies against immigration, and tensions with countries such as Iran can’t help but impact foreign students interested in studying in the U.S. And the growing trend by colleges to drop application requirements for ACT and SAT test scores could also mean big changes to college access.

EWA Radio

Teachers Fight for Student Loan Debt Relief
NPR investigation finds thousands of borrowers wrongly denied federal forgiveness
(EWA Radio: Episode 217)

Two federal programs intended to steer college students toward public service jobs like teaching in high-poverty schools instead became mired in missteps, as recipients found their grants wrongly converted into high-interest loans. Cory Turner of NPR’s education team spent 18 months looking at problems with the TEACH Grant program.

Seminar

73rd EWA National Seminar
Rosen Centre Hotel • Orlando
May 27-29, 2020

EWA’s National Seminar is the largest annual gathering of journalists on the education beat. This year’s event in Orlando will explore an array of timely topics of interest to journalists from across the country, with a thematic focus on with a thematic focus on the vital roles that education and journalism play in democratic societies.

Report

Free College 101
Georgetown Center on Education and the Workforce

The push for free college is a recognition that the most well-traveled economic path to good jobs and the middle class requires at least some college for the vast majority of young Americans. It is also a response to the reality that many students and their families are taking on large amounts of debt to finance increasingly pricey postsecondary educations.

Latest News

New SNAP Rule Impacts College Students by Limiting Benefits and Adding Confusion

Some low-income college students are among the 688,000 food stamp recipients projected to lose benefits as a result of a Trump administration rule announced Dec. 4. While the rule explicitly targets “able-bodied adults without dependents,” it also limits food assistance for a share of college students at a time when campuses across the country are grappling with how to respond to food insecurity.

Latest News

Education Secretary Betsy Devos Wants To Spin Off Federal Student Aid Office Into New Agency

Education Secretary Betsy DeVos said Tuesday the Federal Student Aid office — an arm of the Education Department she called an “untamed beast” in “distress” — should operate as a stand-alone entity.

The proposal follows a series of missteps involving the office that intensified scrutiny of DeVos’s leadership, including the release of $11 million in loans to unaccredited for-profit colleges and the violation of a court order to halt collections on former Corinthian Colleges students.

Latest News

Education Department Could Do More For Student Loan Borrowers With Disabilities

Denise had no idea her student loans could be erased. In 2007, a truck rear-ended her car. The accident ravaged her legs and back, and the pain made it impossible for her to work.

“I have basically been in pain — chronic pain — every day,” says Denise, who asked that NPR not use her full name to protect her privacy. “I live a life of going to doctors constantly.”

EWA Radio

If DACA Ends, What Happens to Students and Schools?
Final decision pending after U.S. Supreme Court heard oral arguments on program for undocumented children
(EWA Radio: Episode 138)

This week, the U.S. Supreme Court heard arguments in a case challenging President Trump’s decision to rescind the Deferred Action for Childhood Arrivals program (DACA). The program has temporarily protected some 800,000 immigrants who came to the U.S. illegally as children from being deported. While a key focus is college-age students who fear deportation, ending DACA has significant repercussions for the K-12 school community as well. In this 2017 episode of EWA Radio, soon after Trump announced his plans to unwind DACA, Corey Mitchell of Education Week and Katie Mangan of The Chronicle of Higher Education discussed the potential implications.

Blog: Higher Ed Beat

Many Political Battles Over Higher Education Boil Down to Money
Partisans dispute how, how much, or even whether, taxpayers should support colleges

The political fault lines of higher education extend far beyond headline-grabbing student protests and furor over controversial speakers.

In fact, that sound and fury often distracts from a more practical political issue facing higher education today: How should Americans pay for college? Should students themselves bear the full costs of their education or should taxpayers help keep costs low? And if so, how should the burden be apportioned between state and federal taxes?

Blog: Higher Ed Beat

Colleges Struggle to Adapt to Changing Demographics
More diverse student body poses challenges in admissions, teaching and counseling

Quick: Picture a “typical” college student. Are you envisioning a young person wearing a college sweatshirt, living in a dorm and attending school full time? 

Try again: Full-time students who live on campus account for less than 15 percent of all undergraduates, according to the National Center for Education Statistics.

At a recent Education Writers Association seminar, three experts on student demographics suggested that investigations into changes to the makeup of the nation’s undergraduate student body can spark fresh and impactful stories. 

EWA Radio

No Forgiveness: Teachers Struggle With Unfair Student Loan Debt
Two federal programs under scrutiny, as thousands of borrowers caught in administrative missteps
(EWA Radio: Episode 217)

Two federal programs that were supposed to steer college students to public service jobs like teaching in high-poverty schools instead became mired in missteps, as the recipients unexpectedly found their grants wrongly converted into high-interest loans. Cory Turner of NPR’s education team spent 18 months looking at problems with the TEACH Grant program, and his findings helped spur the U.S. Department of Education to reverse course.

Webinar

How the ‘Public Charge’ Ruling Could Affect Students in Your Coverage Area

How the ‘Public Charge’ Ruling Could Affect Students in Your Coverage Area

The Trump administration’s new plan to make it harder for immigrants receiving public benefits to receive green cards could have sweeping implications for students and schools. 

The Education Writers Association presented this webinar to help reporters with story ideas and provide resources for covering the educational impact of the recently announced ”public charge” rule.

Blog: The Educated Reporter

Word on the Beat: Busing
What reporters need to know about school desegregation efforts -- past and present

School segregation is a hot-button issue on the education beat. One strategy to address it, busing, has drawn widespread attention since a recent debate among Democratic presidential candidates.

In the latest installment of Word on the Beat, we explore what reporters need to know about campus reassignments to diversify schools — whether voluntary or mandatory – and how those efforts might impact students and communities.

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.