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

What’s the Price of High-Quality Child Care for All Kids?

Taryn Morrissey recalls that when she had her first child several years ago, “I knew how expensive it was going to be.” Morrissey is, after all, an associate professor at American University who studies child-care policy. Then she started shopping for child-care centers and got hit with sticker shock.

“It’s REALLY expensive,” she said with a laugh.

Blog: Higher Ed Beat

How to Navigate Privacy Laws When Reporting

“How many people are here in some part because you’ve made a request for a record and gotten the FERPA answer?” asked Frank LoMonte, an expert in the federal privacy law, to a roomful of education reporters at a recent conference.

Nearly all in attendance raised their hands.

“That’s why my phone rings 2,000 times a year,” said LoMonte during the Education Writers Association’s 2017 National Seminar in Washington, D.C.

EWA Radio

When Students Attend White-Supremacy Rallies, How Should Colleges Respond?
EWA Radio: Episode 136

In the aftermath of the white supremacy gathering in Charlottesville, Va., some universities are under pressure to take action against students who attend rallies organized by hate groups. Nick Roll of Inside Higher Ed discusses the situation and how postsecondary institutions are responding. How do universities balance respect for free speech with concerns about cultivating an inclusive campus environment?

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.

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.

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.

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?

Blog: The Educated Reporter

Trump Budget Signals Education Priorities

President Donald Trump’s first budget blueprint begins to flesh out the areas in which he sees an important federal role in education — most notably expanding school choice — and those he doesn’t. At the same time, it raises questions about the fate of big-ticket items, including aid to improve teacher quality and support after-school programs. 

Blog: Higher Ed Beat

Would Free College Lead to Too Many Graduates?

The presidential election pushed grassroots proposals to make public college free into the mainstream. But should these plans stay there? And if so, in what form, now that the most prominent supporters of those proposals lost the race for the White House?

EWA Radio

Betsy DeVos Is Secretary of Education. Now What?
EWA Radio: Episode 108

Betsy DeVos takes the oath of office.

Kimberly Hefling of Politico discusses the new U.S. secretary of education, Betsy DeVos, who was confirmed Tuesday after Vice President Mike Pence was called in to break a 50-50 tie in the Senate. What will be her top priorities moving forward? How aggressively will the new secretary push school choice, and how likely is President Trump’s $20 billion school choice plan to gain traction? Has DeVos lost political capital during the bruising confirmation process? Was she held to a higher standard than other nominees for President Trump’s cabinet? And how much power will the Republican mega-donor have to roll back the Obama administration’s education policies and initiatives? 

Multimedia

New President, New Higher Education Agenda
Doing More With Higher Ed Data

During his time in office, President Obama substantially altered the landscape of postsecondary education, from making the federal government the direct lender of student loans to changing the climate for how colleges address allegations of sexual assault. Journalists who cover federal policy on higher education offer insights and story ideas about issues to track, from the regulation of for-profit colleges to the reauthorization of the Higher Education Act.

Report

Fewer Borrowers Are Repaying Their Loans Than Previously Thought
New America

Today, the US Department of Education announced a critical error in the way it had previously been calculating repayment rates across the more than 4,150 institutions that receive federal loans each year. A coding error meant that many borrowers were incorrectly considered to be paying down their loans when in fact they were not making principal payments. As a result, many schools’ repayment rates are on average a third lower than originally reported.

Report

Fewer Borrowers Are Repaying Their Loans Than Previously Thought
New America

Today, the US Department of Education announced a critical error in the way it had previously been calculating repayment rates across the more than 4,150 institutions that receive federal loans each year. A coding error meant that many borrowers were incorrectly considered to be paying down their loans when in fact they were not making principal payments. As a result, many schools’ repayment rates are on average a third lower than originally reported.