U.S. Senators Zero In on Higher Education Regulatory Costs

U.S. Senator Lamar Alexander (R-Tennessee), Chairman of the Senate Health, Education, Labor, and Pensions Committee, has committed to finishing a rewrite of the Higher Education Act by the end of 2015, vocalizing strong support of a plan backed by colleges and universities that would reduce the burden of federal regulation on higher education.

At a Senate hearing on Tuesday, Vanderbilt University President Nicholas Zeppos said that complying with current federal rules and regulations cost his university nearly $150 million each year, or 11 percent of the university’s total non-hospital expenditures.

That figure comes from a new report illustrating the “jungle of red tape” American colleges and universities operate within.  The study was commissioned by Sen. Alexander along with Sens. Richard Burr (R-North Carolina), Michael Bennet (D-Colorado) and Barbara Mikulski (D-Maryland) and reinforces Sen. Alexander’s optimism that there will be a bipartisan effort to shape the act’s reauthorization to benefit both higher education and the taxpayer by providing appropriate, but not excessive, oversight.

Legislators plan to use the report as a “blueprint” to the reauthorization of the Higher Education Act.

“I have talked with Secretary Duncan more than once about this effort, and he is eager to do his part to solve the problem. I look forward to working with him and with the President on eliminating unnecessary red tape, saving students money, and removing unnecessary regulatory obstacles to innovation in the best system of higher education in the world,” Alexander stated.

Federal Higher Education Act Reauthorization Proposals Released

US House and Senate Education Committee leaders recently released outlines of their plans to reauthorize the Higher Education Act, revealing an expected policy divide in approaches to reauthorization. House Republicans announced a focus on streamlining and consolidating federal student aid programs into “one grant, one loan, and one work-study program,” creating the “Flex Pell” to allow students to draw down grant funding outside the traditional academic schedule, addressing cost drivers of the Pell Grant Program, encouraging competency-based and online education, eliminating certain regulations affecting colleges, and preventing a government rating system for higher education.  House priorities can be viewed here.

Two Senate proposals also have been outlined—the Higher Education Affordability Act proposed by Senator Tom Harkin (D-IA) and the Financial Aid Simplification and Transparency Act (FAST Act) by Senators Lamar Alexander (R-TN) and Michael Bennet (D-CO).  Senator Harkin’s proposal calls for year-round Pell Grants, new federal accountability measures for colleges, increased consumer protection for student loan borrowers, and a State-Federal College Affordability Partnership to increase state investment in public higher education and lower tuition costs.  More information on Harkin’s proposal is available here.

Senators Alexander and Bennet’s proposal includes provisions aimed at simplifying federal financial aid processes, streamlining federal grant and loan programs, discouraging over-borrowing by tying the amount a student is authorized to borrow to enrollment status (e.g. full-time, part-time), simplifying repayments, and allowing the use of Pell Grants year-round.  The proposal would eliminate the FAFSA and instead create the “Student Aid Short Form,” requiring answers to the following two questions:  What is your family size? What was your household income two years ago?  Click here for more information.

We’ll keep you updated as these proposals make their way through the federal legislative process.  Check back soon for more information.

Alexander: Senate Should “Start From Scratch” on Higher Education Act

The U.S. Senate education committee today convened for the first in a series of hearings regarding the reauthorization of the Higher Education Act, which governs the majority of federal student aid programs.  The committee’s senior Republican, Sen. Lamar Alexander (R-Tenn.), said that Congress should “start from scratch” in reauthorizing the law.

“Let’s write a new law—repeal the old law and have new regulations written with our oversight, not as an ideological exercise but simply in the way that someone would weed a garden before planting a new crop,” Alexander said.

Sen. Alexander used his opening remarks to point to the University of Tennessee as a positive example in terms of both affordability and outcomes.

He impressed upon the committee his desire to continue to create “a true marketplace [for higher education] in which competition breeds excellence.”  But doing this, he stated, will require Congress to avoid setting price controls for tuition, issuing mandates for ways to cut college costs, creating prescriptive federal definitions of “quality,” and imposing “Washington micro-management” on research priorities at national laboratories and research universities.

Click on the video above to watch Sen. Alexander’s opening remarks, and stay tuned for more information on these hearings as they occur.

President Obama Announces Higher Education Plan

President Barack Obama announced Thursday a set of federal higher education proposals focusing on the issues of college performance, cost, affordability, and innovation.

According to a fact sheet released by The White House early Thursday morning, the President’s plan will connect student aid to college and university outcomes.   The President is directing the U.S. Department of Education to develop and publish a new college rating system focused on performance, which is intended to go live prior to the 2015 school year.  These ratings will compare colleges with similar missions and will be based on measures such as access, affordability, and outcomes.  By 2018, the President hopes to be able to allocate federal financial aid in part based on these college ratings—a change that would require legislative action on behalf of Congress.  The President announced the change as one of his goals for the upcoming reauthorization of the Higher Education Act.

The President has requested $1 billion in Race to the Top funding to spur higher education reforms in the states.  Noting the typical higher education funding model that allocates dollars based on enrollment rather than success at graduating students, the President specifically highlighted the State of Tennessee as a forward thinking exception to this general practice.  Tennessee changed its funding formula to focus on institutional outcomes via the Complete College Act of 2010.   Innovation will be a key competitive factor for colleges and universities under the President’s proposals, which cite recent innovations in higher education such as Massive Open Online Courses (MOOCs), hybrid classrooms, three-year accelerated degrees, competency-based learning, technologically advanced student services, and the ramping up of dual enrollment opportunities.  To assist colleges and universities with such innovation, the President has directed the Department of Education to issue regulatory waivers for “experimental sites” that promote high-quality, low-cost innovations in higher education.

The President will include in his legislative package incentives for enrolling and graduating Pell-eligible students, including a potential “Pell Bonus” for colleges based upon the number of Pell students they graduate.  The fact sheet makes clear that student accountability, too, is an area where the administration intends to propose legislation, perhaps making significant changes to current academic progress requirements for student aid programs.

Wrapping up his plan with a look at student debt, the President is proposing an expanded version of the existing income-driven repayment plan (commonly known as Pay as You Earn).  The average borrower in the United States now graduates with over $26,000 in debt.   In Tennessee, the average amount of undergraduate student debt at the time of graduation is lower, just under $20,000.  Lower still are the average debt levels for undergraduate students enrolled in the UT System, at roughly $17,000.  System-wide, approximately 53 percent of UT undergraduates have taken out loans, a figure well below the national average.

Although the federal Higher Education Act is up for reauthorization this year, it is unlikely that Congress will be able to address the legislation until 2015.  To watch the President’s remarks from Thursday morning, click on the embedded video below.