In August, President Bush signed the Higher Education Opportunity Act into law and in doing so completed the reauthorization of the Higher Education Act. The six-year effort spanned three Congresses and required 14 short-term extensions of the underlying law to ensure that student-aid benefits would remain available while deliberations continued. The bill itself totals 1,158 pages, establishes roughly 70 new spending programs, and imposes more than 100 new reporting and record-keeping requirements on colleges and universities. Congress approved it overwhelmingly.
Most higher-education officials who followed the legislation greeted it with mixed emotions. On one hand, the bill includes several new provisions that enjoyed great support among college officials, and there was widespread agreement that the new regulatory burden to be imposed on institutions--while considerable--could have been worse. And, not to be discounted, there was a palpable sense of relief that the project was, at long last, finished.
But there are plenty of reasons to be disappointed in the final product. Barmak Nassirian, the associate executive director of the American Association of Collegiate Registrars and Admissions Officers (AACRAO), summarized one view of the bill as "...a laundry list of bad ideas, half-thoughts, and pet peeves masquerading as deliberative federal policy." For most institutions, the new bill's biggest impact will be a huge increase in federally imposed reporting and record-keeping requirements.
Boards and presidents, as a result, may be confronted with the need to expand administrative staffing, or at least administrative budgets, as campus officials work to comply with all the new reporting requirements. These additional costs will drive up the cost of attendance at some institutions, even as the law requires more public scrutiny of tuition increases.
Yet these new federal mandates are not simply a staffing or financial question. Failure to fully comply with the letter and spirit of the federal regulations can cause public embarrassment and/or create an assumption that an institution is "hiding" something. Either situation could easily create an unnecessary public-affairs headache for the institution. Boards and presidents must take care to ensure that one campus official is clearly responsible for the institution's compliance with whatever regulations stem from the new law.
Like all new federal laws, the statute is not self-executing. Responsibility for implementing this massive law now moves to the Department of Education, which must decide how to put all the new requirements in place. It will not be a small task. The department already has held a series of regional meetings to get campus perspectives on the new law. In the near future, they will convene a series of "negotiated rulemaking" and "technical review" panels that will bring together department staff and outside experts (including campus officials) to prepare draft regulatory packages on some of the most contentious issues in the act.
Sometime in 2009, the agency will publish draft regulations for public comment. Eventually--hopefully before this time next year--the department will publish final regulations that will describe in great detail what campuses must do. But before final rules are published, campuses will have ample opportunity to review and comment on them. Boards and presidents should ensure that their institutions do so.
Key Issues for Campuses
Perhaps the best way to describe this huge bill is by focusing on a handful of complex and controversial issues that are likely to have the biggest impact on campuses.
College Prices. Reducing increases in college tuition and fees was the most frequently expressed goal for reauthorization from the beginning of the process. The early proposals were draconian. In 2003, for example, Rep. Howard P. "Buck" McKeon (R-CA), then chair of the House of Representatives' committee with jurisdiction over reauthorization, proposed withholding federal aid from students at colleges whose tuitions increased faster than consumer prices.
That plan was soon abandoned, but the new law does require the Secretary of Education to produce lists every year that show which institutions of higher education (broken into nine categories) have the biggest percentage increases in tuition and fees and in net price. Colleges with the fastest increases will be required to prepare reports that describe why tuition went up and the actions being taken to contain increases.
This sounds like a simple proposition. However, when the American Council on Education attempted to simulate these lists using the tuition-and-fee data already collected by the Department of Education, our effort produced a different result than the simulation produced by the Congressional Research Service (CRS). Unlike ACE, the CRS had used comprehensive figures for some private institutions' costs, rather than just the tuition-and-fee figures sought in a draft version of the reauthorization. We also discovered some institutions had reported inaccurate figures to the Department of Education; simply by transposing numbers, some institutions erroneously wound up reporting much higher tuition than was accurate. Being placed on the federal government's college price "watch list" is likely to generate significant negative publicity. No college will want to find itself on it.
State Spending on Public Colleges. As the debate over college costs dragged on, many policymakers concentrated on the inescapable fact that cuts in state spending on higher education often lead to big tuition increases at public colleges and universities. To address this, the House proposed withholding federal student-aid funds in the Leveraging Educational Assistance Partnership (LEAP) program from students in states that reduced spending on public higher education.
Many public universities strongly supported the provision, thinking that it would force states to maintain financial support for higher education. But some key members of Congress, state legislators, and governors vigorously opposed the plan as an unwarranted intrusion on state budgeting. Others argued that the plan was unfair because it would reduce financial aid to low-income students simply because state officials did not do the right thing.
In the end, Congress approved a watered-down proposal. States that cut higher-education spending will be ineligible to compete for funds under a brand-new College Access Challenge Grant Program. Unless this program is funded in the future--which seems doubtful given the current size of the federal budget deficit--no state will ever lose money. But Congress has clearly focused attention on the relationship between state budget cuts and tuition increases and, therefore, has established a precedent that could lead to tougher action in the future.
Accreditation. Colleges must be accredited by an accrediting agency approved by the Department of Education in order for their students to receive federal student aid. In 2007, the department sought to expand its authority over accrediting agencies. The higher-education community vigorously protested the apparent effort to "federalize" this central part of American higher education.
The reauthorization act explicitly denies the Department of Education the authority to regulate the standards established by accrediting agencies. The law declares: "Nothing in this section shall be construed to permit the Secretary to establish any criteria that specifies, defines, or prescribes the standards that accrediting agencies or associations shall use to assess any institution's success with respect to student achievement." The law also eliminated and reshaped the advisory committee that the department had used to approve accrediting agencies--further demonstrating congressional unhappiness with the department's attempts to expand its control over accreditors. The act created a new advisory committee for this purpose whose members will be appointed by Congress and the Secretary of Education. The sharing of appointments--which was not the case in the past--further limits the department's ability to control the committee's decision making.
These clear, unambiguous limitations on the department's authority to shape academic standards amply demonstrate congressional unhappiness with the department's attempts to expand its control over accreditors. From the perspective of colleges and universities, these are among the most important provisions of the legislation.
Rules and Regulations. If the language on accreditation was the most positive feature of the bill, the wholesale imposition of new reporting, record-keeping, and regulatory requirements is its most negative outcome. Taken together, the act's new mandates constitute the single biggest increase in federal regulatory burdens imposed on colleges and universities since the first Higher Education Act was passed in 1965.
Consider the topics of just some of the new federal reporting and record-keeping requirements: fire safety, missing students, illegal peer-to-peer file sharing, textbooks and course schedules, readmission procedures for veterans, procedures for notifying the campus in an emergency, academic-dispute resolution, due process in accreditation, services for students with intellectual disabilities, lobbying, foreign gifts, alumni activities, and the calculation of net prices. In some cases, the new requirements largely duplicate or substantially overlap existing statutory requirements.
So extensive are the new requirements that it appears Congress simply added whatever new regulatory mandates were proposed by a member of Congress, regardless of necessity, desirability, cost, or complexity of compliance. It's a cliché to note that "to govern is to choose." Yet it's possible--as the 2008 reauthorization amply demonstrates--to govern without making any choices at all. Policymakers simply accept everything; bipartisan consensus is thus achieved, and the legislation is approved.
The end result, of course, is that institutions will face an enormous growth in their regulatory interactions with the Department of Education. Bales of new forms are inevitable. The chance for errors and honest mistakes grows. And, of course, administrative costs increase. It is the biggest irony of the reauthorization that a law that seeks to lower college prices includes a huge increase in the cost of doing business, a cost that will, inevitably, be passed on to consumers in the form of higher tuition.
Streamlined Access to Federal Student Aid. Simplifying the application process for federal student aid was a central goal of reauthorization. Most policymakers believe that the process of seeking student aid--which revolves around the Department of Education's Free Application for Federal Student Aid (FAFSA)--is too complex and, by itself, acts as a barrier to student aid. There is no doubting the complexity of the process--the five-page federal form contains almost 100 questions, three worksheets, and six pages of instructions.
The easiest way to simplify the form is by asking fewer questions. But doing this reduces the government's ability to obtain a complete, precise picture of a family's (or student's) income and assets and creates an incentive for clever financial planners to help well-to-do familes game the system. Moreover, asking fewer questions may force some states and institutions to require families to complete additional student-aid forms to govern the allocation of their resources. If a shorter federal application results in more state and institutional forms, families will be no further ahead. Simplification of student aid, it turns out, is a complex business.
The new law does take a number of steps that will simplify the application process. It requires the department to create a new two-page EZ-FAFSA, which will replace the current FAFSA for very low-income students. Congress also took steps to simplify the traditional full FAFSA, which will still be required of most students. For example, the new law encourages the Secretary of Education to reduce the number of questions posed to applicants by 50 percent over the next five years. It also streamlines the reapplication process by allowing applicants to submit certain updated data, rather than re-filing a new FAFSA each year.
The new law also directs the secretary to develop ways to provide students with an early estimate of their eligibility for financial aid. Finally, the new law creates a model financial-aid-offer form that institutions may use to inform students about student-aid awards in a simple and consumer-friendly manner.
Congressional officials have touted the simplification provisions, and the new law includes some important steps. But it's easy to overstate the results. The application process for federal student aid will continue to require most families to fill out a long and complex form.
New Federal Programs. Every reauthorization gives birth to new spending programs designed to address a specific need, and the 2008 bill is no exception. What is notable, however, is the sheer number of new programs that have been created--about 70, according to the latest tally. Once again, Congress seems to have accepted almost every idea presented for consideration and simply added it to the law.
New programs include: Partnership Grants for Pre-Baccalaureate Preparation of Teachers for Digital Content Providers, Loan Forgiveness for Civil Legal Assistance Attorneys, Off-Campus Community Service, Campus-based Digital Theft Prevention, Pilot Program for Course Material Rental, Loan Repayment for Prosecutors and Public Defenders, Teach to Reach grants, Adjunct Teacher Corps, and Demonstration Projects to Support Improved Access to Postsecondary Instructional Materials for Students with Print Disabilities.
In almost every case, the new programs lack widespread support and have a modest external constituency. In addition, almost all are discretionary programs (as opposed to entitlements), meaning that they will require specific funding from an appropriations bill in a future Congress. And the federal budget situation can only be called "dire." In August, the Administration's Office of Management and Budget announced that the federal budget deficit for fiscal 2009 (which began October 1) would be about $500 billion. In September, the Department of Education confirmed that the Pell Grant Program would need an extra $6 billion to serve all eligible students in the current academic year. And then there is the cost of the bailout measures to stabilize the financial markets. The bottom line is that the federal government is not likely to have much money to support new programs--no matter how worthy they might be.
What about Student Access?
The central goal of any reauthorization is to expand federal support for low-income students. The Higher Education Act was created to equalize access to postsecondary education for low-income students, and boosting college participation has remained a popular goal with elected officials. Higher-education advocates usually see reauthorization as a trade-off between efforts to boost students' participation in higher education and the inevitable expansion of federal regulatory control over colleges and universities.
Some parts of the new legislation may well increase college access for low-income students--including the efforts I've mentioned to streamline student-aid applications, as well as a new entitlement program (which means guaranteed funding) for Historically Black Colleges and Universities and Hispanic-Serving Institutions. Similarly, the new reauthorization will make it possible for low-income students to receive Pell Grants for the full academic year. Until now, Pell Grants were not available for students who wanted to study year round. But taken as a whole, this reauthorization, when compared with previous reauthorizations, is likely to have a very modest impact on college enrollments.
The reason is that the major avenues for boosting access to higher education--the Pell Grant and federal student-loan programs--were actually reauthorized in 2007 as part of the College Cost Reduction and Access Act (P.L. 110-84). Having made significant changes to these programs in 2007, Congress largely left them alone in 2008. Indeed, it may be that breaking this huge legislation into two smaller and somewhat more manageable pieces is what made it possible for Congress to finally finish reauthorization.
The 2007 act is easily overlooked in the wake of this year's massive Higher Education Act reauthorization, but it was exceptionally important. In the 2007 measure, Congress cut subsidies in the bank-based federal student loan program (known as the Federal Family Education Loan Program or FFELP) by $20 billion and reallocated those funds in ways that will clearly benefit students.
Most notably, Congress sliced the interest rate on federal student loans from 6.8 percent (in 2006) to 3.4 percent (by 2011); increased the amount of money that students can borrow in the low-interest federal student-loan program for the first time since 1992; and substantially increased funding for the Pell Grant program. Indeed, as a result of the 2007 measure, the maximum Pell Grant increased from $4,310 in 2007 to $4,731 in 2008.
In short, even if the 2008 reauthorization does relatively little to enhance student access, the new law should probably be seen as a single piece of legislation that was simply done in two separate parts. In that light, this Congress has taken important steps to help low-income students participate in higher education.
What Colleges and Universities Now Face
"Between the act and the reality," wrote T. S. Eliot, "falls the shadow." Between legislative action on the reauthorization and the reality of its impact on college campuses falls the shadow of implementation. The U.S. Department of Education now must turn the statutory requirements into rules and regulations. And although the agency is moving swiftly to hold regional meetings to solicit comments about the new law, the length and complexity of the legislation, coupled with new political leadership following the fall elections, means that the process will take years.
The challenge for each college campus will be to determine which of the act's many new requirements have the greatest impact on its functioning and then to organize itself to influence the regulatory process accordingly. This task will be more difficult than it has been in the past, in part because so many new requirements are being imposed. And the complexity will be increased because some campus units--like information technology--that heretofore have had little or no contact with the Department of Education, now will find themselves subject to federal regulation.
Boards of trustees can facilitate this effort by ensuring that their campus has developed a list of priority concerns that need to be addressed during the implementation process. The items on the lists will, of course, differ considerably from campus to campus. But the key to influencing the outcome is to define precisely which issues are of greatest concern and then take appropriate action. Additionally, boards can and should use the new burden as a chance to educate Congressmen and Senators about the cost and complexity of federal regulations and the way that decisions made in a vacuum in Washington, D.C., affect the tuition bills that students and families face.
Like Lewis Carroll's disappearing Cheshire cat, reauthorization as a single piece of legislation will soon fade away. But like the cat's grin, the many specific burdens, responsibilities, challenges, problems, and opportunities created by the law will remain perfectly visible. And each will take on a life of its own as the Department of Education breaks the bill into hundreds of smaller pieces and sets about making it work.
