Top Public Policy Issues Facing Governing Boards in 2023–2024:
Monitoring increased regulations in a divided Congress.
With control of Congress split between a narrow Republican majority in the House and the Democrats’ slim edge in the Senate, Capitol Hill watchers at higher education associations in Washington have seen increased regulation and renewed and invigorated efforts to attach more strings to federal dollars. Some of the key issues on policymakers’ radars that boards should stay abreast of relate to endowments, Title IX, gainful employment, accreditation, intellectual property, and student outcomes.
Updated May 20, 2024.
Endowment Bills
Although most college endowments posted dramatically higher investment returns in 2021, according to the National Association of College and University Business Officers (NACUBO), that rise was followed by the stock market’s worst year since 2008. As a consequence, NACUBO’s endowment study for 2022 showed roughly a 4 percent decline in endowment market values.
Despite that decline, however, colleges and universities with large endowments continue to draw the attention of Republican lawmakers. Several bills were introduced in the 117th Congress that sought to increase the endowment excise tax passed as part of the 2017 Tax Cut and Jobs Act. Other bills would have required colleges with endowments of a certain size to limit tuition increases or devote substantial endowment funds to institutional student aid to avoid higher levels of taxation. Still other legislation has sought to prohibit investment of endowment assets in entities and governments deemed hostile to the United States, China foremost.
Some of these bills were reintroduced in the 118th Congress, and likely more proposals in this area will follow. Expect private institutions with the largest endowments to remain the chief targets. Some higher education advocates fear such a move could be a first step toward undermining the sector’s tax-exempt status.
Title IX
A half-century after the enactment of Title IX, the civil rights law that bars discrimination by sex in schools and colleges, the federal government is still wrestling with its scope and how to enforce it. Former President Trump pushed rule changes to “restore fairness” and provide due process rights to those accused of sexual harassment, whom he said often faced decks stacked against them by college bureaucrats. As a presidential candidate, Biden decried the Trump rules, saying they would “shame and silence survivors” of sexual abuse, and when Biden came into office, he immediately set out to undo the Trump changes.
In April 2024, the Biden administration released its final Title IX rule. The regulations permanently eliminate the federal requirement to conduct a live hearing requirement and expand the scope of the rule to focus on “sexual discrimination” broadly, rather than narrowly focusing only on “sexual harassment.” The upshot is a broader definition of sexual harassment and additional protections for LGBTQI+ students. When the proposed rule was first announced in 2022, Education Secretary Miguel Cardona said it would “ensure all our nation’s students—no matter where they live, who they are, or whom they love—can learn, grow, and thrive in school.” The proposal drew nearly 350,000 comments in the two-month window that was open to the public.
Immediately following the new rule’s publication, several state attorneys general and advocacy groups sued to stop the rule’s implementation. As of the publication date for this update, the judges overseeing these lawsuits have not issued any decisions. Regardless of any initial decisions, expect whichever side does not prevail to appeal, with the Supreme Court likely to be the ultimate decider of the rule’s fate. With the pending November election, should former President Trump recapture the presidency, a Trump administration would likely seek to reregulate on this issue regardless of the Supreme Court’s verdicts.
The April 2024 regulation did not include the Biden administration’s proposal on Title IX and athletics. The Department of Education is still processing that rule, with many thinking that the final version will not be published before the November elections.
Gainful Employment
The Biden administration reestablished the gainful employment rule for programs at career colleges and certificate programs at all other higher education institutions. The rule first went on the books in the Obama administration in 2015 but was withdrawn by Secretary of Education Betsy DeVos under the Trump administration in 2019. In addition to adopting the Obama administration’s requirements for programs to meet certain debt-to-earnings ratios or lose Title IV funding, the Biden rule would tie student aid eligibility to whether program completers are making as much money as high school graduates. From the beginning, the intent of the rule was to stop programs at for-profit career colleges and certificate programs at other colleges from saddling their students with large debt for low-paying careers. Recently, the Biden administration provided two additional months for colleges to submit initial program data to the Department of Education to comply with the rule.
Accreditation
In January, the Department of Education held the first of three negotiated rulemaking sessions focused on program integrity and institutional quality. Among the most significant changes to current regulations sought by the department are issues related to accreditation. In particular, the department has proposed changes that would require swifter action on the part of accreditors when dealing with institutions not in compliance with their standards; require accreditors to set “minimum expectations of performance” for each of their standards; and establish new criteria for institutions seeking to move to another accreditor. The final session of negotiations ended on March 7 without consensus.
The proposed changes to regulations related to moving accreditors follows guidance issued by the department in July 2022 defining what would constitute the law’s requirement that an institution demonstrate “reasonable cause” for changing its accreditation agency. The department said it would not allow an institution to change accreditation agencies “to lessen oversight or rigor, evade inquiries or sanctions, or the risk of inquiries or sanctions by its existing accrediting agency.” Antoinette Flores, a senior adviser at the department, wrote that the goal was to prevent “a race to the bottom” by institutions seeking looser accreditation standards.
The guidance was issued in response to a Florida law requiring state colleges and universities to switch accreditors every five years. Florida sued the department over its accreditation stance. North Carolina passed a similar bill in fall 2023. The outcomes of these efforts are worth watching and may portend similar legislation in other states in the future.
Intellectual Property and China
Also on the regulatory front, colleges and universities will be tasked with enforcing new CHIPS and Science Act rules to prevent the potential theft of high-tech intellectual property by China. The bipartisan bill, signed into law in August 2022, will funnel $280 billion to grow domestic semiconductor manufacturing and research to make the United States less reliant on foreign suppliers, especially China. The law requires the U.S. Secretary of Energy to “manage and mitigate research security risks” and impose penalties on funding recipients that violate protocols to prevent loss of U.S. intellectual property and safeguard national security.
Some provisions will steer CHIPS research grants to historically Black colleges and universities and other minority-serving institutions, as well as tribal colleges and community colleges. Senator Roger Wicker of Mississippi, the then top Republican on the Senate Committee on Commerce, Science, and Transportation, said the CHIPS Act includes “important research security guardrails,” including a training requirement for researchers to beware of “so-called malign foreign talent recruiting programs.”
It also requires universities’ applying for National Science Foundation (NSF) grants to disclose agreements and gifts from China and “other countries of concern,” and bars institutions with Confucius Institutes from getting NSF funding. More than 100 U.S. colleges and universities once hosted Confucius Institutes supported by China’s government to promote Chinese language and culture. That number rapidly shrank, however, after Congress prohibited host institutions from receiving U.S. Department of Defense funding due to charges of nefarious Chinese influence.
A National Academies of Sciences, Engineering, and Medicine panel recently recommended changes that would make it easier for institutions to get waivers from the U.S. Department of Defense, allowing them to again host a Confucius Institute. The National Academies experts said they were “not aware of any evidence at the unclassified level that (Confucius Institutes) were ever associated with espionage or intellectual property theft. While incidents affecting academic freedom, freedom of expression, and shared governance did take place, the most egregious of these happened at (institutes) outside of the United States.” It remains to be seen whether any colleges will seek to reopen institutes in this climate or whether China will want to keep supporting them.
If early discussions in Congress and the Biden administration are any indication, concerns about the Chinese Communist Party, the theft of intellectual property, propaganda, espionage, and undue influence will intensify over the next two years. Colleges and universities will need to proceed with caution.
Student Outcomes
The federal government is not alone in calling upon colleges to be more accountable and transparent; states are increasingly demanding that, as well. They are considering or have taken action to ensure that institutions aren’t obfuscating the costs of college for students and are being more forthcoming to students about the job prospects in their chosen fields. According to the nonprofit Data Quality Campaign, eight states—Arizona, Arkansas, Kansas, Kentucky, Maine, Tennessee, Virginia, and West Virginia—now require disclosures about student outcomes. In addition, seven more considered legislation in 2022—and are likely to consider it again in current legislative sessions—that would go beyond the federal College Scoreboard in reporting student indebtedness and post-college incomes by major. The Scorecard extrapolates data only from Pell Grant recipients.
The Biden administration also took action in this area, promulgating final rules on “fair value transparency.” The rule governs whether programs to which the gainful employment rule does not apply meet the gainful employment rule’s debt-to-earnings metrics. While no non-gainful employment programs would lose access to Title IV aid, the department will publish this information on a website starting in July 2026 and require students in certificate and graduate programs to acknowledge programs that fail these metrics in order for such students to receive federal student aid.
Questions for Boards
- In the context of accreditation and institutional quality, how well does our institution perform in graduating students in a timely fashion and helping them find gainful employment?
- Is the institution staying abreast of student completion rates and employment attainment rates and communicating that data clearly to its major constituencies, including legislators and other policy makers?
- Given that the Title IX regulations issued by the Trump administration are being revised by the Biden administration, how will our necessary administrative and legal processes be managed?
- What, if any, programs, research, contract, or grant support does our institution receive from China or Chinese entities? Are we confident that this support conforms to government and institutional policies on transparency, academic freedom, free expression, and the like?
