Uncertainty in Changing Times

By AGB    //    Volume 25,  Number 1   //    January/February 2017

The results of the November 2016 elections in the United States signaled significant changes in nearly every arena of our national life. Higher education—a keen focus of the Obama administration—finds itself on new ground. To talk about some of the implications, Trusteeship brought together a panel of experts after the election to discuss the issues.

Emily Dickens, former director of AGB’s Center for Public Trusteeship and Governance
Lezli Baskerville, president and CEO of the National Association for Equal Opportunity in Higher Education
Sandy Baum, economist, The Urban Institute
Paul J. LeBlanc, president, Southern New Hampshire University
Richard Novak, AGB senior fellow
Charles Pruitt, member, AGB board of directors

Emily Dickens: Our recent election was a surprise to many, and the agenda of our president-elect as it relates to higher education remains largely unknown. What do you think we can expect from the administration?

Richard Novak: The selection of Betsy DeVos as secretary of education is a big question mark, and a lot will depend on who the assistant secretary and other sub-cabinet people are. We won’t see this administration use the bully pulpit for higher education as the Obama administration did. And I don’t think we’ll see Congress and the White House meeting on degree attainment or sexual assault or any of the topics that the Obama administration cared about.

Paul J. LeBlanc: The reauthorization of the Higher Education Act will go through now with Republicans in control of both sides of Congress. I also suspect it will mean a much lighter regulatory touch than has been the case over the last eight years. There are probably lots of folks in the for-profit sector who are happy at that prospect. They have felt besieged and they have felt targeted. I think there will be some resurgence in that sector, perhaps. I suspect there will be an ongoing conversation about cost, though I don’t think it will be with anything remotely like the free college models that Hillary Clinton was debating with Bernie Sanders during the campaign.

Dickens: There’s been some speculation about getting rid of the Department of Education. How hard would that actually be, and what does the appointment of Mrs. DeVos bode for that department?

Sandy Baum: I think getting rid of the Department of Education would be extremely difficult. Of course, there has been mention of the federal government getting out of the business of student loans, which would then, of course, make it easier to get rid of the Department of Education, but that also would be very expensive. I think in the end that won’t happen. Certainly there will be a move towards things that are market-oriented, and so it remains to be seen where the diminishing of activity in the department will be, but I would certainly agree there will be less regulation, particularly of the for-profit industry.

Dickens: What are your thoughts about the “skin in the game” proposals that we’ve heard a lot about and that Donald Trump discussed briefly during the campaign?

Charles Pruitt: I think there is so much uncertainty about the intentions of an incoming administration on a whole range of questions, and that inevitably leads to projections as to what it all means and the direction in which he and his administration will go. We’ve certainly seen models across the country that he could go toward.

Trump could go toward a North Carolina/Wisconsin type model in which the public institutions in particular are put under a good deal of pressure to reduce costs and seek efficiencies. Or he could tack in a different direction. Given the absence of specifics during the campaign about his intentions, I agree with the others: His appointments will be critical, particularly in the undersecretary space, and I think also that congressional leadership is going to be important. The degree to which higher education does or does not become a part of an overarching vision, or whether it becomes something that the administration uses for concessions in exchange for progress on other issues, also needs to be considered.

Dickens: Let’s talk a little bit about financial aid and student debt. We don’t know where our president-elect stands on this, but we do have a Congress that is a one-party majority, and so what are your thoughts? We’ve got a Pell surplus. Does it stay with Pell or does it get spread around to pay for other things?

Baum: In terms of student debt, it’s not clear that Trump has given the subject much thought. But there is actually quite a bit of bipartisan agreement in Congress that we should change the student loan repayment system, and I think it’s possible that this would occur and that it could be a constructive change. There are a lot of questions about the cost of the income-driven repayment plan, and I can imagine the provisions of it changing quite a bit.

Novak: I suspect this administration is really going to defer to Congress. With Rep. Virginia Foxx (R-NC) as chair of the Workforce Committee in the House and Sen. Lamar Alexander (R-TN) as the chair of the Labor, Health and Human Services Subcommittee, on all of these major specific issues—lending, student debt, aid—the administration is going to defer to the Republicans in the House and Senate.

Dickens: Accreditation has become the topic of a lot of discussion. What do you think it will look like in the new Higher Education Act?

LeBlanc: My own bias on this is that we need forms of accreditation that are much more focused on outputs and outcomes, competencies, what students can actually do. It doesn’t mean that I would replace the traditional forms of accreditation that we have today, but I think those are very much focused on inputs and prescriptions for what education should look like, so they don’t always accommodate or serve the sorts of innovation agendas that many institutions seek. I hope we will see a broadened set of pathways for accreditation, such as the EQUIP Program [for low-income students], which this administration has created, and an attempt to try to stand up new models of quality assurance. I suspect that with the new administration and with Lamar Alexander’s guidance, we will see a continued critique of traditional accreditation.

Lezli Baskerville: I’m hoping that the administration will leave accreditation to the regional accrediting boards. The Obama administration seemed to be moving more and more toward pushing a lot of those decisions to Congress and to others who are not experts, who are not the regional agency that we have.

Dickens: The House Ways and Means and Senate Finance committees decided that they wanted to hold hearings on endowments and the charitable tax treatment of our institutions and its donors. What are your thoughts on this?

Novak: There is a high likelihood of some version of comprehensive tax reform and probably a tax cut, and I think endowments may be part of any final legislation. Members of the Ways and Means Committee, in particular, are arguing that college costs too much and endowment assets are not going to institutional aid to buy down tuition. I recall President-elect Trump saying something similar on the campaign trail, so it’s likely some effort to impose restrictions or penalties on endowments will be attempted, especially for the largest ones.

In terms of tax reform for charitable giving, it is very uncertain. Even if the charitable deduction survives tax reform, if income tax rates go down, as proposed in Speaker Paul Ryan’s 2016 blueprint—developed in the Ways and Means Committee— to rates similar to what President-elect Trump is suggesting—just three rates ranging from between maybe 10 percent and 33 percent—there is a real chance of a major hit for higher education in terms of charitable giving, because the tax advantages of giving, the dollar value, goes down any time the rates go down. You couple that with two other proposals that are in both Trump’s tax plan and the House plan—elimination of the estate tax and an increase in the standard deduction—and there will be fewer incentives for people of means to give to higher education. Roughly 30 percent of people itemize now, and that could go down to 10 percent, so any direct tax incentives are only for 10 percent of the population. Everyone else will be under the standard deduction, and so again, I think that’s a further disincentive for people of even modest means to give to their favorite charity, including higher education.

On the other hand, I think the administration and the Congressional tax committees might be open to some expansion or clarification on the American Opportunity Tax Credit, so there might be some tax benefits for families and for students there. But overall, I think it’s largely going to be negative.

Dickens: What do you see as the impact of the Trump administration on how our students feel and are taken care of on our campuses?

Pruitt: I worry for the DREAMers and for those young immigrants who have seen so much progress over the last four years. This is a subject on which Trump has obviously said a lot, at least during the campaign, about his thoughts regarding illegal immigration. From what I sense, in terms of talking with people on campus, that is a particular area of great anxiety and concern and worry for students across the country.

Novak: There’s a risk of real confrontation here between institutions and the federal government. Some institutions have signed a statement that they’re not going to enforce any federal law on identification and deportation. Cal State University, one of our largest public university systems in the country, has said campus police will not participate in identification and deportation of undocumented students, and they have thousands of undocumented immigrants enrolled there.

Baskerville: The Alliance for Equity in Higher Education led the fight on the Hill that resulted in passage of the DREAM Act, which was very important to all of our institutions, and especially Hispanic Serving Institutions. I fear slippage in that regard.

I fear that there’ll be slippage with a president who has indicated that he will have a no-tolerance, free-expression policy, a law-and-order person, if you will. Campuses have been the spawning ground for most, if not all, of the 20th- and 21st-century movements that have improved this nation and nations around the world, so I fear that there will be backsliding in that regard.

LeBlanc: We’re seeing, on my own campus, the impact among international students. Those who are here now are expressing their concerns and worries, and we’re hearing that from their families, but also prospective students. Also, I suspect we won’t see the same rigor of enforcement around Title IX and some of the other areas that have been high on the priority list for the Obama administration. These are all signals heading in the wrong direction, I’m afraid.

Baskerville: Trump has threatened to come in and overturn all of the regulations and executive orders that President Obama put in place. There’s a window of opportunity for him to do much of that, and so relative to Title IX sexual assault and sexual harassment regulations, that could be one of those that he would summarily set aside. It would be an easy thing to do, and that, of course, is frightening and would be deemed retrenchment in a very important area.

Dickens: Let’s talk about Historically Black Colleges and Universities (HBCUs), predominantly black institutions, minority-serving institutions (MSIs), and institutions with significant numbers of foreign students. How do you think they will be affected by the new administration?

Baskerville: We’re told by legislative directors for the majority of the 115th Congress that Donald Trump has sent signals that he may eliminate the mandatory portion of the Pell Grant and the Parent Plus Loan. We haven’t heard anything relative to the elimination of Title III or Title V yet, but we’re monitoring that closely as well. If Congress decides to make cuts, they will have a particularly adverse impact on underfunded institutions, those that are educating large numbers of low-income and first-generation students.

Dickens: If you picked one issue that we hadn’t talked about here that you’d like us to make sure people are aware of and thinking about, what would that be?

Baskerville: To the extent that Trump talked about the challenges within the black community and his desire to stimulate the economy in the most distressed areas in America during his campaign, there’s hope that this will create a tremendous opportunity for a partnership between HBCUs, MSIs, and the administration.

We see an opportunity for us to take our case for moving these institutions from the back burner to the front burner, to talk about the fact that HBCUs are graduating 60 percent of African-American health professionals, 42 percent of African Americans who go on to get advanced degrees in STEM, 50 percent of African- American teachers. All of these things, it seems to us, create the foundation for a partnership with the next administration in building up urban and rural areas of highest distress, the communities where our institutions are located.

Pruitt: I think that many in higher education today are probably feeling pretty worried, pretty concerned, somewhat disillusioned, and one of the challenges— and it’s a special challenge for boards going forward—is not to retreat and not to walk back and not to get into a defensive crouch, but in fact to engage even more going forward. Whatever your positions or postures are on these issues, it is absolutely critical that advocacy becomes more important to the entire higher education community going forward. We must also rethink how we do advocacy and how we talk about these issues, because it is clearly a very different set of actors that we are communicating to in Washington today than it was last year or the year before. How we talk about issues—like access for middle-income students and families, and making the American dream achievable— will connect with both the rhetoric and potentially the aspirations of the new administration. It is going to be really important if we’re going to preserve some of the things that have been achieved over the last decade or more, but also build on those going forward.

Novak: We didn’t really touch on research. Think of energy research. A lot is happening on our campuses, including some great demonstration projects that the Department of Energy runs on alternative energy. Those are probably gone. And the research dollars for many programs, be they medical research at NIH or research through the National Science Foundation, are going to be negatively affected. That really hurts the well-being and economic innovation, and part of it is a function of the federal deficit. We hear a lot about stimulus spending for the infrastructure, and that might be all to the good, but without a way to pay for it, it’s just going to add more downward pressure on discretionary spending. It is time for higher education to fulfill its societal role as a social critic, as a transmitter of the value of living in a liberal democracy and the responsibilities that entails for all of the students we educate. It is a critical time to talk about the value of higher education and an educated society.