Reauthorizing the HEA and the Need to Rebalance Funding

Washington -- Another Congressional reauthorization of the Higher Education Act is upon us and I find myself in rare agreement with Senator Lamar Alexander, chairman of the Senate committee of jurisdiction, on two issues. One is the overdue simplification of the form that students use to apply for financial aid; the other is the need to reduce federal higher education regulations.

Republican Senator Alexander is right in joining with Democratic Senator Michael Bennett in a bipartisan effort to trim down the number of questions asked of aid applicants. The so-called FAFSA form is so complicated it scares many students and families away from postsecondary education. The main opponents of this needed change are states and institutions, which have successfully lobbied the federal goverment over the years to include their own questions in the federal form. They now threaten that if the federal form is simplified, they will separately start collecting much more data about applicants themselves with their own forms, making a bad situation even worse.

What has been left out of this discussion is why states and institutions need so much information. If the assumption is that states and institutions simply want to target their own aid to the truly financially needy, someone hasn't been paying attention. One of the reasons states and institutions desire detailed information is to know more about students and families than the students and families know about them. Students and families must reveal much about themselves while institutions are free to manipulate the information behind closed doors, often to the disadvantage of the financially needy. The irony is that the federal form, as it currently exists, gives states and institutions information on how to undermine the very federal programs that are supposed to be helping the students.

It is high time for Senators Alexander and Bennett to understand more fully why their simplification proposal (or something like it) is fundamentally sound, and to challenge those who would keep on collecting information that in practice is used too often for dubious ends.

The other issue on which I agree with Senator Alexander (and Democratic Senator Barbara Mikulski, among others), is the need to rein in the regulation-happy U.S. Department of Education. There are altogether too many higher education regulations and there are too many Department officials who think the answer to every problem is a new regulation.

But what once again has been left out of the discussion is why there are so many regulations to start with. It is partly because Congress itself has used program structures in higher education legislation which invite abuse, which then invites regulation. Because Congress itself has also loaded up its already vulnerable programs with issue-of-the-moment hobby horses, even more regulation ensues.

In 1965 and 1972, Congress set up the framework for federal higher education assistance with a variety of institutional and student aid programs. Soon thereafter, Congress chose to prefer student aid over institutional aid (making higher education access for the financially needy the top priority), and to prefer student aid programs such as the 100% federally funded Pell Grants and Stafford Loans, which had few strings, over programs that required buy-in from states and institutions in the form of matching funds and maintenance of effort. Congress thereby chose "redivision federalism" as the basic approach to higher education assistance, as it redivided what had been concurrent powers with states and institutions. In so doing, Congress moved away from the opposite concept, "cooperative federalism," in which federal, state, and institutional resources are combined so that all parties have skin in the game and fewer regulations are necessary to prevent abuses. The result has been that despite the federal government's hubris of attempting to fund the effort itself, it soon discovered it could not do so and, moreover, eventually found its former partners diminishing their own efforts.

Think for a moment about the scandals of the past few years involving the for-profit schools. If states had had substantial money at stake through the old SSIG student aid matching program, based on the cooperative federalism model, would they have tolerated and funded their share of the abuses at these schools? Likely not. Sadly, under the redivision model, the schools have been able to concentrate their lobbying and political contributions on the few key members of Congress necessary to exploit the federal programs. Seeing the bad outcomes resulting from billions of dollars of Pell and Stafford spending through these schools, the Department has tried to issue regulations, only to find itself the target of Congressional disapproval.

One solution to all the bickering about regulations is to rebalance funding of programs. Revitalize cooperative federalism models; back off the idea that the federal government can go it alone. Think through the interaction of program models and the need for regulation simultaneously rather than thinking only of regulations. Same for the FAFSA. Make the states and institutions partners again with the federal government.

Back when the Higher Education Act was shaped in 1965 and 1972, another issue occupied much Congressional attention: the need to clean up the nation's waterways. But Congress chose, in the Clean Water Act, cooperative federalism to do the job rather than redivision federalism. It must be noted that it is not the household water bill that has skyrocketed above all else, or that a generation is saddled with a trillion dollars of economy-strangling debt to pay for clean water, or that the nation has spent billions on water with little to show for it. It is past time to put the principles of cooperative federalism to work in higher education.