Financing American Higher Education as a National Defense Issue

August, 2015

Washington -- Seldom it is considered as such, but financing American higher education is in significant part a national defense issue. The way we have been shifting the burden of college costs onto students and families through student and parent debt has slowed the national economy, making us less robust as a nation. It has discouraged talented but lower-income individuals from completing their college goals and making our country stronger. It has widened income and achievement gaps between haves and have-nots, creating more tensions along lines of class, race, and ethnicity. Student loan debt has soured a large part of a whole generation on the American dream.

Political candidates and others have come forth with ideas to reform higher education finance, sensing its emerging importance as a political issue. The Sanders, Clinton, and O'Malley campaigns each have their versions; the Campaign for Free College Tuition is one of several other efforts to limit student debt. The U.S. Senate Committee on Health, Education, Labor, and Pensions has been holding hearings on higher education finance as part of a scheduled reauthorization of the federal Higher Education Act.

I do not want to throw cold water on any of these initiatives. Several contain thoughtful proposals. Most involve getting states back into taking more financial responsibility and requiring institutions to have more "skin in the game." But getting any of these ideas into law after achieving consensus is another matter. I'd like to propose an alternative for Congress that is more practical and achievable.

1. Go back to the consensus on higher education finance that was reached four decades ago in the reports of the Carnegie Commission and the landmark Congressional legislation of 1972. These documents, and the resulting legislation based on them, spelled out the financing roles for states, institutions, students, and the federal government. The legislation provided programs that complemented each other and contained risk-sharing for institutions and federal leverage over states, two of the more popular of the current reform proposals.

2. As part of the look-back, assess how the programs, over time, got out of balance in their funding and implementation so that they actually created incentives for states to back out of their funding efforts and for institutions not only to drop risk-sharing but exacerbate the shift away from providing affordable higher education for the financially needy. This will necessarily be a crow-eating exercise, but the crow will be shared so widely that no parties will suffer indigestion from which they cannot recover.

3. Reauthorize and rebalance the programs that were part of the original consensus. Drop those programs that have been added and have proved to be ineffective and incredibly wasteful. Use the proceeds (in the tens of billions annually) to strengthen the original programs of the old consensus which were underfunded. If there is any doubt as to what has worked and what hasn't, let me know and I'll assist. The effort must also include debt-relief measures for current borrowers.

This process should be undertaken with the gravity due a national defense issue. Proper and balanced funding of American higher education must be approached in the context of what we spend directly for national defense through DoD, NSA, CIA, and other agencies too numerous to name. It should also be undertaken swiftly and not get tied up with partisan politics. The original consensus, it should be remembered, was bipartisan and the programs were grounded in both conservative and liberal philosophies.