Deep Regrets and Narrowed Opportunities in Higher Education

December, 2017

Washington -- Those who work in higher education policy, who care deeply about the well-being of students, families, and taxpayers in the administration of federal higher education programs, are surely feeling dismayed at the prospect that the Trump Administration will roll back well-intentioned efforts to protect these vulnerable and often-neglected constituencies. I know I am.

These efforts over recent years have resulted in regulations and program adaptations that aim to protect student loan borrowers, student victims of illegal for-profit college practices, and students who suffer under all manner of civil rights violations.

But there should also be a feeling of deep regret that more was not done, when there was plenty of opportunity, to work these protections into law and into the fabric of the federal system through which higher education is organized and managed in this country. Why wasn't more of an effort made to:

• Reduce student loan borrowing by requiring states and institutions to keep up their financial support, in exchange for federal dollars, through state and institutional matching and maintenance of effort requirements? It has been clear for many years (indeed, decades) that federal aid increases have been undermined, especially by reductions in state support.

• Protect for-profit college students by requiring states to share the responsibility against financial ruin of students and families who were duped by false advertising and illegal recruiting? Such a requirement would have complemented the federal Gainful Employment regulations and served as a fail-safe backup against the weakening or elimination of the regulations. If states had been required to put up funding as match or as insurance in the first place, the problems never would have grown as they did. Most state legislatures would never fund dubious enterprises like many of the for-profit colleges; they are almost entirely a federal government creation.

• Advance civil rights protections through state attorney general offices? Although some AGs have stepped up, many have not and the whole subject is fraught with problems of jurisdiction, mishandling of due process, and concerns of federal overreach.

I'd like some answers, or at least a discussion. Why did so many people think 100% federally funded programs, accompanied by ever-increasing regulations to try to control the inevitable abuses that occur with such programs, would work on their own without being simultaneously woven into our national/state/local system of federalism? One answer is hubris among those who placed their faith in a benevolent federal government over their fears for the constituencies they presumably were out to protect. As we should have seen from past experience, the power of the national government is not always exercised toward good ends.

There is an opportunity to salvage some protections for students, families, and taxpayers through the upcoming reauthorization of the Higher Education Act. But success will depend on the outcome of a struggle within the Republican Party between those who sincerely believe that federalism can tame crony capitalism, and those who want to use the Department of Education as a giant piggy-bank to reward corporate interests and their associated political campaign beneficiaries who stand to gain billions of dollars from exploiting these constituencies. The stock market has already placed its bets on the latter, guessing that for-profit colleges will be unharnessed to return to their anything-goes days, and that the financial services industry will somehow get back the income stream or other largess from federal student loans.

I'm thinking the stock market has it right. Federalism of any kind, let alone progressive federalism, has not had much of a foothold in federal higher education policy for decades. Students, families, and taxpayers: prepare for difficult times.

On the other hand, the reauthorization of the HEA has a history of being a bipartisan effort. Several Republicans are amenable to injecting "skin in the game" provisions into the HEA, which are the essence of federalism. Conservative think tanks like AEI have creative ideas that could replace student loans with an IRS line of credit. Some Republicans may still be repulsed by the waste, fraud, and abuse that ensued with the last round of crony capitalism that ran rampant for years and still has not been eradicated from the Department of Education. Democrats have an opportunity, albeit a narrow one, to carve out a higher education agenda for the HEA that protects students, families, and taxpayers. The question is, will they pursue it?