February, 2019
Washington -- Senator Lamar Alexander, chairman of the Committee on Health, Education, Labor, and Pensions, is suggesting an up-tempo pace to reauthorize the Higher Education Act. He wants committee action this spring and final passage this summer.
To be sure, the country needs a major overhaul of the HEA. Federal programs clearly are not working well. Student loan debt is out of control. Many colleges are in financial trouble and several are closing. Corruption is endemic in the for-profit sector. The Department of Education is controlled by the interests it is supposed to regulate.
Senator Alexander offers small-bore remedies, like reducing the number of questions on the FAFSA financial aid application form, simplifying loan repayment options, and replacing one college accountability measure that doesn't work with another that is likewise destined not to.
That's one step forward, one sideways, and one backwards, leaving no net progress at a time when bolder thinking should be in order.
Let me suggest two bigger ideas whose times have come.
• Some in Congress have proposed that student-loan borrowers have more refinancing options. Yes, by all means, and Congress should also provide for borrower refinancing through the federal tax system so that borrowers can repay their loans as part of their federal taxes. Other countries do this successfully. Repayment would be based on income without the complications of having to file annual income statements with separate loan servicers in order to take advantage of income-based repayment. It would also provide student-loan borrowers with consumer protections commensurate with those provided other borrowers. This would be a first step in phasing out the error-prone, self-dealing servicers completely, at a savings of several billion dollars over the period of the HEA reauthorization, which could be reinvested in grant aid for needy students or to upgrade IRS systems, or both.
• In the original HEA of 1965, program participation by institutions required outside matching funds as a quality control safeguard. SEOG and FWS still do, at a matching rate of 25%, in cash or in kind. It's time to put such requirements on all federal student grants at all participating institutions, regardless of sector. Much of the wrangling over special laws and rules for for-profit institutions would be eliminated with true, outside the federal government matching requirements, universally applied.
Senator Alexander's rush to push through an HEA reauthorization comes at a time not only when higher education challenges are more formidable than his solutions, but at a time when the House should be preparing long-overdue oversight hearings into program and personnel issues at the Department of Education, which is in a competency if not a corruption tailspin.
Perhaps Senator Alexander's unstated goal is to tie up staff with HEA reauthorization rather than oversight, and to rush through a bill before investigations can properly be conducted. A good response by the House majority would be to say that the sooner the Department of Education replies to subpoenas, FOIAs, and letters of inquiry, the sooner HEA reauthorization can take place.
In other words, oversight must not suffer a bum's rush on HEA.
