Re-framing Issues and Approaches to the HEA

March, 2019

Washington -- The newly introduced Hassan-Durbin PROTECT Act deserves passage as soon as possible. It contains many long overdue reforms in programs under the Higher Education Act.

It has an impressive list of supporters who are trying to watch out for the interests of students, families, and taxpayers. Those who need financial aid – especially the veterans among them – are being exploited unconscionably by predatory colleges and predatory loan servicers. Federal money in higher education is often doing more harm than good, setting up new victims to join countless others whose lives have already been damaged by huge debts and worthless degrees.

Unfortunately, the bill has virtually no chance of passage this year. It will never make it out of committee.

It's possible some parts of the bill could be incorporated into a Higher Education Act reauthorization, but that looks unlikely because of the way issues are being framed. Politically, the rhetoric falls into the same partisan dichotomy that ties up the Senate on almost all legislation.

There are two ways around the impasse. One is for the Democratic sponsors to wait until the 2020 elections and hope for a Senate majority. Another is to approach the issues with different means to the same ends, approaches Republicans should welcome unless they are hopelessly craven instruments of the exploiters.

Those means are federalism and market forces.

The original HEA of 1965 was based on "cooperative federalism." Federal dollars were to be matched by states and institutions three to one (75-25). Up front, others besides federal taxpayers had "skin in the game." Restoring matching fund requirements would create the "skin" that Republicans (and many Democrats) profess to want.

Republicans also want uniform treatment of all higher education institutions, with no special legislation to control the excessive dependence of the for-profits on federal funding. Returning to cooperative federalism at 75-25 for every HEA Title IV participant would accomplish uniformity.

Republicans want fewer federal regulations and more reliance on market forces. Returning to cooperative federalism would require all institutions to respond to markets. This is not a problem for public and non-profit institutions, where there is tuition income. In the case of tuition-poor for-profit institutions, the practical effect of this would mean that once again they would have to work with industries and employers that would find value in the training and education the schools offer, and not rely almost solely on federal largess (and exploitation of veterans' GI Bill benefits).

Republicans presumably want more state and local control over higher education rather than concentration of authority at the U.S. Department of Education. That could be achieved by preventing the Secretary from "preemption" of traditional state consumer protection laws, and by accepting many provisions of the PROTECT Act that strengthen states.

If Republicans would be willing to approach HEA issues on these terms, expressed as tenets of conservative ideology, then Democrats should work with them. Otherwise, PROTECT must wait for the 2020 elections.