Both Alexanders are Wrong

September, 2015

Washington -- The Washington Monthly magazine has published the best policy analysis yet in this cycle of the reauthorization of the Higher Education Act. In noteworthy reportage, New America writer Alex Holt incisively describes the shifting policy ground under both Democrats and Republicans and gives reason for hope that this cycle will result in urgently needed changes to the HEA. Current policy is clearly unsustainable; both political parties must back away from the orthodoxies that have undermined the worthy goals set forth in the HEA five decades ago.

Holt explores the issues by focusing on two of the more outspoken advocates in this cycle, F. King Alexander, president of Louisiana State University, and Lamar Alexander, chairman of the U.S. Senate Committee on Health, Education, Labor, and Pensions. The two Alexanders (not related) are fundamentally opposed to each other on many counts. Allow me to point out where I think each is wrong.

Lamar Alexander is wrong in making federal over-regulation of higher education his bête noire. Indeed, there is federal overregulation, but much of it has come about because of faulty program designs that do not employ the tools of fiscal federalism to limit the need for regulation. For example, had states and institutions been required to match (the current fad is to say "have skin in the game") federal aid to students at for-profit schools, there most likely would have been no need for the Gainful Employment regulation. State legislatures would not have put up the funds for these shoddy and often corrupt colleges. Friends of these schools in Congress gave the country this costly fiasco; Lamar Alexander needs only to look in the mirror to see who is behind the impetus for the regulations.

Reporters at The Chronicle of Higher Education have also done an admirable job of unmasking a study of the cost of federal regulations in higher education. The study has been a centerpiece prop for Lamar Alexander's attack on regulations. It turns out the study did not show what Lamar Alexander said it did. Last time I checked, the authors of the study were so embarrassed by it they continued to refuse to share it fully with Chronicle reporters.

King Alexander, of LSU, may be right about the need for maintenance-of-effort requirements (a tool of fiscal federalism), but he is wrong about wanting to remove HEA aid to students at private, non-profit institutions. Reform the way aid is distributed, yes; eliminate it, no.

Private non-profit institutions are essential to the country. They educate, at less cost to taxpayers than public colleges, a significant share of students. Their faculties are diverse and not under the thumbs of public governing boards, which historically have demonstrated susceptibility to pressures of money and politics. Many of these institutions are in the small towns and cities of America and are a civilizing influence in their communities. For a higher education leader, King Alexander is remarkably wrong in his understanding of how American higher education serves the country and how both public and private institutions are necessary checks on each other.

Thanks are due The Washington Monthly and Alex Holt for the article that illuminates emerging policy issues and reveals the curious and wrongful thinking of the two Alexanders.









Ending Scholarship Displacement Is Long Overdue

September, 2015

Washington -- In the last post, I noted that there is incredibly wasteful federal higher education spending that could and should be redirected to decades-old programs that actually work, but are underfunded.

I'm thinking mostly of (1) wasteful spending on the tax expenditure side of the budget in the form of ineffective higher education tax credits and deductions, and (2) the not only wasteful but harmful spending on for-profit schools that demonstrably set students back in life with worthless degrees and unmanageable debt. We are talking tens of billions of annually wasted dollars that could be used more effectively in the array of cooperative federalism programs that work through campus-based and state-based matching efforts.

But there are also wasteful practices within otherwise good programs that need to be rooted out. Prime among them is the practice of scholarship displacement, as was recently pointed out in an op-ed by Michele Waxman Johnson, vice president of Central Scholarship. Displacement occurs when colleges take grant aid intended to help low income students and use it to reduce their own institutional aid rather than reducing students' loan and work burdens. This is akin to taking candy from a baby, because the process is often done behind closed doors, in the context of innocent-sounding "enrollment management." The awards appear in students' financial aid packages, but equivalent amounts are quietly taken out the back door, leaving the awards essentially worthless.

Displacement occurs with both private and public grant funds. It's most easily understood when viewed from the institution's standpoint. The goal of most colleges and universities is to enroll the greatest number of students at the least cost to the institution. That often means not applying outside money to reduce students' debt load, but to helping the institution's own bottom line. This is one reason why total student debt in the country is now $1.3 trillion. This is one reason why the federal Pell Grant program has never been able to hold down student borrowing as advertised.

The National Scholarship Providers Association (NSPA) has recommended a stop to displacement, which undermines their efforts. Displacement is also fundamentally deceitful, I would add. In her op-ed, Michele Waxman Johnson writes, "[W]e support the recommendations of NSPA, and ask the federal government to modify federal student aid policy to mirror the NSPA recommendations." Such a move would reduce student loan burdens on the low income by several billion dollars annually. It is long overdue.





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.



Mut und Wut

August, 2015

Berlin -- A remarkable exchange of letters has just been published in Berlin under the title Mut und Wut: Rudi Dutschke und Peter-Paul Zahl Briefwechsel 1978/79. During these years, the novelist Zahl was in a German prison and Dutschke, the charismatic anti-authoritarian, was living with his family in Denmark.

The book includes a helpful introduction by Gretchen Dutschke, who edited the letters with Christoph Ludszuweit and Peter-Paul Zahl, before Zahl's death in Jamaica in 2011.

Publication of the letters should dissuade historians from casually and mistakenly lumping Dutschke in with the likes of the murderous Red Army Faction. Last year the German Historical Museum made the egregious error of putting Dutschke's likeness on a brochure for its RAF exhibition. (When the mistake was brought to its attention, the brochures were quickly withdrawn, to the Museum's credit.)

The newly published letters date from a time when Rudi Dutschke was laying the groundwork for the creation of the German Green party. Peter-Paul Zahl went on to write krimi novels based in the Caribbean and even a children's volume in Jamaican patois.

The new book contains other letters of note, such as a Dutschke letter to Lothar Späth, minister-president of Baden-Württenberg, and a 1980 Zahl letter, after Dutschke's death, to the theologian Helmut Gollwitzer.

The book is available in Berlin through Verlag M and at Amazon.de:

Peter-Paul Zahl und Rudi Dutschke reflektieren die 68er in den Jahren 1978/79 vor dem Hintergrund aktueller politischer und gesellschaftlicher Entwicklungen. Peter-Paul Zahl sitzt zu dieser Zeit im Gefängnis, Dutschke ist nach Aarhus gezogen.

Fiscal Responsibity Yes, Austerity No

July, 2015

Berlin -- Germany's heavy-handed maneuvering in Greece's financial crisis has set many Berliners against each other and raised eyebrows around the world. Germany, in appearing so arrogant, is ruining a quarter century of good-neighbor diplomacy and responsible European Union leadership.

Germany cannot claim the high moral ground when it comes to debt forgiveness for Greece. Germany has itself been the beneficiary of debt forgiveness after both world wars. Germany's misstep makes the country seem like a bully and only serves to remind everyone of what Nazi Germany did to Greece in World War II. What ingrates, to put it mildly.

The crisis is not over. One way to help defuse it, it seems to me, would be to stop using the term austerity, as if austerity were synonymous with fiscal responsibility. Greece needs greater fiscal responsibility, to be sure, but in the sense that its sacrifices now should be directed toward self-help of its own country for the future. Greece needs better tax policy and tax administration, more equitable pensions, improved infrastructure, and most of all, a sense that it is on a path toward recovery. The term austerity too often is used to include these needed changes but also that Greek sacrifices should be made, above all, to repay loans from German and French banks. Many of these loans were irresponsible. The IMF is correct in its analysis that some of this debt simply needs to be written off.

Because of Greece's strategic importance, the U.S. government should not be sitting on the sidelines. The Chinese and the Russians both have designs on exploiting Greece's instability. They are surely pleased to see discord in western Europe. The situation has parallels to 1947, when the British were unable to help Greek recovery and asked for U.S. assistance. The result was the Truman Plan, in which both Greece and Turkey were given assistance and brought into NATO as protection from Soviet expansion on Europe's southeastern flank.

If Greece leaves, or is forced out of the Euro currency, the U.S. should consider backstopping whatever currency replaces it -- Drachmas, scrip, IOUs -- pegged at a level against the dollar that keeps credit and commerce going. The Greeks would be grateful. American taxpayers should see the wisdom of investing in Greek stability as opposed to allowing a military confrontation with Russia or China to develop, which would be much more costly. Building and deploying even two aircraft carriers for the Mediterranean, to counter China's and Russia's naval buildups, would likely cost much more than helping Greece's economy for a few years. The precedent would be the Truman Plan. It worked once, and perhaps should be dusted off again.

Discussion of this might even bring Germany back to its senses. It is not too late for Chancellor Merkel to split with her hard-line finance minister, Wolfgang Schäuble, drop the self-serving aspects of austerity, and help devise a workable plan for Greece's economy to recover.

Nebraska Innovation Campus, Again

July, 2015

Lincoln -- Many years ago (four decades, in fact) I was employed by the State of Nebraska to review state agency budgets and give my recommendations for changes to the governor and the legislature. Sometimes my recommendations were accepted, sometimes not. I started out on smaller agencies; later I was assigned larger ones, including the University of Nebraska.

If I were still making such recommendations, I'd likely recommend more state taxpayer investment in the Nebraska Innovation Campus. It needs to succeed. Granted, this could mean throwing good money after bad. Since I last wrote on the NIC, its troubles have been documented by local reporters and watchdogs. Indeed, the university does not have a great track record in these ventures. Witness the ill-fated technology park in northwest Lincoln, for example. There is an unfortunate history at the university of me-tooism, about chasing fads like technology parks. I remember UNO's downtown education center, modeled after a self-supporting example in San Francisco. State government offices eventually moved in to bail UNO out.

So there is much to overcome in making a recommendation for more tax support. The 2015 state legislature apparently felt so as well: it denied the university's request for an additional $25 million of tax money for NIC, but told the university to come up with a plan for NIC success before next year; then it would take another look. Fair enough.

NIC's thrust is to innovate in food, fuel, and water. NIC success would be more likely, I believe, if university leaders were more inclined to look around at rapid changes in these areas, especially food, and adapt to them. Not so long ago, the university boasted of creating the technology behind McDonalds' McRib sandwich. But now, if anyone has noticed, McDonalds is closing outlets all over the world. Replacing McDonalds are Chipotles and Paneras, where the emphasis is on fresh and healthy food. Chipotle, like many other food providers including Walmart and Whole Foods, is searching for suppliers for its wares. Nebraska is not much in the hunt, as many of its products are not what these food companies want. (Although there was an uptick in milo acres planted when the price of milo this spring surpassed that of corn.) Are we in Nebraska sufficiently taking note of the demand for healthier foods to address the nation's obesity and diabetes epidemics, which are not going away? How about noting the farm-to-table organic food movement, which is increasing demand for foods free of antibiotics and pesticides?

So far, NIC has thrown in its lot with ConAgra, a trailing-edge rather than leading-edge food processing company. It was not always so; once ConAgra CEO Mike Harper was so dominant he acted as though he controlled state and local governments, demanding and getting whatever he wanted, from state tax subsidies to permits to raze Omaha's jobbers' canyon. But now ConAgra is in trouble because of changing consumer demands. The consumer juggernaut is formidable. Witness how changing consumer demand settled the fight over hog gestation crates. Witness how seed monopolies like Monsanto are seeking protection in Congress from consumer food-labeling advocates. Is NIC paying attention to how rapidly the food world is changing?

The legislature should signal NIC that it would welcome a plan in which NIC becomes a crucible where old food and new food approaches come together to grapple with emerging health and food security issues and products. In the plan, NIC would be the place to be when it comes to food and water, as Silicon Valley has been to computer software. NIC is already well-positioned in regard to the water component, what with the conscience-money donation of $50 million from center-pivot mogul Robert Daugherty. NIC could go on recruiting old line corporations, not as part of a rear-guard, twilight struggle against consumer demand for healthy food, but corporations newly ready to engage with the changing nutrition and food security needs of our time. Simultaneously, NIC must open its doors, its spaces, and its labs and greenhouses to non-profits, food cooperatives, organic researchers and producers, pollinator protection organizations, sustainable agriculture practitioners, consumer advocates, nutrition publishers, and especially health care organizations dedicated to addressing and reversing the dietary deficiencies that have resulted in the precariousness of our health indicators, and an outright world epidemic in the case of diabetes.

Such a plan could be worth another $25 million of tax support. A vibrant NIC might even draw federal research agencies back onto the campus, as was originally conceived. Let's see a plan to justify it.













Pollinator Research

June, 2015

Lincoln -- A UNL entomologist is establishing pollinator plots on the East Campus near 48th and Holdrege Streets. “Now it’s a dream to work in this field,’’ he told the Omaha World-Herald. “Everybody has an interest and wants to help and work with you. The public is embracing the idea of pollinators.’’

This is good news, especially during National Pollinator Week. The Lincoln Journal Star also noted the importance of pollinators in a recent editorial. Likewise, there has been extensive and appropriate press coverage of new UNL research on the harmful effects of pesticides on bee behavior.

What is unsettling, however, are the increasingly strident attacks against those whose concerns for bees and butterflies extend to the misuse of genetic modification technology against such pollinators. Some of us are working on a better understanding of the role GMOs play in the decline of pollinators; for example, the genetic modifications made to crops to produce their own insecticides can harm beneficial as well as destructive insects; and the widespread use of glysophate on certain crops, made glysophate-tolerant through GMO technology, has caused an alarming decline in pollinator habitat. These concerns are based in science, but to read some of the pro-GMO polemicists, one would think people who question the rush to GMOs must also be climate change and evolution deniers, or trendy pseudoscientists. GMO foods may or may not be safe for human consumption (that will take more long-term study; several countries regulate them more than does the U.S.), but their harmful effects on the environment cannot be discounted easily by these kinds of ad hominem attacks.

What is also unsettling is how research in these areas is conducted and how it is being funded. The UNL study showing how pesticides disrupt honey bee behavior was conceived by an elementary-education graduate and funded by the Kimmel Foundation (related to the pollinator-dependent Kimmel orchards). Good for them. But should these questions not be a priority of those whose expertise is entomology and funded by taxpayers rather than interest groups, no matter how worthy? As a former federal research administrator, I know too much about the research funding process, and how faculty pursue grants, not to raise such a question. Research must not be for sale or have the appearance of such. It is doubtless safer to raise the question on this Kimmel-funded study than on one funded by Bayer, Syngenta, or Monsanto, lest the questioner be labeled anti-science for even a bit of skepticism regarding GMOs.

The history of Nebraska suggests those with skepticism about supposed agricultural advances may prevail in the longer run. Think of the skeptics who challenged the "science" of their time such as rain-follows-the-plow; deep plowing of the sod; mechanized farming up and down hills; center-pivot irrigation on sandy soils; the safety of heptachlor and aldrin; the safety of atrazine. All were touted at one time or another by those claiming to be leading scientists. Now the bloom may already be off the rose of glysophate, not only because of its effect on pollinator habitat, but because the World Health Organization has classified it as a probable carcinogen. Skepticism should never go out of fashion; it is, in fact, essential to scientific method itself.

The Ban on Trans Fats

June, 2015

Lincoln -- Today the national press is highlighting the remarkable career of a University of Illinois scientist, Fred Kummerow, who has been attempting since the 1950s to get the Food and Drug Administration to ban trans fats from the U.S. food supply. Professor Kummerow is now 100 years old and has lived to see the FDA finally do just that. "Science won out," he says, and thousands of lives will be saved because of it.

Another scientist should also be given credit, the late Professor Ruth Leverton, graduate of the University of Nebraska and nutrition researcher at NU's College of Home Economics for nearly two decades. While working for the federal government, she pioneered food labeling, so consumers would know what is in their food. When the FDA several years ago mandated that trans fats must be identified on food labels, it was only a matter of time that consumer demand would help drive such products from the market, paving the way for the outright ban.

Last month I was in Ruth Leverton Hall on NU's East Campus. On the south end of the second floor there is a photo of Professor Leverton along with a history of the building that bears her name. Unfortunately, the display is all about the building and little about its namesake's contributions to nutrition and food safety.

I was in Ruth Leverton Hall only incidentally, to get a campus parking permit so as to see the newly installed campus statues of four former U.S. secretaries of agriculture with connections to NU. I could not escape the irony that one of the statues is of a board member of ConAgra, which has fought the FDA in order to continue to include trans fats in its products. ConAgra, which spends millions fighting food labeling efforts nationally, is now in a public private partnership with the university's Department of Food Science and Technology, which necessarily raises questions about conflicts of interest in scientific research.

How about a statue for Ruth Leverton? In the meantime, we can celebrate the University of Illinois scientist who has finally been vindicated for his contributions to food safety.





Heroes and Villains

May, 2015

Washington -- The collapse and bankruptcy of Corinthian Colleges, the SEC's charges of fraud by ITT Tech executives against its investors, and the substantial enrollment drops at for-profit colleges have recently dominated headlines in the higher education trade press.

What has gone under-reported is the irony that most students themselves cannot take bankruptcies for the student loans they took out to attend these institutions, and that fraud perpetrated on students is a far greater problem than fraud against investors.

Nor has proper credit been given to non-profit organizations and individuals whose work over the years has exposed the sordid and corrupt underpinnings of many for-profit colleges. These dedicated people have done heroic service in the national interest by standing up for students, families, and taxpayers. I cannot name them all, but in the forefront are Veterans Education Success, the National Consumer Law Center, The Institute for College Access and Success, New America Foundation, and Republic Report.

The trade press could likewise pay more attention to the culprits who led the country into the for-profit college fiasco, which would include many in Congress who looked the other way while accepting political contributions from for-profit interests, as well as many people in Washington's revolving doors who circulate through congressional staff positions, lobbying shops, federal agencies, and political campaign staffs. Even as I write this, many with a checkered past are once again lining up with political candidates in the 2016 elections to take advantage of unwary students and taxpayers. The trade press would do well in articles on the higher education positions of the candidates to note as well just who is advising them.

How Germany Limits Student Loan Debt

May, 2015

Berlin -- Those who follow student loan debt issues in the United States -- and that's about everyone now that this form of debt is being recognized as a major national problem -- may be interested in how another country limits such debt.

The major need-based student financial aid program in Germany, the Bafög, awards most aid in a fixed ratio: half grant, half loan. The loan portion carries no interest. It is repayable starting five years after the end of the aid eligibility; in other words, there is a five-year grace period, which can be extended under certain conditions such as child care. No borrower pays back more than 10,000 Euros in total, whether or not more was borrowed.

One advantage of the German practice of making aid half grant, half loan, is that the ratio cannot be manipulated by the institutions students attend. In the U.S., the ratio is badly out of balance in favor of loans. This is partly a function of insufficient Pell grant (discretionary) appropriations compared to Stafford loan (entitlement) spending, but it is also because many institutions routinely capture the Pell grants for themselves (often to make so-called "merit" aid to other students), thereby burdening financially needy students with even more loans.

Germany has no student debt crisis. It is worth mentioning that many U.S. institutions of higher education are modeled in their teaching and research missions after the University of Berlin, as created by the Humboldt brothers early in the nineteenth century. With regard to student debt, it is instructive to look once again at German experience.

Of course limiting student loan debt in the U.S. would entail significant cost, but it could be paid for by limiting (or eliminating) U.S. higher education tax credits and deductions, which total nearly $40 billion annually. Germany allows education fees and student loan interest payments to be tax deductible, but because such fees are low or nonexistent, and most loans are no-interest in the first place, the cost is comparatively minimal. One good reason to tap U.S. higher education tax credits and deductions in order to control student loan debt: much research shows the credits and deductions do not provide better higher education access as promised.