December 18, 2017
With less than a year having elapsed since a new administration took office in Washington, it remains impossible to say with precision what difference the changing of the guard will mean for higher education. However, the House of Representatives tipped its hand at November’s end with the Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act, a 542-page proposal that emerged from committee and prompted a White House response of general agreement.
Meanwhile the new GOP tax plan, now in its final version and ready for a vote in both houses of Congress, will if passed exert far less direct effect on students and parents than would have been the case if the House version–which contained multiple proposals not friendly to students receiving certain forms of financial assistance–had become law. Nonetheless the House bill provided some clues regarding the direction some people in government might pursue if they could.
The PROSPER Act, which is intended to give the Higher Education Act its first overhaul since 2008, is described by the House Education Committee as an attempt to promote “innovation, access, and completion,” simplify and improve student aid, “empower…students and families to make informed decisions,” and promote “strong accountability and a limited federal role.”
According to a summary issued by the committee, the new legislation would expand opportunities for industries and educational institutions to cooperate on programs of instruction and work-study, and would permit students “to use Pell Grants for shorter-term programs that will assist them in entering the workforce more quickly.” The bill would also provide financial incentives for Pell Grant recipients to complete their studies on time and with less debt, would increase access to TRiO programs, and would relax restrictions on distance learning.
The committee also maintains that the bill “streamlines student aid programs into one grant program, one loan program, and one Work-Study program to ease confusion for students who are deciding the best options available to responsibly pay for their college education” and that it also simplifies loan-repayment programs.
PROSPER also contains provisions intended to provide students and parents with more information, sooner, about financial aid options, and would require the Secretary of Education to “create a consumer-tested College Dashboard that displays key information about colleges and universities, including enrollment, completion, cost, and financial aid,” with “aggregated information on the average debt of borrowers at graduation and the average salary of students who received federal financial aid both five and 10 years after graduation.”
Under PROSPER, accreditation criteria would be simplified and would be tied more closely to student outcomes. Colleges and universities would also share more risks with the government. “To push institutions to focus on student completion and require institutions to share in the risk of non-completion, the burden of repaying unearned aid when a student withdraws from an institution is shifted on to the institution.”
The statement from the White House echoed PROSPER’s emphasis on consolidation and streamlining, including a loan-repayment system that would cap “monthly payment at 12.5 percent of a borrower’s discretionary income. This would maintain generous loan forgiveness for all undergraduate students (after 180 months of repayment).” The White House also emphasized greater simplicity and transparency in financial information made available to students and families, a reduction in federal regulation, and the aforementioned institutional risk-sharing.
The presidential statement concluded with a free-speech stipulation:
“Our higher education institutions should foster an environment that promotes spirited, intellectually engaging, and diverse debate. Congress should therefore require institutions of higher education receiving federal funds to provide prospective and current students with a free speech policy disclosure.”
Critics of PROSPER warn that it will place students at risk of exploitation by reversing the Obama administration’s effort to link federal assistance to for-profit institutions with the post-graduation success of students.
Opponents of the bill also have expressed concern about new performance-based accountability measures for minority-serving colleges that receive federal grants, completion-based criteria being new to that arena. Critics charge that the institutions most in need of help will be penalized.
On other fronts, the tax reform bill as originally passed by the House elicited considerable adverse comment regarding the implications for higher education. Among other provisions, it would have repealed the tax deduction for interest paid on student loans, eliminated the portion of the tax code that allows institutions to waive or reduce tuition payments by graduate students without tax ramifications, treated tuition benefits for college employees’ families as taxable income, and included employer-provided educational assistance in taxable income.
The Senate tax reform plan disagreed with the House bill on all of the above, and the final version now up for a vote in both houses reflects the Senate’s preferences. Persons who would have been adversely affected by the House version can breathe a sigh of relief, but it is worth bearing in mind that such marked departures from current practice did prevail in one chamber of Congress.
It remains to be seen whether the House and Senate will display similarly divergent views as PROSPER comes under discussion. Sen. Lamar Alexander, R-Tenn., a former Education Secretary now serving as Chairman of the Senate Education Committee, has expressed hopes for a bipartisan approach to the Senate’s re-authorization of the Higher Education Act. If that bipartisanship actually occurs, it could lead to numerous aspects of the House plan not being enacted. However, Alexander’s own policy preferences generally resemble the philosophy of PROSPER and of the White House statement.
What all of this means right now is, well, not much–yet. Clearly Congress will have a great deal to talk about and will consume months (perhaps years) doing it. Donald Trump has consistently championed the bold initiative, while Congress has consistently moved slowly–if at all–on matters dear to the president’s heart. The prospect of off-year elections adds a further element of uncertainty.
Nonetheless it’s clear what direction, generally, the president and key members of Congress would like to take. Families of college-bound students would do well to keep abreast of developments and consider carefully how any proposed changes–of which there surely will be many more–could affect their choices.
Paul Culp has degrees from Oxford University, Jacksonville State University, and Samford University. A former journalist, he has also taught academic writing and research methods at the university level and an assortment of humanities courses at the secondary level, and now writes for The Coaching Educator team.