Sen. Lamar Alexander laid out his agenda for the Higher Education Act (HEA), which is overdue for reauthorization, in a speech at the American Enterprise Institute on February 4. Alexander’s ambitions are modest. The senator focused on reforms to simplify student aid and streamline student loans—worthwhile endeavors, but paltry compared to the problems of politicization and trivialization in higher education.
We need structural changes to the HEA, pushing higher education towards intellectual freedom and academic rigor. We also need meaningful accreditation reform and deeper changes to the federal student aid system. My colleagues and I at the National Association of Scholars laid out such a blueprint, the “Freedom to Learn Amendments,” two years ago, when Congress first professed to be serious about reauthorizing HEA. If Congress is unwilling to make meaningful reforms to higher education, then it shouldn’t reauthorize the HEA yet.
Alexander believes his agenda is palatable to both Democrats and Republicans. As the Republican chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Alexander emphasized the various bipartisan bills in circulation that propose measures similar to his HEA blueprint.
But Alexander underestimates the left’s ambition to turn the Higher Education Act into a juggernaut of progressive politics, doling out financial favors on minorities and other identity groups, and pushing colleges and universities into ever more intrusive federal regulation. Last year House Democrats put together their own reauthorization bill, the Aim Higher Act, which would have thwarted most of Alexander’s proposals while demanding massive new spending on special interests.
Still Alexander, who has announced his intention to retire from office in 2020, expects to see the HEA reauthorized in 2019. He plans to report a reauthorization bill out of the Senate HELP Committee by spring, pass it out of the Senate by summer, and persuade the House to send it to President Trump by December. That schedule should enable the government to deliver the Higher Education Act as a “Christmas present to American families,” he said.
Alexander seems to envision the HEA reauthorization as a central piece of his parting legacy. This is understandable, given his long career in public policy and higher education. Alexander was previously the president of the University of Tennessee, the secretary of education under President George H.W. Bush, and the governor of Tennessee. But his willingness to settle for modest reforms, coupled with Democrats’ eagerness to push higher education further to the left, indicate an alarming possibility that the HEA might actually be reauthorized in 2019 largely on the Democrats’ terms.
No reauthorization is better than a bad reauthorization. The status quo, while by no means good, is far preferable to a reauthorization bill that misdirects higher education for years to come.
Simplifying Federal Student Subsidies
In his speech, Alexander sketched out a three-part proposal for higher education.
First, he wants to simplify the FAFSA, the Free Application for Federal Student Aid that is the gateway for access for federal student loans and grants. The FAFSA is far too complicated. Republicans and Democrats agree on this, and both have proposed ways to shorten it. Alexander foresees cutting the 108-question form down to two dozen questions, and enabling families to auto-fill portions of the FAFSA by linking to Internal Revenue Service tax records.
Alexander says he is concerned that too many students, daunted by the FAFSA, never try to fill it out, and thus never end up at college. The FAFSA is a bureaucratic nightmare for parents and students, and simplifying it is a good idea. But it’s a relatively minor piece of higher education policy, and has little effect on one of the key problems in higher education: the politicization of the curriculum.
Deducting Student Loans from Paychecks
Like the FAFSA, the student loan system is complicated and in dire need of overhaul. Student loans are also partly responsible for skyrocketing tuition, because the availability of generous federal student aid has incentivized colleges and universities to increase tuition. There are two problems with student loans: the complicated yet irresponsibly open-handed method of obtaining them, and the multitude of complicated methods for repaying them.
Alexander wants to address only the second problem. He would make it simpler and more straightforward for students to repay their loans and avoid default, but he declined to tackle the complicated system of awarding loans and grants in the first place. This is like installing new fire hydrants in front of tinderbox buildings. Hydrants might help, but building codes count for more.
Last year in the PROSPER Act, House Republicans proposed cutting federal student aid to a single grant program and a single loan program, plus establishing both annual and aggregate caps on federal loans students could acquire. Those common-sense reforms, similar to NAS’s Freedom to Learn Amendments, would go a long way to cutting government overgrowth, protecting students from excessive debt, and reining in tuition.
We should also restrict federal student aid to the poorest students—those with family incomes below 150 percent of the poverty line—and require modest academic expectations, such as maintaining a 2.5 GPA in college. We should devolve power from the Department of Education to the states, by transferring the authority to dispense student loans and grants to state agencies.
We should also require institutions, as a condition for receiving Title IV loans and grants, to file a pledge to maintain students’ free speech and association rights, reduce their proportion of administrators to faculty members, spend a minimum percentage of their endowment on scholarships, guarantee robust due process in all campus disciplinary proceedings, and verify that they are not a “sanctuary campus” for noncitizens. These would prompt meaningful reform by colleges and universities, and protect students from both unmanageable debt and intellectually un-free campuses.
Alexander said nothing about these proposals, although I hope he considers them more seriously as he examines the HEA. Instead, his primary proposal is to eliminate the nine current loan repayment options, and replace them with two new ones, both deducted directly from employees’ paychecks.
The first repayment option, which he expects most borrowers would choose, is an income-based repayment plan under which borrowers would pay up to 10 pecent of their discretionary income. Borrowers with no income or too little income would pay nothing. The second option is a straightforward ten-year repayment plan.
Because borrowers would have their loan payments taken directly from their paychecks, Alexander believes we could practically eliminate default rates—although again this would do little to encourage students to avoid irresponsible debt in the first place, and nothing to incentivize colleges to lower tuition.
Gainful Employment Rule for All
Alexander’s plan would effectively do away with one of the main tools the government uses to require accountability from colleges and universities: the cohort default rate. Under current law, colleges and universities with high percentages of graduates defaulting on their loans become ineligible for Title IV funding. If, as Alexander assumes, no borrowers can default from their loans, that restriction would become irrelevant.
Alexander proposes adding a measurement of whether graduates are earning enough money relative to the cost of their program to justify the expense of their degrees. He gave little information on how exactly this new assessment would work, but emphasized that he wants to verify “whether programs are worth students’ time and money.”
Informally, Alexander referred to this reform as “expanding the Gainful Employment Rule.” The Gainful Employment Rule, put forward under the Obama Department of Education, applies to all vocational programs and all for-profit institutions, not traditional four-year colleges, and requires programs to track their graduates’ earnings and debt. Programs whose graduates have high debt-to-earnings ratios become ineligible for federal student aid.
Last year, under Education Secretary Betsy DeVos, the Department of Education proposed scrapping the Gainful Employment Rule, which has never yet been used to declare a program ineligible for federal student aid. The department said the rule was too unwieldy for colleges and for the department, since it required massive administrative costs to track individual students and calculate their debt-to-earnings ratios.
On the other hand, DeVos also invited concerned parties to submit recommendations to expand the rule to apply to all colleges and universities. The department acknowledged that the benefits of calculating debt-to-earnings ratios conceivably could outweigh the substantial costs of calculating them.
Last year in the PROSPER Act, House Republicans proposed tracking loan repayment rates by each major at each college. Each program would need to show that at least 45 percent of their graduates were repaying their loans, or else lose eligibility for Title IV funding.
It’s clear that we need to hold colleges accountable. Too many are just as predatory as the much-defamed vocational programs: admitting ill-prepared students in order to collect their federal student aid money before they drop out. Any plan from Alexander must be feasible—unlike the Gainful Employment Rule.
One idea NAS has put forward is to make colleges partly liable for their students’ debt. If a former student fails to graduate within eight years, his college should be liable for up to 30 percent of his debt. If a graduate defaults on his loans, his college should again be liable for a percentage of his debt, on a sliding scale according to the overall default rate of the college.
Each institution should be exempt from this liability for up to 5 percent of its matriculating students, in order to give colleges the leeway to continue to admit borderline students who might, if given a chance, succeed in college. But it’s clear that too many students are pressured into attending college, even if the chances are low that they will succeed.
Fixing Higher Ed Requires More Than This
We also need meaningful protections of freedom of speech, freedom of association, and religious freedom, which all too often colleges have trampled. Congress should authorize a commission to investigate whether colleges protect freedom of speech and association, and colleges found repeatedly nonfeasant should be denied eligibility for Title IV funding.
We need greater transparency of foreign gifts to colleges and universities, many of which are enriching themselves by gifts from foreign governments with strings attached.
We also need an overhaul of the accreditation system, which has become a rubber stamp, and the Title II requirements for schools of education, which have become notorious for elevating ineffective pedagogical theory over classroom skills and subject knowledge, and for obsessions with promoting social justice ideologies at the expense of open-minded inquiry.
Alexander has unparalleled experience among lawmakers who shape federal higher education policy. He has been a longtime friend to education reformers. He must stand firm for reform again, pushing not only for a simpler FAFSA, automatic loan payments, and programmatic accountability, but also for protections for free speech, freedom of association, religious liberty, depoliticization of the college curriculum, accreditation reform, and structural reforms to the student aid system.
If we can’t reauthorize the Higher Education Act in a manner that pushes higher education to become more rigorous, free, and cost-effective, then we shouldn’t reauthorize it at all.