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Business Officer Magazine

Federal File

Coverage of legislation and regulatory activity that affects higher education

By Liz Clark

Legislative Outlook for 2012

The 112th Congress completed the year with much unfinished business. Legislators will face the election year with several key issues for higher education still on the table: ongoing wrangling over deficits, increased concern over college costs, and ever-increasing regulatory burdens.

Supercommittee Fails, Deficit Talks Continue

Delta Cost Project to Dismantle

The Delta Cost Project on Postsecondary Education Costs, Productivity, and Accountability will shut its doors early in 2012. Since 2006, Delta has been an independent nonprofit policy research organization with a focus on higher education finance. Executive Director Jane Wellman will focus full time on her role as executive director of the National Association of System Heads, a position she took on while still heading the Delta Cost Project.

The National Center for Education Statistics at the Department of Education will take over the data collection and maintenance previously handled by the Delta Cost Project, while the American Institutes for Research will produce the project's analytical work.

On Nov. 21, 2011, the Joint Select Committee on Deficit Reduction, or “supercommittee,” issued a statement admitting that its members were unable to reach agreement on how to slash the federal deficit. However, proposed changes in tax policy, entitlement programs, and federal spending for purposes of deficit reduction will continue to garner significant attention on Capitol Hill during the upcoming election year. With the White House up for grabs in November and Republicans eyeing a Senate majority, expect the fiscal responsibility rhetoric to be deafening.

The supercommittee failure sets up a default action of automatic, across-the-board spending cuts called a “sequester,” beginning in 2013. However, few in Washington believe that Congress will allow that process to move forward without some attempts to tinker with the details. Republicans are focused on repealing the sequester's mandate for nearly $500 billion in reductions to the Department of Defense. Some bipartisan coalitions continue to press for “going big,” calling for plans to reduce the deficit by at least $4 trillion over the next decade. And others with stakes in domestic spending programs, such as federal student aid and research funding, will be lobbying legislators to stave off cuts to their interests in the domestic discretionary budget.

Spotlight on Affordability, Access, and Completion

Policy makers, political commentators, and activists on both sides of the aisle have renewed their focus on higher education costs and affordability. Activities include the following:

  • Late in 2011, President Obama and Education Secretary Arne Duncan initiated conversations with higher education leaders on reducing costs, finding more efficiencies, and enhancing access and completion rates.
  • At a conference on federal student aid in Las Vegas on November 29, Duncan delivered a speech focused on high college costs.
  • On December 5, President Obama summoned a dozen presidents and chancellors to the White House for a discussion on reducing costs, graduating more students, and identifying best practices that can be shared with other institutions. This focus on affordability comes just weeks after the president announced his plans to provide relief to individuals paying back student loans and at a time when Occupy Wall Street activists have made student loan forgiveness a rallying cry.
  • On November 30, the House Education and the Workforce Committee held a hearing titled “Keeping College within Reach: Discussing Ways Institutions Can Streamline Costs and Reduce Tuition.” At the hearing, the four witnesses—two college presidents and two higher education policy experts—generally focused on trends in higher education funding and new models that could potentially boost completion while at the same time reducing costs.

Policy makers, political commentators, and activists on both sides of the aisle have renewed their focus on higher education costs and affordability.

Ronald Manahan, president of Grace College and Seminary, Winona Lake, Indiana, reviewed a number of efficiencies the college has been examining, including a three-year, more-affordable degree option.

Jane Wellman, executive director of the Delta Cost Project on Postsecondary Education Costs, Productivity, and Accountability, pointed out: “Tuitions are going up in part to replace revenues from state and local appropriations or because of declines in gifts or endowment earnings.”

Further, she continued in her testimony, “In 2009, among public institutions, tuition increases attempted to compensate for lost revenues from state and local budget reductions, but new revenues from tuition increases covered less than half of the reduction in state and local appropriations.”

Advisory Panel Calls for Streamlining Regulations

On Nov. 29, 2011, the ED's Advisory Committee on Student Financial Assistance released its final report, required by the Higher Education Opportunity Act (HEOA) of 2008, on streamlining federal higher education regulations.

Based on a comprehensive Web-based survey, public panels, hearings, and other extensive outreach, the committee concluded, “The overarching finding is that the higher education community perceives the regulations under the HEOA to be unnecessarily burdensome. Perhaps most important, the majority opinion is that improvements to individual regulations and the system will not only lower regulatory burden without adverse effects, but generate savings that can be used to expand student access and persistence.”

The report goes on to urge congressional leaders and the Department of Education administrators to take further steps to address “the feasibility of alternative approaches to the current system of regulation, including the provision of regulatory relief based on performance indicators.”

NACUBO CONTACT Liz Clark, director, congressional relations, 202.861.2553 @lizclarknacubo

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