Shutdown Looms as FY 2011 Spending Plan Remains at Stalemate
House GOP FY 2012 Budget Plan Would Slash Student Aid
White House Calls Meeting to Discuss Education Budget and Pending Regulations
Education Department Launches Initiatives to Safeguard Student Privacy
IN BRIEF: Office of Civil Rights Letter on Sexual Violence; Associations Respond to Administration's Innovation Strategy; Apply by April 15 for ACE's Institute for New CAOs
The big news in Washington this week remains the budget: The deadline for finalizing a spending plan for the remainder of FY 2011 is tonight at midnight, and the prospects for a compromise look dim as I write this. At this point I would say the possibility of a federal government shutdown is strong.
House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV) have met with President Obama throughout the week to try to hammer out differences between House Republicans and Senate Democrats. These differences primarily come down to policy divisions rather than funding considerations. More than 50 "policy riders"—including environmental regulation, Planned Parenthood funding and abortions in the District of Columbia—have hampered efforts to find common ground. However, talks are continuing, and Democratic leaders have not ruled out accepting some of the proposed riders.
If the government shuts down, we hope it will be for a relatively brief period. If it is, there should be no long-term consequences for students and campuses. What you can expect: processing new applications for student financial aid will be delayed, federal oversight of colleges and lenders will lapse, and work at the Department of Education—including plans to release the final gainful employment rule—will halt. The department today released guidelines on federal student aid communications and general departmental policies in the event of a shutdown. (See The Chronicle of Higher Education for a rundown of what happened in 1995 during the last government shutdown—although because systems are now more automated, even less disruption is likely.)
At any rate, we will all soon know the direction this will take. The House passed yet another short-term spending measure yesterday to buy additional time, but President Obama has said he would veto that particular bill if it gets to his desk. More news next week.
Looking ahead to next fiscal year, which promises to be even more contentious, House Budget Committee Chairman Paul Ryan (R-WI) released the Republican's FY 2012 budget plan on Tuesday, which was promptly approved by his committee on Wednesday by a vote of 22-16.
Although it will not succeed in the Senate, if enacted, the plan would impose major changes on key government entitlement programs and sweeping cuts in domestic spending, including student financial aid. Specifically, it calls for cutting spending $6 trillion over a decade, restructuring Medicare and Medicaid and overhauling the tax system. The proposed budget would scale back Pell Grants to their pre-stimulus appropriations, which means reducing total funding for the program back to FY 2008 levels. (For more information on the proposal, see this analysis by the Senate Budget Committee.)
The Ryan proposal alleges that Pell Grants make higher education less affordable and less accessible—a hypothesis that has been repeatedly proven wrong (see the Student Aid Alliance news release for more on that issue.)
On Tuesday, a small number of higher education associations met with senior White House aides and top Department of Education officials to discuss pending higher education policy issues, primarily the financial challenges facing the Pell Grant Program.
We all know the recent economic downturn has put great pressure on federal student aid programs—especially Pell Grants. In the 2007-08 academic year, there were 5 million Pell Grant recipients, and the government spent roughly $15 billion on the program. In 2012-13, there will be an estimated 10 million recipients, and the program will cost nearly $44 billion.
In light of the concern about the federal budget deficit, Democrats as well as Republicans have indicated that major changes in the program to reduce costs are inevitable. But we would like these changes to spring from a serious, bipartisan discussion, given that Pell Grants have traditionally enjoyed support from members on both sides of the aisle who are concerned with providing access to higher education for low-income students and families.
There are essentially two ways to address these challenges. First, the maximum grant could be cut significantly, thus reducing total expenditures while keeping the same number of beneficiaries. Alternatively, eligibility criteria could be changed to reduce the number of individuals who receive grants (and to shrink the size of the grants going to some recipients).
In his FY 2012 budget (for the 2012-2013 academic year), President Obama advanced a set of ideas to modify eligibility criteria and to make other policy changes designed to ensure that the current maximum award is maintained. At the Tuesday meeting, the administration briefed us on their plan—known as the Pell Grant Protection Act—and asked that we give them our views of the proposed changes by the end of next week. My colleagues and I will do so.
In addition, we briefly discussed the Department of Education's pending regulations related to the federalization of credit hour and the new state authorization regulations. We once again underscored the huge problem that these regulations would cause for campuses and accreditors if they take effect on July 1 as currently scheduled. The department continues to recognize our concerns but has not yet agreed on changes to reduce or eliminate them.
If we cannot find a compromise with the department we will ask Congress to block both regulations. This is a central issue of concern to all institutions, and I will keep you posted.
The Department of Education this week announced a series of initiatives designed to safeguard student privacy while clarifying that states have the flexibility to share school data when necessary.
The department today released a Notice of Proposed Rule Making (NPRM) under the Family Educational Rights and Privacy Act (FERPA). The department says the proposed regulations would give states the flexibility to share data to ensure taxpayer funds are invested wisely in effective programs while increasing accountability for institutions that handle FERPA protected records. You may submit comments on the proposal until May 23, 2011 at www.regulations.gov.
The department also has hired its first chief privacy officer and established a "Privacy Technical Assistance Center" to serve as a resource on privacy, confidentiality and data security issues. The Center has already started a series of technical briefs on the best practices of data security and privacy protections, with three new briefs posted on the National Center for Education Statistics website. We will review all of this information and update you soon.
The Department of Education's Office for Civil Rights (OCR) released a Dear Colleague Letter on Sexual Violence this week in conjunction with Vice President Joe Biden's speech on the issue at the University of New Hampshire. According to OCR, the letter is intended to remind campuses of their responsibility to take immediate and effective steps to respond to sexual violence in accordance with the requirements of Title IX. Just last week, the OCR said it would begin to investigate allegations of sexual harassment at Yale University (CT). The Education Department did not seek comments from institutions before issuing the guidance and has advised that it is final, but we urge institutions to review it carefully and provide us with comments that we may share. You may direct remarks to ACE General Counsel Ada Meloy at firstname.lastname@example.org.
A group of five higher education associations, including ACE, submitted a memorandum on April 1 to the Department of Commerce in response to the agency's request for comments on the President's Strategy for American Innovation. The joint statement emphasizes that sustained and stable research funding must be a part of the national innovation strategy. It also discusses the need for increased gap and proof-of-concept funding to assist in moving ideas from universities into the marketplace.
The ACE Institute for New Chief Academic Officers, designed for CAOs in their first three years on the job, is accepting applications through April 15. The Institute is a yearlong program with three sessions that provide practical executive leadership development. Each session is highly participatory, using a combination of discussions facilitated by experienced CAOs and presidents, case studies presented by program participants, conversations with peers from similar and diverse institutions, and briefings by national experts. Please encourage your CAO to apply.
Molly Corbett Broad
President of ACE