Note: This transcript was provided by a third party service.
Mushtaq Gunja: Hello and welcome to dotEDU Live, the public policy podcast from the American Council on Education. I'm Mushtaq Gunja. I'm here with my co-host next to me.
Sarah Spreitzer: Hi Mushtaq.
Mushtaq Gunja: Hi, Sarah. Hi, Jon.
Jon Fansmith: Hey, Mushtaq. Hey, Sarah.
Mushtaq Gunja: How are you two doing?
Sarah Spreitzer: Good. I actually wanted to sit on the end and Jon made me take the middle seat, so I don't know how I feel about that.
Jon Fansmith: I showed her why. The reason why was-
Sarah Spreitzer: Why?
Jon Fansmith: ... so I could do this.
Sarah Spreitzer: But you're not going to do that.
Jon Fansmith: No, of course I'm not going to do that.
Mushtaq Gunja: No, our producers would not like that, but that was very funny. I enjoyed that.
Jon Fansmith: Visual gags. We don't get to do this a lot.
Sarah Spreitzer: Yeah, that's true. That's so true.
Mushtaq Gunja: This is good. As I told both of you a couple minutes ago, I'm very stressed. This is my high school son's graduation week And We have family coming in and that is what it is. I think they don't listen. And it's his prom tonight.
Sarah Spreitzer: Wait, you should have led with that.
Mushtaq Gunja: I will report back in a couple of weeks, everybody.
Sarah Spreitzer: We want pictures.
Jon Fansmith: Pictures on the feed for the podcast, right?
Sarah Spreitzer: Yeah.
Mushtaq Gunja: Yes, we will do that.
Sarah Spreitzer: In the show notes. [inaudible 00:01:15].
Jon Fansmith: And no way a violation of privacy.
Mushtaq Gunja: Friends, we are in a slightly different space today. We're on the second floor in the ACE conference room. We're here because we are here with the ACE Fellows. Fellows, say hi, everybody.
Audience: [inaudible 00:01:28].
Mushtaq Gunja: Love this. We are live-streaming this on YouTube. We hope some of our regular listeners are joining us there. This video will be available on YouTube after the session. It'll be released on all the podcast platforms as it always is in a couple of days. And speaking of, if you enjoy this podcast, rating and reviewing is a lovely way for us to be able to grow this audience, and so if you wouldn't mind. I was doing a higher ed podcast search a couple of weeks ago and we weren't right at the top and that made me sad.
Sarah Spreitzer: What? Who are our competitors?
Mushtaq Gunja: Hey. [inaudible 00:02:02].
Sarah Spreitzer: Wow.
Mushtaq Gunja: We're going to do about 40 minutes worth of discussion right now and then we're going to open it up to questions here in the room and really looking forward to it. So friends, big day, big couple of days in regulatory land. There have been some updates, well, a proposed update to the uniform guidance. So on May 29th, the Office of Management and Budget proposed a rule to, I think it's fair to say, majorly rewrite the uniform guidance, which sounds incredibly boring and is incredibly impactful.
The guidance is a set of rules and regulations that concerns the requirements for managing federal grants. It dictates how universities must administer funds, track cost, undergo audits. This is the guidance that helps us understand which expenses are allowable and reasonable. These proposed changes are important. They're going to affect basically all of our campuses. Sarah, why is this important?
Sarah Spreitzer: I have to start? I'm kidding. Okay. I would argue these are not in fact boring. They're very exciting. I brought along visual aids since we're publicly... And not because I accidentally printed out three copies, but at the end of this, I will give two of the fellows their very own copies of the new proposed uniform guidance. But Mushtaq's right, on May 29th, they introduced this very big document. It's 400 pages. This is double-sided of changing the way that the federal government is going to operate the grant making process.
So think about the peer-review process, think about the decision-making process, how the federal government kind of sets priorities for making of grants, how the government is able to terminate grants or not terminate grants. All of those things are contained within these 400 pages. And really, we were expecting this. This follows the grant making executive order that President Trump put out last year.
It also includes a lot of the other things in the executive orders that we saw with some of the early DOGE actions, the DEI executive orders, the gender ideology executive orders. All of that is contained in this new proposed regulatory text. We only have a 45-day comment period, which is problematic for something that's going to be so impactful on anything our institutions do that touch on the federal government. Kind of high level changes or proposals in here. It proposes to put all federal grants to move away from a fixed amount.
So when you apply for a federal grant now, whether it's through the National Science Foundation or the Department of Education, you apply for an actual amount of funding. What they're saying in this proposed rule is because they want more transparency, they want to see the actual costs of doing the research or the work funded by the grant, they will no longer fund fixed amounts, and rather it will be on the researcher or the institution to actually submit receipts for everything that they're spending their funding on for the grant.
Mushtaq Gunja: Sorry, can I stop you for a second?
Sarah Spreitzer: Yeah.
Mushtaq Gunja: Why is that a problem?
Sarah Spreitzer: Well, in this document, what the government is arguing is that it will bring more transparency on what federal dollars are actually being spent on because they will be able to see the receipts as opposed to providing you with an amount of money where you are saying, "I'm going to spend on A, B, and C." You are going to have to actually submit the receipts for A, B, and C to receive the funding.
Mushtaq Gunja: So that has to be problematic for our campuses from a planning point of view.
Sarah Spreitzer: It's going to be partly burdensome, more administrative costs. But then beyond that, it's also putting into regulation some of the things that the administration has been doing around the terminating of discretionary grants for discretionary reasons. The proposed regulation talks about the peer-review process actually only being advisory and that final funding decisions should be made by political appointees rather than a peer-review panel.
Again, the termination of grants is something that we've seen happen since the start of this administration that's been taken up by the courts. This would give them more justification for terminating grants. A new administration coming in saying, "I no longer want to fund grants in this area." They could suddenly stop it and it would be backed up by this uniform guidance.
Mushtaq Gunja: Jon, as I was skimming the 400 pages here, it seemed like there were a few things that jumped out to me. So the first is this thing that Sarah was just noting, this sort of broad termination authority, which I think allows theoretically the administration just to terminate any grant for convenience and not for cause. I don't know if that's exactly right, but that's at least one way that one could read it.
There's some mandatory E-verify that's in this guidance. They're trying to change this guidance from guidance to something that has more binding legal status, elimination of the fixed amount awards. And then federal funds are not to be used to, I'm going to, I think, quote here, "Promote, encourage, subsidize, or facilitate DEI activities." Jon, which of these struck you as important to all of them or probably important reactions?
Jon Fansmith: I mean, a lot of it's critically important in almost every area because I think, as Sarah pointed out, this is a fundamental reshaping of how the federal government will provide grants. That sounds drier than it really is. That makes it sound like the process is changing. Well, the process is changing, but the effect of the process is changing, is to say that there will be some entities that the federal government simply says are not qualified to receive grants anymore.
And the conditions, the criteria they will use to evaluate that, quoting from your language, "Fund, promote, encourage, subsidize, or facilitate DEI," their definition of gender as solely related to biological gender at birth. They also have language in there about, quote, "Any other initiatives that compromise public safety or promote anti-American values." You can run through the list of their definition of gender or what discriminatory DEI is or what's an anti-American value. What you can't find is a definition in the law of those things.
We know what racial discrimination is in courts and it's always up for debate and that's what the court system does. But in terms of what an organization is doing, what their policies are that would or would not comply with this, that's wholly within the determination of this administration. It's a subjective analysis of what they're doing. The laws have not changed in those regards. So it creates this very uncertain, chaotic space to say who should get grants.
And when you add the elements here, talked about that, before proposals for grants are issued, they have to go through political review and before awards are made, they have to go through political review.
The idea, especially in the hard sciences where you would have the idea of peer review, that the focus is the best possible science as determinative, that's all being pushed out the window. And this cascades across a number of other things. They've thrown a lot of things in there that really have nothing to do with federal grant making that your security fees for events on campus have to be the same regardless of the speaker and especially regardless of the risk that speaker might pose in terms of security. Not a shock. There are some controversial speakers who will attract protests. There's a lot of speakers in our college campus who can't attract an audience.
There's a difference between what you would need to provide, but they're saying it is discriminatory in an institution that doesn't have uniform policy there isn't eligible to receive a federal grant. This is a huge range of things being pulled into a process that historically has been provided by Congress with the idea of funding the best science, directing support to programs, entities that need it or that serve the national interests. And this is putting just such a heavy partisan glaze over all of it that we really are very concerned about what this will mean for the future of federal funding.
Sarah Spreitzer: Well, and it's also layering on kind of administrative policy priorities onto a process that has previously not been very political. So another section I would think in this rule is there's more restrictions on foreign partnerships. So any sort of partnership a US scientist or a US institution might be doing with another country. There's also some language in there that would apply an amendment that's been put on an appropriations bill for many years as a rider that applies to NASA. It was put there by a Congressman Frank Wolfe who had a lot of fear about China taking some of US funded research and it has previously only applied to NASA.
So any NASA funding is restricted from doing anything with China. It would apply that amendment to every federal agency and it's unclear how can you do that through a regulation, like take an appropriations rider and then put it into a regulatory package. So they've thrown a lot of things in here. It's going to take a while, I think to parse it out. We are hoping to have our summary out later this week. Again, we said 45-day comment period ACE will be leading community comments, but we are really encouraging institutions to also submit their own comments.
Because they've thrown so much in there, all of it won't impact every single institution, but it will be impactful to every institution in one way or another. And just looking at some of the summaries and what's going on, I would really encourage everybody to think about submitting institutional comments.
Mushtaq Gunja: I want to talk process and next steps in just a second. Before I do, so it sounds like this guidance will affect which institutions are eligible to get funds, will allow the administration just to pick who they like as a layer sort of politicization. It allows for the termination of contracts if the administration doesn't seem to like something that is there and it also affects what gets funded a little bit. Is that right? It's a little bit of everything?
Sarah Spreitzer: Yeah. And not just the institution but also the researcher, right? Because sometimes grants go to an institution and then go to the researcher, but sometimes they go to the researcher. So it's going to impact institutions as well as individual researchers.
Mushtaq Gunja: Jon?
Jon Fansmith: Yeah, just keep in mind that we are speaking, of course, from the higher ed perspective, this is for every recipient of federal grant funding. So this is across every executive agency. This is transportation, this is housing, this is healthcare, this is all of the areas under federal purview. The other thing is they are using language. It's not things they don't like, but what they've identified is criteria that are disqualifying in some cases and then have added this sort of blanket language that we've seen.
This is in many ways just codifying what the administration has been doing over the last year and a half, as I think you put really well at the start. They have, if it does not align with the administration's priorities, you can certainly see that there is some flexibility in law to administrations to fund their priorities, but when you get into something like this on the scale that they're talking about, the politicization of funding across at enormous scale of things we're talking about really becomes a problem.
Mushtaq Gunja: In a previous life, I was practicing attorney. I did government contracts work for a little bit and worked on bid protests, and any hint of politics really raised grounds for litigation. So we'll have to see what this all looks like on the back end. Before we get to the litigation piece, anything good in here? Anything as it relates to IDC or...
Sarah Spreitzer: Yeah. Well, so we were waiting for this because we had received word from the Office of Management and Budget that this was how they were going to implement the 15% cap to indirect cost rate negotiations. In the proposed regulation, it says because of the blocking language that Congress has put into the appropriations bills, they've backed away from capping indirect costs through this regulation. However, they plan to do a request for information and we'll look at other models around indirect cost rates. So I'd say it hasn't gone away, but that was the one bright spot is that at least it does not address indirect cost rates.
Now they do make changes to indirect costs at the edges. So one of the things is that there's a provision in here that says you can't use any federal funding, whether it's direct or indirect to pay for publication, which is going to be an enormous issue for our researchers who pay for publication costs through their grants and they're often required to move quickly to publication because of the open access policies of the federal government and to move quickly to publication means you have to pay a premium. And so that's going to be very problematic and again, a slight tweak to I think indirect cost rates.
Mushtaq Gunja: Sure. Definitely keep an eye on that. Jon, how has Congress reacted to the issuance of this guidance?
Jon Fansmith: So far, I mean, we're talking a matter of days and there's a lot of things happening in Congress right now that are at this point higher profile. What we've seen is generally the loud reaction is entirely from Democrats. There's talk about using a congressional procedure to nullify this. That's come from the Democratic side. The one thing we have seen throughout with this administration, especially around funding, is there's a lot of Republican concern with how the White House and the administration has handled funding. This has been a place where a lot of rank and file members of the Republican Party and both House and the Senate have stepped forward and worked with Democrats. The blocking language Sarah just talked about was bipartisanly supported.
So I think there's definitely some interest when you look at the scale and the scope of the disruption, this would be caused simply the idea of changing how you award scientific grants away from peer review and the best possible research. That's going to raise a lot of concerns. Now the problem is what can Congress actually do? That effort I mentioned, it's called a CRA, a Congregational Review Act bill. It would require passing a bill that goes to the president's desk to sign. The president will certainly not sign a bill nullifying his own OMBs regulations. So you would have to go back to the House and the Senate for a veto override.
In this Congress with the composition, it's highly unlikely there would be the votes to do that even with consensus around funding issues. That's a direct check to the administration's authority to manage their own agencies. The other thing is, and I think Sarah pointed out, the goal for this is to be implemented on October 1st, start of the federal fiscal year.
Sarah Spreitzer: I forgot to say that. Thank you.
Jon Fansmith: Well, then I'm glad I brought it up.
Sarah Spreitzer: Yes. October 1st.
Jon Fansmith: October 1st.
Sarah Spreitzer: [inaudible 00:18:21] your calendars.
Jon Fansmith: Nobody in Washington DC, including Congress, thinks they're actually going to finish the federal funding for next year by October 1st when they're supposed to. So there'll have to be a continuing resolution. The bill we've talked about a million times where Congress kicks the deadline down the road. One of the things they can do is add language to that to say, bar the implementation of these guidance.
That's the sort of thing where it's probably the last bite at the apple, Congress will have to keep it from taking effect, but it's a plausible path forward too because then it gets tied in amidst a number of other things, essentially keeping the government open, which means this will probably have less political pressure and opposition to blocking it. So there's an avenue there that I think is probably the most promising and likely one, especially given months of noise generating about the problems this will cause.
Mushtaq Gunja: And litigation is probably likely at some point, but let's hold on that while we see sort of what the next couple of weeks looks like. Okay. Sarah, you said 45 days. What is-
Sarah Spreitzer: I think it's 43 days now.
Mushtaq Gunja: But who's counting? What is that 43-day deadline? What is this? Is this sort of a time in which there's a deadline for comments? And then what happens after that?
Sarah Spreitzer: Yeah, so what's the deadline for comments? And again, I would just encourage institutions to think about submitting their own comments. I know the scientific societies are talking to faculty members about faculty submitting their comments. We want to see a lot of comments happening. And then once those comments, once you have them drafted, I would encourage everybody to share them with your members of Congress because again, the only way we're going to slow this down or really kind of engage in any sort of dialogue with OMB on this is through congressional efforts to push back on this, especially because it's moving so quickly.
Mushtaq Gunja: Sure. Okay. Well, I'm guessing we will talk about this in two weeks and talk about this in four weeks.
Sarah Spreitzer: Yes.
Mushtaq Gunja: Is this true?
Sarah Spreitzer: Every week until 45 days.
Mushtaq Gunja: I mean, this is big. I mean, I feel like the biggest thing that's come down the pike in the last few months, at least. So important for us to pay attention. Can I move us to accreditation?
Jon Fansmith: [inaudible 00:20:38].
Mushtaq Gunja: So one of the fellows in the room, Robert Heinrich, asked about ACE's current role in federal accreditation modifications. And if I'm following the news correctly, consensus was reached among the negotiators and the accreditation innovation and modernization negotiated rulemaking because consensus was reached, the department's now legally obligated to base this worth coming in PRM. On that negotiated text, Jon, what was agreed to in this consensus?
Jon Fansmith: Well, It's interesting. There was a lot. The first thing to keep in mind when thinking about this package, well, two things I'll say. One, most of the regulations we've been talking about have been required because the One Big Beautiful Bill Act passed with all these changes to loans and repayment and accountability and the department had to implement that. They had to do regulations because it's a new law, so there's new language to be interpreted. Accreditation was purely by choice, and this accreditation rulemaking really falls directly from the executive order around accreditation. So there's a range of things they were addressing.
Some of these are relatively non-controversial things about expediting the review process for institutions, enabling new accreditors to enter the field and what the process looks like, making that faster. Some things like allowing institutions to have two institutional accreditors at the same time, which both accreditors and institutions have thought for a while would be a good idea. So some of that very sort of normal rulemaking. The rest, of course, is where a lot more of the problems come in. The administration's belief that institutions are held in a political viewpoint capture that conservative views are neither allowed or suppressed on college campuses that made its way into this accreditors. There was language around accreditors requiring a review of institutions intellectual diversity, both in terms of curriculum and faculty.
There was language around transfer of credit. The administration believes along, let's be clear, with a lot of the public, that schools intentionally make it hard for students to bring credits with them to a new school and get sufficient academic credit for that towards their degrees. So there was language about mandating the terms under which schools have to accept credits earned at other institutions, at other providers. A number of things in this case that are far more controversial and some things probably pretty technical for this audience around the structure of accreditors themselves who can serve on accrediting commissions, who's allowed to be members of accreditors, who can comprise review panels and even the financial structure of associations and accreditors and what that relationship looks like. All very complicated.
In general, I will say the language given the fears that we had was not quite as bad as it could have been. The language on transfer of credit represented a real attempt at a compromise. There's a lot more burden shifted to institutions as part of this process, but it does ultimately preserve institution's ability to decide what they will accept. The language around intellectual diversity doesn't set a standard or define what that looks like. It simply requires accreditors to check for that as part of the review process. So there's a lot of flexibility with accreditors. You can look at this and say, okay, not as bad as feared, but I think in some ways, and that's where a lot of the discourse has been. It's really missing the main point.
The main point is that this effort as a whole is a really inappropriate overreach by the federal government to step into the business of accreditation and start dictating to accreditors what are the things they should be concerning themselves with. I don't know that I necessarily have a problem with accreditors thinking, is the curriculum on a campus a varied, informative, educational, appropriate curriculum that is part of what they're doing already. Does the federal government need to mandate that specifically on the topic of viewpoint diversity accreditors need to do that? No, and they shouldn't be doing that. That's a lot of what the problem is with this. It may not lead to these redline standards that I think people feared, but it's adding a lot of time. It's adding a lot of requirements. It's adding a lot of things that just frankly are not appropriate roles for the federal government.
And honestly, historically, Republican administrations have been the strongest in drawing these lines that the federal government should not be involved in curricular decisions, should not be involved in hiring decisions, should not be involved in the accreditor's really central role of quality improvement and institutional stability. So we are blurring the lines in a way that even if the regs themselves don't put hard lines in, what you've done is open the door for greater federal interference and that's a problem.
Sarah Spreitzer: Jon, you talked about the fact this is the third negotiator rulemaking that this administration's done for.
Jon Fansmith: That's the sixth actually-
Sarah Spreitzer: Okay, six.
Jon Fansmith: ... the four major ones.
Sarah Spreitzer: They've definitely kind of learned how to use this regulatory action to push policy forward. And I think this one, as with the OBB ones, they came to consensus. So wouldn't the administration say, "Look, we engaged with stakeholders, we reached consensus, we're all on the same page," or do you think the process was somewhat politicized?
Jon Fansmith: And that's such a leading question, Sarah, but I appreciate it. Yeah. So I mean, we haven't even talked about the process and it's worth talking for two or three minutes about the process and it's complicated. The Department of Education's rules for making new regulations are unusual in the federal government and the way the process works is if it is anything related to Title IV programs, federal financial aid programs, they are required to do a rulemaking session. They can do a rulemaking session for other issues, but they can also just do what most federal agencies do, which is propose a rule, give a notice, get comment, address those comments.
The rulemaking process involves the department selecting negotiators to represent key stakeholder groups. Those key stakeholders aren't defined in the law. So the department for each set of regulations identifies the groups they think are key and then the public is allowed to submit proposals, nominations of people they think should serve and the department picks who sits at the table. One of the things that Sarah was referencing is a big part of any negotiation is who's at the table. And this department has in ways, there's always been a little bit of gamesmanship, Republican, Democratic administrations, Biden administration certainly did some of this too, about who you are picking to represent different communities even within those communities.
This administration has really pushed the boundaries of that in terms of putting people who either A, I think could certainly be challenged as being key representatives of the stakeholder committees at the table as the leads or in picking people with viewpoints and perspectives they want to make sure are represented in the negotiations as part of that. So it's changed the nature of the debate. The other thing that this administration has very astutely to their credit used is the consensus model that the Department of Education operates under, which is to say you gather a group of 12 or 15 or 17 stakeholders, one of whom is a representative of the department itself who sits at the table and has a vote. And when you come to the end of the rulemaking session, you put the language that is on the table forward for a vote and everyone votes and you can vote up, you can vote down or you can abstain.
In a normal democratic process, you tend to think that consensus represents majority will. That is not the case with the Department of Education's process. For the Department of Education consensus means unanimity of the vote. No one can oppose or if everyone opposes, if one person supports, you have not achieved consensus. Keep in mind the department has their own vote at the table. What happens if they don't achieve consensus? Again, a reasonable person would surmise, "Well, we failed. We go back to the drawing board, we reconvene a new group, we try again." No, what the department's process is if they do not achieve consensus, the department has a free hand to write the regulations as they see fit.
So the department's one vote essentially gives them unilateral veto authority over what's presented. What's been interesting and different about the way they have conducted their rulemakings is they've made that power explicit from the start. At the start of the accreditation rulemaking, the department's negotiator who in sort of a break with tradition is a political appointee rather than a career department staff said, "These are very serious problems. We intend to address them. We take them very seriously." And quote, "We are going to do them with or without you." Now, when you're negotiating, you generally don't say, "It doesn't really matter what you think because we're coming to the table with our ideas and we want to implement them." You say, "We really respect your expertise and we want to get to this and these are the ideas we want to put forward for debate."
We've reached consensus in all those areas largely because the department has on issue after issue after issue through all these rulemakings, reached a conclusion, said, "These are the things we want to see. There are areas in which we've made concessions. If you don't agree with what we see as the final proposal, we will simply object and go back and write them the way we want. And by the way," and this is not me saying this, this has been reported in multiple outlets. All of these other things you each compromise on, whether it's protecting students' ability to stay within certain loan programs we're already in or other things that were negotiate at the table, we'll simply take those away. We don't have to abide by those in the absence of consensus.
So you can vote with us on this or you can give us the hand to do it the way we want to do in disregard of other accommodations that have been reached. So it is a very one-sided process and there's a little bit of an argument the department likes to cite that they have reached consensus in all these areas because there's certainly the broader implication is we convene different voices and we got to a resolution. It's not really what has happened. And we've seen abstentions and people changing their vote at the end under great pressure and duress from the department. So we are here, we have final language. And again, in this case, the final language has fewer major problems than we saw in some of the other pieces that have gone forward, but it is by no means the reflection of a positive co-equal meeting of minds on these issues.
Sarah Spreitzer: Well, sorry, Mushtaq. I was just going to bring it back to the OMB package of the proposed changes to uniform guidance. We're now in this time when these executive orders that we were all surprised at or thinking this is the policy they're going to push, what does that mean? That they're being implemented and they're being implemented in this very wonky way where when I try and talk to people about concerns with this package, their eyes just immediately start to glaze over. They're like, "Oh my God, a 400-page regulatory package. I don't care." It's kind of the same, right? My eyes glazed over when you were talking about accreditation, Jon.
Mushtaq Gunja: Her eyes often do when I'm talking.
Sarah Spreitzer: Why should I care? But I think this administration, which is very different from the first Trump administration, has really figured out a way to make the regulatory process work for pushing their policy priorities forward in a way no other administration has done before.
Mushtaq Gunja: Yeah. I think it's clear that Project 2025 they had a plan in a way that maybe they didn't in the first Trump administration. And Jon, I very much take your point. I mean, having been involved in a couple of the Obama administration negotiated rulemakings, the process couldn't... it feels quite a bit different now than it did then. What's the next step? So consensus was reached. We're now in notice and comment before there's a final rule?
Jon Fansmith: We are awaiting the department to publish their proposed final rule, which will then open a comment period much like on the uniform guidance would very much encourage people to take a look at what that final is. If you're on a campus, what the accreditors are looking for, what the accreditors will be held responsible for reviewing and speaking to about your campus's operations will absolutely have an impact on what your policies and procedures look like. The things you'll have to put time and attention and resources towards.
You have a stake in the outcome of these regulations, even if they are primarily targeted at accreditors. The reason the administration is voluntarily choosing to try to change accreditation is not because they necessarily have a huge long list of issues with accreditors. They have some very clearly, but because they are leveraging the accreditor's role as the gateways to federal financial aid to use them to leverage change on college campus.
Mushtaq Gunja: Yeah. And we should be clear. I mean, it's not like the accreditation process is perfect and doesn't have things that can be changed. I mean, we all have work that we probably need to do as a sector on transfer of credit. We're moving to outcomes-based accountability. I think we're supportive broadly of that. It's just a question of how much is all of that can be dictated with a one-size-fits-all strategy from the federal government. I think the strength of American higher education is our diversity. Our accreditors are closer. I mean, they're not accrediting all 3,900. No one accreditors accrediting all 3,900 institutions. I mean, they're close to our institutions. They know what they need.
Anyway, hopefully we'll see what that final rule looks like. We'll keep everybody updated on when the comments need to come in. I want to do two more quick topics, super quick, pretty quick. Workforce Pell. So Amy from UPCEA asked where are the greatest opportunities lie here? What's the latest on things happening in Workforce Pell?
Jon Fansmith: So Workforce Pell, I will say there's a lot of areas where I'm sort of fascinated what the impact of federal policy will be, and most of them make me sad. Workforce Pell is different, right? Workforce Pell is in some ways kind of a natural experiment that's playing out before our eyes. This is something where for 10 or 15 years, both Republicans and Democrats and most people in the higher education space have had an idea that this is a good idea, that there are ways to broaden the benefits of post-secondary education to people across the economic spectrum. And Workforce Pell holds that possibility. The problem was always, how do you make it work? And I think that's where this natural experiment comes in.
Democrats traded off the idea of opening it up to for-profit institutions in exchange for really rigorous criteria and a very complicated approval process. They wanted the tightest possible guardrails they could build. They've got that. That was the compromised position. The Department of Education's regulations around Workforce Pell frankly are about as good as they could do with the bill they were handed. I and I think a lot of other people are concerned that the take-up rate by institutions will be a lot smaller than we would've hoped, not because schools don't want to do this work, but because it's really hard to get one of these programs launched, especially initially.
I think we will see sort of a hockey stick growth around these programs, but for the first few years, you're not just going to have to surmount a bunch of hurdles to get it launched. You're going to be in this accountability process that is backwards looking where you won't necessarily start to see the data around, is the program meeting these goalposts until it might be too late. And schools are rightfully going to think about how do we prioritize our resources? Is the need strong enough? Is our ability to deliver good enough? So we're going to see this play out in a lot of ways. Now, look, there's a million hyperbole, but there's a lot of great programs that probably would qualify and some of them may not move forward as Workforce Pell programs, but there's going to be a lot of things that I think we're going to be talking about in a few years as really demonstrating the promise of this expansion.
Mushtaq Gunja: Sure. Are there examples of programs that would qualify for Workforce Pell? I mean, for our audience who isn't exactly-
Jon Fansmith: At specific-
Mushtaq Gunja: Yes.
Jon Fansmith: ... at specific campuses? Well, you're really putting [inaudible 00:38:21].
Mushtaq Gunja: No, no-
Jon Fansmith: ... [inaudible 00:38:21]
Mushtaq Gunja: Well, let me broaden it out. Just generally, what are the types of things that this program-
Sarah Spreitzer: Again, we'll give you $5 if you get this right.
Jon Fansmith: I don't think it's-
Sarah Spreitzer: ... I meant based on the competition that's going to happen at some point, God knows why, through the Department of Labor, but go ahead.
Jon Fansmith: I think there are things that very obviously lend themselves this. And I mean, looking at the Fellows, you may be aware of these programs on some of your campuses where there's been a clear partnership already established with a major employer and that might be you are training people to do the maintenance and repair on robots on a factory line. That is a specialized set of skills that doesn't always require a degree, but would also lead to high paying employment directly with that credential in hand and where you can take people, especially people who have been working in other capacities in manufacturing or small motor repair or things like that and move them through relatively quickly with a specific set of skills that leads them to employability.
There's a range of fields where that works too and certainly skilled trades, those are all areas where that will happen. And just in a lot of these cases, what you need is that existing infrastructure. You need to have that part or you need to have a recognition at the state level that is serving a vital skill area. You need to have enough and certainly right now there's some economic headwinds people are dealing with in a range of areas across this country that make investments a little bit more challenging, but those exist and we know they exist.
Mushtaq Gunja: Putting my classifications hat on, we think there has been a significant growth in certificate programs. We're pretty sure there has been. We haven't been tracking it extremely well and so it'll be good for us to be able to get some of these programs tracked out and very excited to see what this all looks like Workforce Pell-wise. Since Sarah is sipping, I'm going to take the opportunity to ask about college athletics.
Sarah Spreitzer: Oh no, come on, I'm done. That's your last question. College athletics?
Mushtaq Gunja: Before we bring-
Sarah Spreitzer: We have questions.
Mushtaq Gunja: ... Before we open it up to the fellows who will I'm certain ask you and only you a bunch of questions about-
Sarah Spreitzer: Okay, good. I mean, I have opinions about college athletics.
Mushtaq Gunja: Do you?
Sarah Spreitzer: Well, I know that there-
Mushtaq Gunja: Hey, Sarah-
Sarah Spreitzer: ... is a House bill called the SCORE Act, which is not doing very well.
Mushtaq Gunja: It is stalled it seems.
Sarah Spreitzer: And then there is a Senate bill by Senators Cantwell and Cruise, which is bipartisan. I forget what it's called.
Mushtaq Gunja: It's called the Protect College.
Jon Fansmith: [inaudible 00:40:57]. Oh, Mushtaq.
Mushtaq Gunja: Oh, no. I'm sorry.
Sarah Spreitzer: Oh. And that the one thing it does not address is it does not address the issue of student athletes as employees. And so
It seems to me we're at an impasse. The House can't pass their version. The Senate has a bipartisan version that leaves out a very important piece.
Mushtaq Gunja: Sportster, you've done-
Sarah Spreitzer: So where are we?
Mushtaq Gunja: ... extremely well.
Sarah Spreitzer: [inaudible 00:41:22]. Thank you.
Mushtaq Gunja: I think it's the Protect College Sports Act. Fansmith. Is that right?
Sarah Spreitzer: Yes.
Mushtaq Gunja: And it is bipartisan. I think there have been four senators who are co-sponsors, Cantwell, Coons on the Democratic side, Cruz and Schmidt on the Republican side. So that was exciting. It tackles some but not all the same things that the SCORE Act does. What are we trying to accomplish here? What's the problem that's trying to be solved?
Sarah Spreitzer: Yeah, what are we trying to accomplish?
Jon Fansmith: It's weird because it seems like to outside observers, college sports is going great and there's no concerns with what's happening in that space. No, this is one that, and we've said this every time it's come up, there is so much bipartisan congressional interest in doing something about collegiate athletics and there's a couple of big reasons why. One, it's incredibly visible, March Madness, College Football, all of these things are very much in a popular mind. You see reports about the amounts of money now that NIL has opened up and the public has a real interest.
The other thing, of course, that makes it really a uniquely federal issue is part of the lack of consistency in how the rules are applied across different conferences and across different campuses and across different states is just that I think something like 30 plus states now have their own rules regarding how NIL contracts can be handled within those states. That gives some states a competitive advantage or disadvantage relative to others. The NCAA, because of court actions, is essentially unable not only to enforce their own rules, but in many cases enforce the terms of the agreement of the House settlement that they reached because state laws will contradict that or court decisions have contradicted those terms and conditions.
So it is the kind of place where federal intervention could actually step in, set level-playing fields across all levels. The other thing that I think is a big factor and sometimes gets lost in the Washington discussion is we talk a lot about college sports in terms of March Madness and women's and men's college basketball and collegiate football. That's a tiny fraction of the institutions who have collegiate athletics and trying to find a balance in the rules that preserves all of collegiate athletics for the purposes that institutions offer them is the kind of thing that a thoughtful federal policy could actually significantly help with.
So there's a lot for Congress to do there, but as Sarah astutely said, we've reached this point where there's on big issue between the House and the Senate. That issue is whether college athletes can be considered employees of an institution. The SCORE Act in the House explicitly says college student athletes are student athletes. They're not employees. The Protect College Sports Act does not say anything about the employee status of college student athletes. Without addressing that, Chairman Walberg, Chair of the Educational Workforce Committee put out a statement saying there's no path through the House for the Protect College Sports Act unless it addresses that issue.
Part of the reason very clearly there was bipartisan compromise in the Senate and the bill was introduced was because they omitted addressing that issue, which would raise concerns, especially on the Democratic side. So we are very much at an impasse despite, I mean, quite literally billions of dollars, millions of viewers and a lot of news inc and political interest on this issue right now looking for a solution.
Mushtaq Gunja: Thanks. It seems like I agree a federal intervention here on name, image, likeness, some of the transfer policies, I don't know that they'll exactly tackle the conference realignment stuff, but man, that has made life complicated and has probably really taken a lot of airspace and head space for our leaders as they figure out which conferences they're going to go to. And this is not just at the Power Five conference level, but all throughout our ecosystem. So stay tuned.
Well, thank you, Jon, Sarah. Holly, I wonder if any of our fellows have any questions. I'm sorry that we weren't able to tackle all of the very interesting, nitty-gritty topics, but I'd love to do some big picture stuff or anything smaller. And if you wouldn't mind introducing yourself, that'd be great.
Tamara Stevenson: Hello, my name is Tamara Stevenson. Thank you for this conversation. Here's my question. Beyond formal policy changes, the federal government's use of scrutiny, funding pressure and enforcement uncertainty appears to be shaping institutional behavior in powerful ways. Many colleges and universities are not only responding to actual requirements, they are anticipating scrutiny, managing flashpoints and adjusting public-facing practices out of fear of penalty or escalation. How do you see this dynamic continuing and what would it take for higher education to move from reactive risk management toward a more independent mission-centered posture?
Mushtaq Gunja: What a great question. Sarah, why don't you go first then, Jon? But yes, Tamara, no doubt we've been thinking about the sort of worries around pre-compliance really for 18 months.
Sarah Spreitzer: And I don't think it's just about pre-compliance with policies. First of all, I don't understand how any college president does it these days because they are really facing a host of issues. And I think when looking at policies, I think about the ones that are impacting really the bottom line for our institutions, our loss of international students. For the most part, everyone has seen their international student enrollment go down. Some institutions after kind of doubling down on recruitment, so that's going to cause you to kind of strategically change your enrollment strategies and some of those things.
I think about the fact that on the research side, you see a lot of the STEM schools pausing recruitment of PhD students or graduate students, which is having a huge impact on that next generation of scientists because they're planning to go get a PhD. Suddenly that space is no longer there because the institution is like, "We're not certain of how federal funding is going to flow in the next couple years, and so we can't support graduate students or at least we're going to pause." You could say that that's reactive, but I also think that that's trying to acknowledge the moment and keep the institution strong.
I often think about our institutions during COVID when they had to kind of do a lot of pivoting and plans that were being made perhaps to build a new research facility, to build a new dorm had to be put on hold because all of a sudden all of your resources were going to putting everything online. I don't think that gets to all of the issues that I think a lot of our institutions are being reactive to, but I really think that this is a time that they are looking to survival mode for many of their institutions.
Jon Fansmith: Yeah. I think probably I'd offer just a variation on what Sarah said and I will start with the leadership of institutions have an obligation to those institutions, first and foremost, and they are responsible for the students on their campus and the faculty who teach on their campus and the staff who support the students and the faculty and pursue their mission research and otherwise. This administration has very intentionally introduced uncertainty and heightened risk into the environment of running a college and a university. And it is not the most uplifting thing to say that an institutional leader looks at this environment and reasonably concludes a risk assessment of what is being threatened versus what do I need to minimize my risk? And we don't really ever challenge that conclusion when it comes to something like what are our policies around a late night shuttle bus or something like that.
But when it is an issue where the divides are really driven by these very partisan politically driven motives, you want to see a reaffirmation of the core ideals and look, we all do, right? It's one of those things where I can't wait for somebody else to stand up on my behalf. As Sarah said, I don't know how college presidents do it. This is tremendous pressure. I've also noted often this administration has really astutely targeted the gray space in federal law and federal regulation and what guidance can mean, often in ways in which they exceed the boundaries of the law knowingly, not because they think they will win, but knowing they will lose, but in the interim institutions, and this is true across other areas, but certainly for higher ed, will see the fear, will feel the risk, will see the increase and will...
I wouldn't even argue it's pre-compliance, it's complying with a shifting environment, knowing that maybe the legal environment will change six months, nine months down the road, but you've already done some things to keep yourself from getting attacked. That is functionally what the administration wants. They can accomplish their goals even if the law doesn't support the way they pursue it.
Jerome Rotich: Good afternoon, Jerome Rotich, Indiana University, Bloomington. My question is how do all these policies impact international partnerships, scholars, students, and how should we be navigating these and what are some of the examples that other institutions and what are they doing to navigate? And I'm a little confused because I just came from Kenya and the United States is setting up an Ebola center for Americans in Kenya, but at the same time, they're cutting all these collaborations that we... I'm getting all these mixed reactions. They want to do things with international communities, but at the same time, they're really restricting what we can do. So what and how should we navigate moving forward?
Sarah Spreitzer: Yeah. So I think much of this goes back to... We've been talking a lot about executive orders, but one of the first executive orders that was signed by President Trump was on this America First foreign policy and really it's about thinking about America first. So if you're thinking about a partnership, what does America get out of it before you think about how any other country is going to do with this partnership? And I think I see that in a lot of the international policies going forward. In fact, it's called out in the changes to uniform guidance about partnering with foreign entities. And I think then you pair that with the overall efforts to limit immigration to the United States through some of the policies coming from the US Department of State and from the USCIS.
And I think together that is more of, I don't want to say isolationist, but we've really pulled back I think on many of our global partnerships, but I don't think our institutions have pulled back. So what I've seen is governments and institutions partnering with institutions rather than going to the state department to do their science and technology agreement, they're partnering with states, they're partnering with individual institutions. I've seen institutions saying, "We will help you navigate the confusing issues of US immigration policy and we will support you where you are. If for some reason you're unable to come to the US, perhaps you can start your education at one of our global campuses or you can later transfer in."
And so I think it's going back to our institutions and then I would just say I've seen the states doing a lot of interesting partnership with other countries where institutions are coming together to work with their governors to talk about how they can partner with other countries.
Jon Fansmith: No, I mean, I wouldn't add a whole lot to that and certainly this is Sarah's area of expertise. The thing that has really struck me though is we've completely inverted what was always an understanding of how we should engage in the world, which was two things to our advantage. We bring the greatest researchers and faculty to America to teach and advance our knowledge. And now there's this presumption that engagement internationally, any sort of partnership with an international actor is somehow suspect until proven otherwise rather than what I think has always been the enormous countries to say engagement is to our benefit.
And yes, there are times there are research concerns, there are security concerns, but those are the anomalies. Those are the exceptions that need to be addressed. We've flipped it to this idea that we should only engage internationally under the most limited, targeted, restricted of circumstances. And that's really not a healthy place for this country, which has been fueled by our engagement and are benefiting from bringing the best and the brightest in the world here.
Sarah Spreitzer: Just a quick example, I've had conversations with researchers from other countries where they've talked about how the US kind of pulling back from these partnerships has caused other countries to think about kind of having their own science strategy and driving their own scientific research agenda. Previously, the US was driving everybody's agenda, right? Everybody was working on the priorities that we set and now countries are kind of like, "Well, the US isn't there. They're not at the table. And so we're going to go off." And so now the US is going to those countries.
So as opposed to us being the leaders, we're now kind of sitting at the table where we can, but I think much less engaged. But I think other countries are not waiting for us. We've already sort of started to see them shift to keep more of their domestic students, to set their own scientific agendas, to try and partner with states. All of those things are already happening.
Bob Heinrich: Hi, Bob Heinrich from Thomas Edison State University. Given the significant federal student loan changes that are set to take effect July 1st, including the elimination of the Graduate PLUS Loan and the limitations on borrowing for certain academic programs at the master's and doctoral level I was curious in terms of what ACE's assessment is in terms of the likelihood that any of these provisions may be modified, delayed or revisited in the future through regulatory actions or additional legislation and how should institutions respond in anticipation of what may or may not occur regarding this sort of new environment and how can we best advise students related to that?
Jon Fansmith: Yeah, and that's a great question. In some ways, the things that are most clear at this moment are probably the least helpful to campuses. There's a clear political consensus that the Department of Education overreached and how narrowly they drew the definition of professional students and thus, only 11 programs at the higher loan limit. There is legislation in Congress, bipartisan legislation that would amend that definition. Interest behind it grows the more the department talks about it because their argument's not particularly compelling. And so there is a legislative vehicle to address that.
There's also been two separate lawsuits that have been filed against the Department of Education, one by a grouping of primarily blue state attorneys general and then another by two associations that represent nurse practitioners and nursing assistants. There will likely be yet another lawsuit, maybe more beyond that on behalf of educators and others. So there's a lot of reason to believe that this regulation as the department finalized it won't make it all the way to the finish line and that at some point a definition of professional and graduate will be amended, whether that's through legislation or through a court order determination that they have to reregulate on it.
That said, what do you tell your campuses? This takes effect July 1st. We're less than a month out from these changes going into effect. Most campuses are relying on this definition now to advise students as to what their lending abilities are, both in terms of current grad PLUS borrowers who will have some eligibility but in some cases may not going forward and what new students will be able to borrow. The reason I said that's a less clear picture is because right now we do have two soon to be three legal challenges. We do have express disagreement from Congress as to how the department made this interpretation. What we know is that we're in a different legal world where nationwide injunctions aren't as frequently granted. We don't know the terms under which a judge may rule and who that relief may apply to.
It's entirely possible to apply to some institutions and not others. It's entirely possible may apply to some programs and not others. We simply don't know. So to advise your students, the only thing you can advise them at this point is what the regulations and the law says and knowing that that is very likely subject to significant change in the near future. So it's a really murky... And think about all of you, the times you went through graduate studies, it's a huge decision. You might be relocating, you're making an enormous financial commitment, you're entering in most cases, a career that will define your life path. Having this level of ambiguity about your ability to finance it and what it means is enormously distressing and concerning. And I think natural experiments that scare me, I talked about earlier, this is one. I think we are going to see really dramatic shifts in graduate enrollment in the next academic year and we just don't know exactly what they will look like.
Mushtaq Gunja: I think from an ACE perspective, I think we're really going to need to collect as much real time data from every one of your institutions about the effects that these changes have had, what the drops in enrollment are, what the community impact is. If you don't have nurse practitioners, if you don't have others that are actually out there, if there are holes in the workforce, that's going to be a significant problem. I think Congress is coming around to this and as much data as we can possibly have, I think the better. I think we might have time for one more question. We've got a mic right here.
Margaret Shaddell: Margaret Shaddell, Stony Brook University is my home and I'm at Hudson County Community College for my placement. And we've talked about this before that the chaos is the point, but is there going to be political will to close the loopholes so that future administrations cannot just create this chaos or will each party think, "Well, when I'm in power, I am going to want these loopholes"?
Sarah Spreitzer: We've talked about this internally in our office that it is going to be... What we've seen is most administrations build on whatever the previous administrations have done. And even executive orders, I mean, that's been used by the previous administrations as Congress has been deadlocked both by the Democrats and by the Republicans, but they've never been used to the extent as the Trump administration. And I think about negotiated rulemaking and if other administrations had been able to run negotiated rulemaking as the Trump administration has done it, I think they'd all want to do that. So if the president is set, how do we go back to it? And I don't know how we get to that. I think some of it is going to be looking at these processes and trying to figure out how to take them back to a non-political kind of stance, but I don't know how you do it.
Jon Fansmith: Yeah. I would say the positive take here is that this is not new. We've done this in multiple periods in our past, most recently post-Nixon where there was bipartisan interest in limiting the power of the executive branch because numerous abuses across funding, across policy, across abusive use of federal investigative authority all pushed Congress to both reassert their own primacy in the Democratic process and also rein in abuses that had been demonstrated. And we did this in the Progressive Era. This is not new to us. That said, we're in a weirdly different political world in that regard where we have structurally built a Congress in which only a narrow slice of the middle is actually up for debate and most members of Congress are incentivized to move to the extremes rather than the middles.
So even saying, look, we're Congress, power of the purse is ours, is something that Republicans..." Once a Republican administration will say, "We're happy to give this authority away to our boss." And Democrats will rage against it, then Democrats will come in. To Sarah's point, nobody wants to give up the powers. And once the norms and the precedents have been broken, you've greased the path for the next group to say, "Well, we've got to undo all the damage they did. They were so clearly wrong, so far over the line, we need this extraordinary authority to make it right." And both parties believe that's what they're doing. I do think there are some encouraging signs.
I do think funding issues are the sort of thing where Congress has in a bipartisan way said, there is a bridge too far for us because I might have to move to the extreme rhetorically, but if they're cutting funding my district, it won't really matter. I'll get primaried anyway. So there's some interest in curtailing the administration's authority, but look, the reason on a lot of these cultural issues the administration is pursuing is because it's their narrative to their voters and they don't see a reason not to do that. There's a reason the president isn't moving away from his rhetoric on a lot of things, even as its popularity goes sub 35%, that still works with the base and that's going to be true on the other side as well. So I had an optimistic moment at the start not ending there.
Sarah Spreitzer: We may start seeing bills written in a different way to restrict the authority of the executive branch to make changes to what Congress is passing, like more guardrails. And Jon's-
Jon Fansmith: [inaudible 01:05:39].
Sarah Spreitzer: Okay.
Jon Fansmith: Can't wait to jump in. No, I mean-
Sarah Spreitzer: Yeah. Come on, Jon. Tell me how the guardrails don't work. Just drive it off the cliff.
Jon Fansmith: Well, I think the lack of guardrails is intentional. And this is part of the problem. We've seen-
Sarah Spreitzer: But we're going to bring them back.
Jon Fansmith: We've seen for 20 years that Congress gives bigger and bigger gray areas in law because they can't find agreements and they've relied on the executive branch to fill in the gaps. And so far executive branches have played at the margins and pushed boundaries. This one has blown through the barriers. I think it's made it very clear to people on both sides that they are abusing the gray space, but the gray space was put there by Congress because Congress can't get a bill passed. That's very narrow and specific.
Sarah Spreitzer: But you think of the policy riders, right? Which go in every year.
Jon Fansmith: Which are very narrow.
Mushtaq Gunja: Do you see what I have to deal with here?
Jon Fansmith: [inaudible 01:06:27].
Sarah Spreitzer: [inaudible 01:06:27] that are very narrow. And maybe we're going to see more of those. Okay. Sorry, Mushtaq-
Jon Fansmith: Sorry.
Sarah Spreitzer: ... what do you think?
Mushtaq Gunja: I'm slightly more optimistic about all of this, at least partially because I think this administration's slightly unique and this department seems slightly unique in terms of how they view our colleges and universities who I think they think are fundamentally broken, but I don't think that that's been the case for the last 20, 30 years. I mean, of course our institutions can do better. Of course, there are places for reform, but I think the next administration, be it Republican or Democrat, it's probably going to come in with a different mindset and view.
So do I think the next one will push as far as this one will? I'm optimistic that they won't, that we'll go back to a place where we're sort of arguing over sort of more defined set of prescribed arguments and not just pushing things in crazy ways. But I could be wrong about that, obviously. All right, friends, this was lovely. What wonderful questions. Thank you so much for asking. Thanks everybody that's watching live and for those of you who are listening on the podcast. I'm going to wrap us up here, but we'll be back in a couple of weeks talking no doubt about uniform guidance.
Sarah Spreitzer: More uniform guidance.
Jon Fansmith: [inaudible 01:07:41].
Mushtaq Gunja: And I will try to, I don't know why I didn't sit in the middle of Jon and Sarah.
Sarah Spreitzer: Yeah, really.
Mushtaq Gunja: That would've made much more sense so I can keep these two apart. Thanks everybody for listening. We'll see you next time.
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