Jon Fansmith: Hello, and welcome to
the May edition of dotEDU Live, our monthly policy discussion. I am
your host, Jon Fansmith, and joining me today is my wonderful co-host, Sarah Spreitzer. Sarah, how are you doing today?
Sarah Spreitzer:
I’m doing great. I’m loving this new live format. I think it’s a great
way to interact with folks. I’m still recovering from the annual
meeting, where we did two live podcasts, and that was really great. And
more importantly, I’m recovering from a vacation that I took after the
annual meeting. So just catching up on stuff this week, seeing what’s
going on, so did I miss anything big while I was out of the office, Jon?
Jon Fansmith: Yeah, and you were very out of the office, Sarah. Do you want to tell people where you were vacationing?
Sarah Spreitzer: I was in France. Are you going to ask me to say something in French? Because I really can’t do that.
Jon Fansmith: No,
I wouldn’t ask. I just want to emphasize that you and another one of
our colleagues was also in France immediately after the annual meeting,
while I was here, so I don’t, I just-
Sarah Spreitzer: Sorry about that.
Jon Fansmith: There’s a fairness issue.
Sarah Spreitzer: It was a good time to take vacation though. Definitely.
Jon Fansmith:
It sounded like a good time to take vacation. But, Sarah, I don’t think
people want to hear me complain about not taking vacation. They
probably tuned in because they want to hear a little bit more about the
things we told them we’d be talking about, which is what’s happening-
Sarah Spreitzer: Oh, yeah, that’s right.
Jon Fansmith: Yeah, right, those things, what’s happening here in Washington. So what’s happening here in Washington?
Sarah Spreitzer:
Well, I believe that the House Republicans passed some sort of budget
bill while I was gone and attached it to a debt limit increase. So
anything interesting in there?
Jon Fansmith: Yeah,
so this is big news, right? This is frankly what Congress really is
only focusing on at this moment. Stepping back to your point, the House
Republicans passed a debt limit bill that would essentially raise the
debt ceiling by $1.5 trillion or extend the debt ceiling to March,
whichever comes first. In order to do that, they wanted to offset it
with about $4.8 trillion in cuts. So pretty significant cuts proposed.
Couple things that are interesting about it. The first is that we are
looking at fiscal year ‘24. We’re currently in fiscal year ‘23. Now I
always forget what the name of this bill, Save Limit Grow? What was the-
Sarah Spreitzer: PAYGO? No, I don’t think-
Jon Fansmith: The House bill has a-
Sarah Spreitzer: I was on vacation.
Jon Fansmith:
Fair enough. Anyway, it would take back spending for FY ‘24 to FY ‘22
levels. And if you go back to the FY ‘22 levels, there were big
increases in FY ‘23. It’s about a $130 billion cut in funding, and all
of that cut would come from the non-defense side. So there are increases
to defense, increases to non-defense, but the cuts would come entirely
from non-defense. That would be about a 22 or 23 percent cut, depending
on which estimates you’re looking at. That would be massive cuts to the
programs we care about. Things like student financial aid and scientific
research and institutional support. Beyond even those massive proposed
cuts, the bill would say that federal spending could only grow by 1
percent each year for each of the next 10 years. That’s far below the
average of annual increases Congress puts forward.
And then
really, maybe the thing that was most interesting is how much of this
bill focused on higher ed specifically. There were really five big
components of the bill: the limits on spending; rescinding money that
hasn’t been spent yet, that was COVID relief money that was sent out;
rolling back a bunch of green energy tax credits and programs; things
around limiting social benefit programs like SNAP, essentially tying
eligibility to those programs to more stringent work requirements and
expanding the ages at which people have to participate in those. So
really five things; those are the other four. The fifth was higher ed.
And
there was a lot on higher ed there, and it’s really reflective of how
strongly congressional Republicans dislike what the Biden administration
is doing around student loans. This bill would propose that the student
loan forgiveness program, which is currently awaiting a decision by the
Supreme Court, it would bar that from going forward. It would bar the
administration… The Department of Education has a proposal for
income-driven repayment program that would be the most generous loan
repayment program out there. It would bar that from going into effect.
It would end the student loan repayment pause, so that’s set to resume
likely around the end of August. It would end that immediately.
And
then one thing that’s kind of unusual and pretty interesting: it would
also bar the Department of Education from doing any regulations that
increase the cost of the student loan program. So anything that would
make the student loan programs more generous, they would be barred from
doing. So as you can see, not just this heavy emphasis on higher ed, but
a really tight focus on limiting what the Biden administration has done
on student loans.
Sarah Spreitzer: Well, and
thanks to our wonderful colleague, Amanda Wintersteen from Penn State;
she reminded us that the bill’s called the Limit, Save, Grow Act. And,
Jon, we saw the president released his budget early in March. Now we
have the Republican budget. Does any of this actually matter?
Jon Fansmith:
Yeah, so it matters for a couple reasons, and I think in some ways I
buried the lede here a little bit. The reason we care about the debt
ceiling limit is there’s lots of reasons to care about this. There’s
global economic implications beyond even the House proposal, which has a
big impact on higher ed. Most importantly, we don’t have a whole lot of
time, right? Yesterday, Treasury Secretary Janet Yellen said that they
believe the X date, the date at which Treasury’s ability to keep meeting
our obligations through so-called “extraordinary measures,” that date
is June 1st. So we hit the limit on June 1st according to Treasury. No
need to remind folks, today is May 2nd. That’s not very far away.
The
other thing to keep in mind is the president has put forward his
proposal. What he said is just raise the debt limit. They did it three
times. Congress did it three times during the Trump administration with
no ties to spending cuts or anything else. Just clean increases in the
debt limit. That’s what the president would like. As we’ve seen, the
House has a much more aggressive approach to cutting spending that they
want to accompany any increase in limit. They are very far apart. And
again, it is May 2nd. X date is apparently June 1st. There’s not a lot
of time to close the gap between two proposals that are so far apart.
It’s not a great situation.
The president has invited the four
majority and minority leaders from both chambers into the White House
to meet on May 9th, next week, a week from today. That will be the first
time the president has spoken with Kevin McCarthy directly about the
debt ceiling limit since the beginning of February. So there really has
been no progress, and we have two very strong oppositional positions.
The Senate’s not doing a whole lot in this debate, although Majority
Leader Schumer is apparently preparing a clean debt limit increase bill
just in case they can get agreement to do that. It seems unlikely they
will, but there is a lot happening here. There’s not a lot of time to do
it, and a lot of ground to cover up in their negotiations.
Sarah Spreitzer:
Yeah, and one of the questions that we got, Jon, for this public policy
update was, “If we actually default with our creditors or Congress is
unable to raise the debt limit, what does that mean for institutions of
higher education?”
Jon Fansmith: Yeah, so
it’s a good question, in part because we have never defaulted. We don’t
know exactly what will happen in the case of a default. It doesn’t work
the same way, or at least the expectation is it will not work the same
way, a government shutdown will. The government will not shut down
because we’re defaulting on our obligations. What we have seen in
previous times when we’ve even gotten close to not meeting the debt
limit is the markets react, interest rates start to skyrocket, there’s
some other economic impacts. The broad expectation if we do default is
that it might trigger a global recession.
Again, this is not
specific to higher ed, but we saw the impact of a global recession in
2008. States started cutting back their support for higher education.
Lots of people suddenly became unemployed. Large numbers of them
enrolled in higher education to improve their skills in the competitive
job market. You combine those two things, both surging enrollments and
declining state support, you really put a lot of financial struggle into
institutions who are really struggling with the impact of that. You add
to that the fact that in a recession you have lots more students with
significantly higher financial need. It’s a very, very difficult
environment for higher ed. And the federal programs, particularly things
like Pell that are tied to financial need, the costs of those programs
begin to skyrocket too.
So there’s a lot of cyclical impacts
that happen. Again, we don’t know exactly what might happen if we
default. We’ve never done it. But it’s not going to be good news. Very
unlikely to be anything other than a lot of hardship for people.
Sarah Spreitzer: Yeah, and there seems to be at least bipartisan agreement that it will be bad if it does happen.
Jon Fansmith: Yeah, although how bad seems to be a matter of dispute, but yes.
Sarah Spreitzer:
Right, right. But you started out by talking about there’s only one
thing that Congress needs to get done this year and it’s the debt limit,
and actually, there’s a few other things that they’re working on. I’ve
been following the National Defense Authorization Act, as I do every
year, and they’ve actually started scheduling the markup, at least in
the House, of that bill at the end of May. And it’s been interesting,
because the last couple years, as Congress has stopped passing
bipartisan legislation frequently or as often as they previously did,
the NDAA has become that vehicle for a lot of amendments, some of which
don’t really relate to defense.
But I think this year, as
we’ve seen in previous years, we’re going to see a flurry of language
around research security, around relationships between institutions of
higher education and China. I’ve already seen some language around
Confucius Institutes, of which there’s only five, I think, named
Confucius Institutes still in the United States, but obviously still a
concern for Congress. And so I think that I’m going to be very busy at
least this month and into the summer on NDAA. So while they’re working
on the debt limit, I think they’ll still be moving the NDAA forward. And
I know approps, the annual appropriations process that actually funds
the federal government, is starting and there’s been hearings asking for
agency heads and secretaries to go up and defend the president’s budget
request.
Jon Fansmith: There’s been a number
of hearings. I think probably more importantly, the House has already
announced that they’re going to start doing markups of their bills,
really starting mid-May and moving forward through the subcommittees and
out to the full committees. That’s obviously important for a lot of
reasons moving the bills forward, but one of the things about these
bills is they now have a level, right? I talked about that FY ‘22
levels, the cuts to the non-defense side of the budget. These bills are
going to be marked up at those levels. I said earlier, right? A 22, 23
percent cut in funding. You’re going to have to start seeing proposals
put forward that are going to implement cuts at that level in the House.
And
again, it’s highly unlikely that that will be the ultimate outcome. It
would be very surprising if at the end of these negotiations on the debt
ceiling, the president and congressional Democrats agree to go along
with cuts at that level, but we’re going to see proposals. They’re going
to have very scary numbers in them, things that are going to slash
student aid programs. The idea of certain programs being proposed for
elimination entirely seems very likely when we start to see these bills
coming out of committee. I don’t want to frighten people. That will not
be what we ultimately see. This is a long process. It involves lots of
parties and extended negotiations. Probably won’t be resolved till
closer to the end of the year, but the early phase is going to look very
worrisome for higher ed.
Sarah Spreitzer: Yeah,
and obviously, the Senate is going to be a completely different place.
So I think more so than in previous years, there’s going to be a lot of
differences between those bills. And will there even be a way for them
to conference those two together?
Jon Fansmith:
Yeah, even in the best of times, that hasn’t really worked out the last
few years. The House, because it’s the House and the structure of the
House, they have always moved their appropriations bills for the most
part through the process.
The Senate side, we have not really
seen the same process through the Senate, in part because it’s harder
to move bills through majority control in the Senate. We have seen for
the past few years, frankly, the Senate simply announcing what their
levels will be, putting bills out that they don’t mark up, that they
don’t put to a vote. And then the negotiations go on at really a pretty
limited leadership level. It’s senior leadership looking at the top
lines. Once those top lines are determined, that filters down to the
bill.
So we will see really frightening numbers from the
House side. We probably won’t see anything from the Senate side until we
get past the debt limit, until we get a little bit further down the
road and there’s some clarity about where there could be agreement on
overall spending. Again, most likely to be at the end of the year. Most
likely, if past is prologue, big omnibus bills, wrapping it all together
in one way.
Where that ultimately ends up, hard to say. We
haven’t had quite the commitment to budget cuts that we’re seeing from
the House Republicans in the last few cycles, but obviously, if failure
to do so means the government shuts down, there is some motivation to do
that. Government shutdowns are politically unpopular. We’re in a really
important election cycle. I don’t think either party wants to be seen
as causing those kinds of disruptions. Easy for me to say, who knows?
But we’re at the beginning of a long process and, frankly, one that’s a
lot more complicated-looking than it has for the past few years.
Sarah Spreitzer: And
we got a question about who’s lobbying for higher education interests
in Congress while these discussions are going on, and of course I would
say the American Council on Education. We’re very active in making sure
that members of Congress understand the importance of robust funding for
our institutions, for student aid, for research funding, and we will
continue to carry that message. But, Jon, beyond what Congress is
working on, the Department of Education has been extremely busy, and I
know, when we were at the annual meeting, there was a lot going on
regarding third-party servicers and a guidance letter that the
department had put out that had caused a lot of concerns about how
institutions were going to have to report third-party servicers or TPS
services and where does that stand?
Jon Fansmith: Yeah,
this has all been quite a whirlwind and, frankly, really unusual in a
way that we haven’t really seen around guidance from the Department of
Education. I think people, probably if you are joining this session,
have some basic familiarity with the issues. I’m not going to go through
the whole thing. But mid-February the department put out guidance that
really radically changed the definition of what a third-party servicer
is, essentially outside entities that contract with institutions to do
things. Traditionally, it’s been understood as administrative support
for the financial aid office. The new revised definition that the
department put out would pull in a huge number of entities that we’ve
never before considered third-party servicers.
It raised a lot
of concerns. It raised a lot of concerns from lots of different areas
of higher education. ACE filed a comment letter to the Department of Ed
that had 85 different organizations on it. Maybe more importantly even
than the broad community letter was that there were about a thousand
other comments, overwhelmingly from institutions themselves talking
about what this would mean for them, made it really clear what the
impact would be for individual institutions. And to their credit, the
Department of Education saw that. They reviewed the information, they
reviewed the comments, and very quickly they reversed themselves.
Kind
of unusual, right? The comments were due on a Thursday, and then on the
subsequent, or I guess a week and a half later in a blog post, the
Department of Education announced that they were indefinitely suspending
this guidance that they would say, “Schools, it will only go into
effect six months after revised guidance is put out. Schools wouldn’t
have to report on those relationships until that same point.” So really
functionally, there is a huge amount of time before we see this, and,
frankly, we may never really see that coming out given some of the
backlash and the concerns they have.
Now, the big qualifier
there is one of the topics that the department is looking at for
negotiated rulemaking, which is this process by which the Department of
Education brings stakeholders together to negotiate around different
regulatory proposals. They’re looking to do a big rulemaking session
this year. One of those topics is third-party servicers. So they will
have an opportunity to bring in representatives of institutions and
student groups and consumer groups and accreditors and all sorts of
others to talk about what this might look like, maybe get a little bit
more informed discussion around where changes could come from.
Underlying
all of this, really we’re talking about third-party servicers. What the
department is really thinking about is online program managers. They
are thinking about the relationships colleges and universities have with
outside entities that, in many cases, provide educational content,
program administration, other services to institutions. That’s what
they’re getting at, so that’s likely to be what the bulk of that
rulemaking process is about.
Sarah Spreitzer:
And negotiated rulemaking takes quite a while to actually go through,
because guidance, obviously, the department thought we can issue this
and institutions will have to start responding immediately. But
negotiated rulemaking is such a much more involved process. And you
talked about the fact that TPS is going to be one of the topics, but can
you talk a little bit about the calendar and how long it’s going to
take?
Jon Fansmith: Sure, and there are six
other topics the department proposed in addition to third-party
servicing, and they also asked about income-driven repayment plan
changes. That plan I talked about that the House bill would have barred
them from going forward with, they want comments on that as well. They
just closed, as of Monday, the comment period for people to say what
they thought about those topics. Did not get a very strong response. I
filed ACE’s comments Monday night, and at that point only 10 other
comments had been filed. Some may have come in after we did ours, but
not a strong response. It’s really just, I think, a recognition of the
fact that the topics the department has put forward in previous rounds
of rulemaking are generally the ones they’ve then gone ahead with the
rulemaking on. So they’re likely to pursue those seven that I
referenced.
Now that they’ve closed that period for the
comments and topics, we expect to see probably within a month or so the
department formally announce that they’re moving forward on rulemaking
on those seven issues and then ask for negotiators to be nominated. This
is a process by which associations and institutions and other
organizations look at the different spots that are reserved for
negotiators at the table and submit people they think would be good
candidates to represent the interests of their sector in those
negotiations. The expectation here in DC is that they will assemble the
negotiating panels, announce them, and then begin rulemaking sessions
probably in September. And what they have done so far, which is
traditional, is to do three rounds of rulemaking, one each month, each
taking about a week. So you’d see one week in September, one week in
October, one week in November. That’s the likeliest outcome.
Again,
these are big technical issues that they’re talking about, things like
return to Title IV and cash management, accreditation, distance
education. These are not really simple or easy to grasp concepts. So
getting this right, having a lot of informed technical expertise at the
table, is going to be important.
That’s why the comments that
we did file around the topics essentially didn’t speak to the topics
themselves, but said it’s really important that you start thinking about
splitting up these topics into different committees. Because the trend
has been one rulemaking committee that covers seven, eight, 10 issues,
usually very different in terms of what they are. And that for things
like this that are so technical, having the right experience at the
table is going to be really important to getting it right. So instead of
trying to find 20 or so people who have expertise across all of these
areas, which is just highly unlikely you’d be able to do that, we’re
asking them to think about splitting it up in a way that makes a little
bit more sense so that you have the right people at the table for that.
Sarah Spreitzer:
Well, in the leadup to the presidential election next year, which I
know is going to be a really exciting time here in DC. Being sarcastic,
if folks can’t hear that over the mic. But once something goes through
actual rulemaking, it’s much harder to unwind for the next
administration. They have to go through their own rulemaking process.
And that’s something that we saw with the Trump administration when they
did Title IX. Unlike other things that the Trump administration did
through executive authority, through letters, or through guidance, the
Biden administration couldn’t just unwind the Title IX campus sexual
assault rules. And so we are still waiting for those final rules to come
out around that, but we did see something on Title IX college
athletics, and can you say a little bit about that?
Jon Fansmith:
Yeah, and this came out partly as a result of the negotiations around
the broader Title IX package and particularly the Biden administration’s
response undoing the Trump administration’s regulations that they had
passed around Title IX and the emerging issue in states, particularly
we’ve seen this around bans on participation in women’s sports by trans
students who identify as women, whose gender identity aligns with women.
The Department of Education essentially announced that they would
address this issue in a separate Title IX rulemaking. For a while, there
was an expectation we’d see that relatively soon. It took a while, but
the department released it at the beginning of last month. They have it
out for comment.
The rule is kind of interesting, right? There
was some expectation that they would very rigorously block bans on
participation by trans students in college athletics. And I should say
in athletics generally because it’s K-12 as well as higher ed, but
that’s not what they actually proposed. Instead, what they said was each
institution has the responsibility to determine, really on a
sport-by-sport basis, not a broad policy even for their campus, but on a
sport-by-sport basis, the ability of students to participate in
athletics as it relates to their gender identity. And the only criteria
you can use to make those evaluations is around issues of
competitiveness and competitive fairness and safety of the
student-athletes.
It’s an interesting regulation in particular
because a lot of times we tend to see very specific requirements in
regulations on institutions. The federal government setting rules that
are very clear. “You have to do X, Y, and Z and you have to do them in
this manner.” And this is really leaving it up on an
institution-by-institution basis, on a sport-by-sport basis within the
institution, how you make those determinations. In some cases, that’s
probably a really good thing. It gives schools the flexibility to think
about their mission and their campus culture and how they approach
athletics and make the determinations that make the most sense for them.
On
the flip side, this is an incredibly controversial issue. The flurry of
state legislation in this area, which is getting a lot of public
attention, which is getting a lot of media attention, it’s going to put
institutions in a difficult place. You have to make those
determinations, again, not just institution-wide, but on a
sport-by-sport basis. And there will likely be people, regardless of the
determination, who are unhappy with what you decided. And without that
clear, prescriptive federal rule saying, “you have to do X, Y, and Z,”
then the challenge falls on that institution’s choices there.
So
it’s a difficult place in some ways for institutions to be in. Comments
are coming up. I think there’s a lot of concern, particularly from the
institutional side, about what this looks like in being implemented. Not
just the issues I talked about, but you think about athletics. Almost
all athletics take place under the spectrum of conference participation
at all levels of collegiate athletics. Most institutions participate in a
conference. Those can be very local, or they can cross multiple states
and regions. How you determine the fact that every institution is
responsible for making their own individual determinations, what that
means for competitive fairness and equity issues and others across a
conference where institutions may be making very different decisions,
that’s going to be hard to sort out, and the rule doesn’t allow for that
sort of collaborative approach to making those determinations.
So
a lot to follow here, really, again, a very charged issue area, one
that’s getting a lot of public scrutiny and attention, and it really
will, once implemented, I think, put institutions in a difficult
position of thinking through very clearly what their policies are and
how they implement them and how they justify them to the public.
Sarah Spreitzer: Do you think that’s one that’s likely to end up in the courts?
Jon Fansmith: I
think that’s a pretty safe assumption. That’s what we’ve talked about a
lot with the bigger Title IX package, the assumption that, as soon as
it is finalized, there will be legal challenges. My guess is that would
be the case here. And something worth noting is the athletics piece came
out of the discussions around the broader Title IX regulations. How
these are going to be coordinated; will they be finalized around the
same time; what’s their release schedule; I think people still are very
unsure of how that will work. So you may have them be introduced,
finalized two separate points in time, both subject to separate court
challenges. Maybe they’ll be finalized at the same time, put forward as a
total package, just not clear at this point.
Sarah Spreitzer:
That’s great. So a lot going on in DC. It sounds like I did miss a
little bit of stuff while I was out, but we do have some questions that
were submitted beforehand, and I just remind everybody listening or who
are participating in our live podcast to please submit questions through
the chat. And one question that we had, Jon, was the College
Transparency Act. This has been something that a lot of the higher
education community has championed over the years. It’s been introduced
in multiple Congresses. It’s been reintroduced now in this Congress.
Does it have a path forward? Is this the year that we will see it
passed?
Jon Fansmith: Yeah, College
Transparency Act. So it was reintroduced this week on Tuesday. It keeps
gaining momentum and there’s some things where you look at and you say,
“This might be the Congress where there’s a chance for it to advance.” I
should say ACE is supportive of the College Transparency Act. We would
like to see it advance and enacted into law.
Some things that
are positive signs if you are supportive of its passage. The lead
Republican sponsor of the College Transparency Act in the Senate is now
the ranking member on the Health Education, Labor and Pensions
Committee, Senator Cassidy of Louisiana. So that is a very powerful
position to be in, and you have a piece of legislation that is very
clearly identified with you.
And somebody just asked, “What does it do?” which is a very good question, right? Maybe we should start it there, Sarah.
Sarah Spreitzer: Yeah, that’s a good question. Sorry.
Jon Fansmith: The
College Transparency Act is a few things, but the most important thing
it does is it would create a student unit record level database at the
Department of Education. People might be surprised to know this or maybe
not, but the Department of Education doesn’t have a lot of information
on students. They have data on students who get financial aid, which is
roughly two-thirds of all students, but that’s a big portion of the
student population they don’t have any information on when they start,
when they complete. CTA would have a lot more information. It would do
things, for instance, like allow us to understand how often students
transfer between schools. Right now, the Department of Education can’t
follow somebody when they move from school to school.
So it
would provide an incredibly rich data set to help us better understand
the implications of federal policy on student outcomes, institutional
and programmatic level implications for students, where we’re seeing
successes, where we might not be seeing successes. It gives us just a
much clearer picture of what’s happening in higher ed. That’s what the
bill proposes to do.
And, again, possibilities, there’s a
strong advocate for it now in a position of prominence in the Senate.
The counterpoint, though, is one of the biggest, if not the biggest,
opponent of the College Transparency Act is Representative Virginia
Foxx, who is now the chair of the House Education and Workforce
Committee. She is a very strong opponent of this bill and has been for a
long time. Really has zero interest in seeing this advance. And in many
ways, especially since she is in the majority in the House, that’s a
stronger position to block it than Senator Cassidy and the Senate has to
advance it.
That’s been the dynamic for a long time. There’s
essentially not enough ability to get agreement between the parties and
between the chambers to move it forward. It’s been proposed in a number
of areas, added to other bills as an amendment text. There will
continue to be efforts to move it forward, never say never, but with
Virginia Foxx in that position, it is hard to see a clear path forward.
Sarah Spreitzer:
Yeah, we’ve seen this attached to the NDAA in the past. I think there
was also an attempt to try and move it as part of CHIPS and Science
Bill, which passed last year. But when these things get attached, it
usually has to go back to the four corners or the authorizing committees
and they have to give signoff to allow it to move forward. And I think
you’re right. I don’t think Chairwoman Foxx is going to be supportive of
that. Now, there is also a lot of bipartisan support for short-term
Pell, and last year they tried to package the two things together. So I
don’t know if that will help move it forward, but I think we’ll at least
see it try and move this year.
Jon Fansmith: Yeah,
I think that’s a great point too, Sarah, and a little bit of insight
into how these decisions are made. A lot of times, when they’re put as
part of a bigger bill, as you pointed out, the four corners, the chairs
and ranking members of the relevant committees in the House and the
Senate, essentially they’re asked if they approve of it, and they’re
asked by the leadership who’s trying to shepherd the bill forward. You
wonder why one of the four can block something. Well, it’s because
leadership is weighing hundreds of possible pieces of legislation and
they just don’t want a problem. There are many things where they can get
bipartisan consensus between the two chambers that’s easy to move
forward. If even one member objects, it can really throw a roadblock
into getting that considered as part of a final package.
So
that is part of the problem here. Still, again, as you point out, could
be bundled with things that have bipartisan support like workforce Pell.
So never say never. Just the chair of the authorizing committee being
an opponent is a big obstacle to overcome.
Sarah Spreitzer: Yeah,
a pretty big one. So speaking of bipartisan legislation, the FAFSA
simplification that passed a few years ago with bipartisan support, but
the department is working to implement it. Where are they on that?
Jon Fansmith:
And this is another one, kind of like TPS, it’s been a bit of a saga.
And actually relevant to some of the other things we talked about too.
FAFSA simplification was a bill, it was included in a big end-of-year
spending bill, so it wasn’t passed on its own through traditional
lawmaking order. And by and large, we think that this is going to be a
good thing. It is simplifying the form. It should help more students
access financial aid, particularly around things like Pell Grants.
There’s a very clear benefit that we think more students will be
eligible for Pell Grants and a larger percentage of those students will
receive a larger Pell Grant as a result. Around the other aid
eligibility, it’s harder to tell because we haven’t seen these changes
in action.
But more importantly, the department’s having a
really hard time doing this and understandably so. This is both
complicated and really important. They have been trying ... They were
supposed to have everything in place last year. They knew that they
couldn’t do it, so Congress essentially gave them a one-year extension.
They have to do it by this year. The goal, really the target deadline
has always been October 1st. October 1st is a deadline that we use for
FAFSA.
We’ve gone to what’s an early FAFSA application the
last few years. That’s primarily to help low-income students have more
time to see what their aid offers are, look at them across different
institutions, help inform their search, so that they have the most
information they can make when they’re trying to make a decision about
an institution. It’s also really important to schools because it gives
them additional time for enrollment decisions and to understand what aid
applications is, to help shape a class, as they’re considering
enrollment and admissions decisions.
The department’s going
to miss that October 1st deadline. They’ve announced this publicly. They
have said it would take ... They will be able to have the FAFSA out
sometime in December. Originally, they said early December. Now, they’re
talking more about maybe mid-December. They are required by law to have
it in place by January 1st. They have said absolutely they will hit
that target, but they seem to be creeping closer and closer to that
January 1st deadline as it is.
It will only happen this year.
That delay will only happen this year. It should be in place for next
year. It will return to normal operations, the October 1st target date,
but it’s going to be meaningfully impactful. We were at our annual
meeting, and I don’t know, you were in sessions with me, Sarah, right?
How many people stood up and said, “Look, by November, I’ve already
packaged 7,000 students, right? I’ve already made acceptances out to
11,000 students.” This is going to have a big impact on campuses and, in
particular, a big impact on low-income students, who are the ones we’re
most worried about, who have the hardest time entering college and
managing the system. So it is a problem.
The department, to
their credit, is doing as much as they can. They take the seriousness of
this to heart. They want to make sure there aren’t the kind of problems
you see sometimes when programs are rolled out by the federal
government. They are doing what they can to assure quality here, and
they’re working on, frankly, limited resources. The last funding bill
did not give the federal student aid office, the office that oversees
this at the Department of Education, kept them level funding, so no new
money. You think about all the other things they’re being asked to do
around loan forgiveness and student loan repayment resumption, all these
big other things they have to do as well as change the entire financial
aid calculation system. It’s not surprising they’re having a hard time
with it, especially without any additional resources.
That
said, we can’t ignore those concerns. These are really meaningful to
institutions, really meaningful to low-income students and, frankly, an
area of great concern for us right now.
Sarah Spreitzer:
So speaking of deadlines, the department also recently granted an
extension for the spending of HEERF dollars, the Higher Education
Emergency Relief Funds, that were included in the COVID relief bills.
What’s the new deadline, Jon, and does anybody still have HEERF dollars
left to spend?
Jon Fansmith: Yeah, so actually I spoke with Politico about
this last week, I think, and I was a little bit surprised by the
amount. It’s not that much. The department estimates that there’s
roughly $5.5 billion in unspent HEERF funds. These were the COVID relief
funds, the Higher Education Emergency Relief Funds that came out of the
COVID bills. There were approximately 700 institutions that still have
some money left that they haven’t spent out. This is actually in marked
contrast to K-12 where there are tens of billions of dollars that have
not been obligated yet. And we’ve been tracking this money for a while,
really throughout the process.
What we’ve heard from campuses
is that this is not sort of an omission. It’s not like they forgot they
had HEERF money lying around. It’s that in a lot of cases you have
things like you contracted with a vendor, say a telehealth provider for
mental health services, and you pay them monthly and you have a contract
for two years. So you’re holding the money, but paying it out over
time. Or other things, your air ventilation system, you want to add
purification elements to it. Well, everybody was doing that during the
pandemic. So supply chain issues and other things made the equipment and
the vendors who could install it for you harder to access. You might
have budgeted money towards that and simply not been able to spend that
money out because the equipment’s not available, the vendors who install
it are busy with other things. It’s not like you’re not using it, it’s
just obligated, but you haven’t had the ability to spend it.
So
relatively not that much money in the grand scheme of things, only
again about $5.5 billion out of about $77 billion total, relative to a
lot of the other COVID relief programs where you see... We talked about
the House bill would rescind a lot of that COVID relief money. Higher
ed’s done a great job. Higher ed got the money in and got the money out
to students. In particular, the student aid portion of that went out the
door very quickly. The institutional side, there is some remaining
money, but, again, usually, it’s very much accounted for and obligated
in institutional expenses.
So something to track. The
department is offering extensions. You have to apply for an extension of
one more year. Last year, they granted them automatically. For those
institutions and those situations I talked about they will apply, it is
very likely the department will accept it, but it’s good due diligence
by the department. They want you to explain why you need it, an
extension, why you need the additional time. They’re not looking to
penalize institutions. They just want to make sure that these are
thoughtful and intentional decisions by a campus before they grant the
extension.
Sarah Spreitzer: So, Jon, we have
about four minutes left and it might be good just to wrap up with a
looking forward to the summer type thing, what we’re waiting for.
Somebody asked about Department of Labor, rules around FLSA, which has
to do with exempt employees and nonexempt employees and who you’re
paying overtime. I think that’s something that we’re going to continue
to watch for, to see whether or not it’s going to be issued this summer.
We also have the Title IX rules, the large package that we’re waiting
to see if that happens this summer. And then one of the big things that
we’re watching is the UNC Harvard race-conscious admissions case that
the Supreme Court is expected to issue a ruling on< and I know we
talked a lot about that at our recent annual meeting.
Jon Fansmith: You
and I both have the same experience there. I don’t know how many
presidents and other senior administrators wanted to talk about that and
what the possible impact will be. And I should say, actually at that
meeting, we had a session led by or organized, I should say, by ACE’s
general counsel, Pete McDonough, where you had general counsels and
college presidents and other folks talking about what the environment
looks like, what schools can do to prepare, what schools can do to keep
building diverse classes if, as is widely expected, the Supreme Court
strikes down the consideration of race in admissions.
It’s a
difficult situation. We have looked at all sorts of things. I know
Georgetown Center for Educational Workforce did a report on this where
they looked at alternative methods schools used to increase the
diversity of their classes and found that, while helpful, all of them
fall short of being able to consider race in admissions.
We
did our own research at ACE where we looked at states that had
implemented bans on the consideration of race in admissions. And what
you found out when you looked at those states is that for selective
institutions, even in states where population enrollment overall was
jumping by double-digit percentages, the percentage of Black students,
for instance, declined. So even as overall enrollment was surging at
those institutions, the percentage of the Black students there declined.
You
flip that around to open-access institutions, places that are admitting
80% or more of their applicants, and in states where you banned the
consideration of race, even in those states where enrollment overall was
declining by huge percentages, the percentage of students of color at
those institutions, the open-access ones, grew significantly. So you are
seeing a marked impact of a shift away from selective institutions to
less selective institutions of students of color in those states. That
is likely what we will see nationally when the Supreme Court rules.
Other
things to consider: the Supreme Court is looking very much, there seems
likely that consideration of race as it relates to an individual’s
lived experience might still be part of the admissions process, but it
will undoubtedly have an impact on what our college classes look like,
especially at selective institutions. But yeah, Sarah, lots to look
forward to. Not all of it, sadly, good news, but much going on and much
going forward. We’re just about to wrap up, timewise. Is there any final
thoughts?
Sarah Spreitzer: No, I would just
say I think we talk about this a lot. Although it doesn’t seem like
Congress is moving many things forward, we’re staying very busy talking
about the importance of higher education. And so I think, for this
group, there will still be a lot to update them next month.
Jon Fansmith:
Yup, and thank you everyone for joining us. Thank you for the very good
and thoughtful questions. Sarah mentioned, we are really liking our
live podcast and dotEDU Live opportunity. So hey, invite us to your
campus. We’d love to come out and do this with a live audience again and
have some fun and meet with people. So thanks again for joining us and
hope you enjoy the rest of your day.
Sarah Spreitzer: As
always, you can check out earlier episodes and subscribe to dotEDU on
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And finally, a very big thank you to the producers
who helped pull this podcast together. Laurie Arnson, Audrey Hamilton,
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Mushtaq, and I sound as good as possible. Finally, thank you so much to
all of you for listening.