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Congress is already signaling that its big legislative priority for the year is reauthorizing the Higher Education Act — and the Trump White House is already complicating it.
In a recently released set of priorities, the Trump administration laid down its opening bid: It wants to set limits on the amount of loan money students can borrow and overhaul the current system to accredit colleges and universities. It’s also throwing a controversial issue like “free speech on campus” into the mix.
Overall, higher education has taken a back seat in Trump’s agenda, which has focused largely on immigration, repealing the Affordable Care Act, and cutting taxes. But with a retiring senator who was a former education secretary leading the charge, Congress has its eye on renewing the Higher Education Act for the first time since 2008. The White House is now getting more involved — with senior adviser Ivanka Trump leading the initiative.
“We need to modernize our higher education system to make it more affordable, flexible and outcomes-oriented, so all Americans, young and old, can learn the skills they need to secure and retain good-paying jobs,” Trump said as she unveiled the plan at the National Council for the American Worker.
The Trump administration’s priorities — particularly ones benefitting for-profit colleges — could set up a clash with Democrats on one of the few issues on Capitol Hill where there is potential for bipartisan cooperation.
Why the Trump administration is interested in higher education now
The Higher Education Act is the landmark 1965 law that increased federal money to America’s colleges and universities. It’s typically updated and reauthorized every four to six years, but the last time a serious rework of the law happened was over a decade ago (it was extended in 2013).
It’s ripe for an update, and there’s a limited window to get things done. The most important Republican involved in negotiating the Higher Education Act reauthorization is Sen. Lamar Alexander (R-TN), the chairman of the Senate Committee on Health, Education, Labor and Pensions.
Alexander is a member of the Senate’s old guard; he has the ear of Senate Majority Leader Mitch McConnell (R-KY), and he’s working with vice-chair Sen. Patty Murray (D-WA) on reauthorizing the HEA. There’s another important reason to think reauthorization could actually happen in 2019; Alexander is retiring in 2020, so he has incentive to get it done.
Alexander is mainly negotiating with Murray to draft a bipartisan bill, as well as House Democrats on the Education and Labor Committee, chaired by Rep. Bobby Scott (D-VA). But he also wants to get a sense of what Trump would sign.
The biggest points of contention that could come up between Democrats and Republicans during reauthorization will likely be how much federal money to give to need-based student aid programs like Pell Grants. Murray’s main ask is to increase the amount of federal spending to help students with the skyrocketing cost of college, but Republicans are loath to add any new domestic spending.
“I share the Administration’s goals to make a college education worth it and to make it simpler to apply for federal student aid and pay back student loans,” Alexander said in a statement to Bloomberg Government’s Emily Wilkins. The senator called the White House’s suggestions “helpful” as he works with Murray to prepare the final draft of the bill, which he estimated would be before summer.
Murray, the top Democrat on the committee, had harsher words for the White House, calling their proposal a “feeble attempt to claim the Trump Administration is helping students.
“This proposal would end up hurting students by reducing the amount of federal aid for students and taking billions out of the pockets of borrowers,” Murray said.
What the Trump administration wants to do with student loans
There are a few things the Trump administration is seeking to do with student loans, some of them more controversial than others.
One of the White House’s big priorities is limiting student loan debt. Democrats are calling to provide more aid so students don’t have to take on as much debt in the first place, but the administration wants to place limits on the amount of a loan a student could take out to help pay for school. The White House is targeting two types of loans in particular: the Parent PLUS and Grad PLUS programs — where parents of students and grad students can borrow — both of which are currently unlimited.
Parent PLUS loans are often what parents turn to after they’ve exhausted their ability to get federal Pell Grant money, explained Rachel Fishman, the deputy director for research, at New America’s Education Policy Program.
“I think capping the loan is probably seen as a way to rein in some of this borrowing that is happening,” Fishman said.
Proposing caps to these kinds of loans to stop parents and grad students from accruing additional debt has come up in past Republican higher education bills, but there is a critique that setting limits could hurt low-income grad students by making it more difficult for them to get the money to even be able to pursue a higher education. The thinking behind that is if they complete an education and obtain a higher salary, they would theoretically be able to pay the loan back.
Fishman said she is concerned about some of the language about teaching students to be more prudent borrowers, saying it’s laden with double meaning.
“I think that’s code for preventing low-income and middle-income students from borrowing,” she said. “At the end of the day, students need more than they’re getting, even more than the loans.”
The Trump administration also wants to end the Public Service Loan Forgiveness program, which is intended to forgive the loans of those who work in public service like teachers, nurses, or police officers and firefighters, after 10 years of payments. But since the program got off the ground, it has been fraught with problems largely due to Education Department mismanagement — resulting in a huge percentage of borrowers being denied loan forgiveness, according to an NPR investigation.
Instead, the Trump administration is proposing forgiving all undergraduate student loans after 15 years, and cap loan payments at 12.5 percent of a borrower’s discretionary income. Forgiving the debt of all undergrad students after 15 years is a fairly progressive idea, but it’s tough to know how it would actually look in reality — especially given the Public Service Loan Forgiveness program’s rocky start under the Trump administration’s watch.
“It’s shaving some of the time off and then getting rid of the public service [requirement],” Fishman said. “It’s hard to say what this looks like compared to what we currently have.”
Trump and DeVos are taking aim at education regulations
With its outline for HEA reauthorization, the Trump administration is also making clear what it’s been doing quietly for two years: making it easier for for-profit colleges to flourish by repealing Obama-era education regulations.
The Obama administration put in aggressive rules to crack down on for-profit schools, after they noticed 44 percent of defaulted student loans were coming from people who attended for-profit schools. Some of these schools produced students who could not get good jobs with their degrees. In other cases, the schools collapsed suddenly, leaving students in the lurch.
In contrast to the Obama administration’s aggressive approach to try to close these schools, the Trump administration has fostered a much friendlier climate. In particular, the Trump administration is eyeing cutting down accreditation standards that are seen as the “gatekeepers” of which colleges can get federal funds.
Accreditors are the organizations that basically judge whether a school is performing well enough to get money from the federal government. Admittedly, accreditation isn’t a sexy topic, but it’s incredibly important when it comes to doling out federal dollars.
“Any one accreditor is incredibly important to the financial liability to the school and safeguarding that taxpayer investment,” said Clare McCann, deputy director for federal policy at New America.
Right now, there are two kinds of major accrediting organizations:
- Regional accreditors: Considered the “gold standard” of accrediting because of their higher number of standards, these agencies typically accredit public and not-for-profit schools.
- National accreditors: These accreditors largely deal with for-profit institutions. They have different standards from the regional accrediting agencies, and some national accreditors have given the green light to for-profit colleges that later collapsed and went bankrupt.
Basically, the Trump administration wants to get rid of the distinction between these two types, relaxing the number of requirements schools need to meet in order to get approved for federal money. That’s setting off alarm bells within the higher education community.
“The current system is not particularly robust in terms of oversight,” said McCann. “Any reduction in what we currently have is a pretty sizable risk.”
