NAICU Washington Update

HELP Hearing Offers HEA Reauthorization Preview

September 26, 2012

The recent hearing on college affordability by the Senate Health, Education, Labor and Pensions Committee, in the recurring themes that emerged in testimony, offered a hint at what could be in store for all colleges in the next reauthorization of the Higher Education Act.  (Video and witness statements are available on line.)  The hearing took place just one week prior to the House hearing on higher education data, and illustrates how the conversation about a new federal role in higher education reform is converging in both chambers and with both parties.

Entitled, “Improving College Affordability: A View from the States,” the hearing featured panelists from state higher education organizations, and the discussion focused on issues in state funding of higher education.  Still, the reforms suggested would have implications for private nonprofit colleges as well.

In their opening statements, both Chairman Tom Harkin (D-Iowa) and Ranking Member Mike Enzi (R-Wyo.) noted that public college tuition has tripled since the 1980’s, that state budgets are providing less for higher education, and that as a result, families are borrowing more to go to college.  Harkin noted that “funding alone doesn’t fix the problem.  We must have policies to maximize access that are results oriented, and...we’ll be [reauthorizing] HEA next year.”  Enzi agreed, adding that “If gas and milk had gone up at the same rate as college costs, gas would be $13 a gallon, and milk would be $23 a gallon.”

The witnesses representing state colleges and universities saw the hearing as an opportunity to highlight what they've been doing to address the need to increase college completion rates in the U. S.  Another possible takeaway, though, is to consider their testimony as a word cloud of education reform proposals that could creep into federal higher education policy.

HELP Committee Word Cloud

Performance funding

All four witnesses referred to “performance funding” of some kind.  John Morgan, chancellor of the Tennessee Board of Regents, explained his state's formula for allocating state higher education funds based on outcomes rather than enrollments, which “turns old system upside down.”  Student learning outcomes vary depending on the type and mission of the institution, he said, but all are based on meeting benchmarks, making progress, and timely completion.  To improve time to degree, the state supports dual enrollment in high school and college, as well as credit for life experience.  They also provide seamless transfer of credit from two-year to four-year institutions.

In Oregon, Camille Preus, commissioner for Oregon Community Colleges, reviewed state legislation for aggressive achievement goals for 2025.  The Oregon program focuses on creating a coordinated P-20 public education system; focusing state investments on achieving student outcomes; and building statewide support systems.

David Longanecker, president of Western Interstate Commission for Higher Education, (and a former assistant secretary for postsecondary education) shared that more than half of the states are participating in the Complete College America program, helping them develop “clear metrics and methods for improving productivity.”  He believes institutions need to have more of a stake in student success at the state and federal level, and that performance funding will work:  “if institutions are awarded for completion, they will get students through.”

Muriel Howard, president of the American Association of State Colleges and Universities, pointed out that the shift in state funding from need-based to merit-based grant aid is “contrary to the fundamental purpose of student financial aid.”  Citing a Brookings Institution report from this summer, she note the report's authors suggest “targeting state grants to needy students with the potential to succeed,” and “using incentives to drive timely degree completion.”

Student responsibility

Student responsibility refers to who bears the burden of paying for college.  Preus outlined Oregon's “Shared Responsibility” model, which has restructured the state's need-based program into a “partnership among students, their families, the federal government, and the state to meet college costs and increase educational attainment statewide.” She said that “the state assists only when there is a remaining need not covered by the other partners.”

All panelists noted that state merit aid awards are skewed toward high-achieving students who would go to college regardless of the state aid, rather than targeted toward low-income students who would have to borrow more for their college education.

Role of foundations

The hearing reflected the growing influence of think tanks and foundation policy shops focused on higher education. Throughout their testimony, panelists cited Lumina, Gates, Brookings, The Education Trust, Achieve, and Complete College America as leaders in higher education reform.  Clearly, these organizations are the driving force behind the states' move toward performance-based funding.  How this trend will shape the traditional federal approach to higher education funding and accounting bears watching as the 113th Congress begins the HEA reauthorization process.

As a closing question, Enzi asked the panelists what the federal government could do to help college affordability.  Their answers included providing more federal need-based aid; discouraging state level merit-based aid; keeping federal maintenance-of-effort provisions on state funding; aligning policies with outcomes; building stronger federal-state-institution partnerships; and imposing regulations strategically, based on institutional type rather than the current one-size-fits-all approach.

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