The Changing Federal Landscape

Accessibility, affordability and accountability characterize the work of President Barack Obama who, since taking office, has worked with Congress to influence policy that affects both K-12 and higher education.  Stimulus funds in the 2009 American Reinvestment and Recovery Act provided nearly $50 billion to states to help offset state budget cuts and to spur initial reform efforts. Subsequent to this action, the president signed into law the Health Care and Education Reconciliation Act that makes postsecondary education more accessible and affordable through unprecedented federal investment. There are two main elements to this major legislation:  a full transition to the Direct Loan program and a significant increase in the Pell Grant program.

Beginning July 1, 2010, all student loans will be originated by the U.S. Department of Education.  Under the current system, both private banks and the federal government offer loans to students at an interest rate considerably lower than the market would bear.  In order to participate in this program, banks are provided a subsidy based on the volume of loans they issue.  In addition, the federal government guarantees nearly the entire amount of the loan should a student enter default.  With the Department of Education becoming the sole lender, it is calculated the federal government will save tens of billions of dollars.

This change in policy may affect many of the quality programs and services provided by nonprofit New England lenders.  For example, the Vermont Student Assistance Corporation (VSAC) is well-known for providing a variety of services to Vermont’s secondary and postsecondary students. To address concerns about the effect of this policy change on the positive benefits provided by nonprofit state entities like VSAC, the legislation will allow the corporation to service up to 100,000 loans through contracting with the federal government.  The legislation also includes funding that will enable states to continue support for the college-planning services these nonprofits provide to high-school students.

The savings generated from the transition to the Direct Lending program will be devoted to providing a consistent and reliable increase to the Pell Grant program.  Specifically, the funds will be used to maintain a maximum Pell Grant award of $5,550 for academic years 2011-12 and 2012-13. Beginning in academic year 2013-14, the Pell Grant maximum award will increase by the Consumer Price Index (CPI) and continue to increase by the CPI measure each year until the academic year 2017-18.  The award will then be locked in at the 2017-18 level (projected to be approximately $5,975) indefinitely.

The Obama administration had hoped to initiate additional higher education and student aid programs that would support the president’s goal of reestablishing the U.S. as having the highest proportion of individuals with a postsecondary credential by 2020.  While there was not enough money to fund additional programs, many states and the higher education community are addressing the challenges of college completion.

Across the country, colleges, universities and systems are announcing new initiatives focused on increasing the number of graduates.  For example, the University of Maine System issued a draft document in September 2009 outlining its systemwide strategic commitment to enroll and graduate more students.  Based on this initial report, the system will align itself with state initiatives, build strategic partnerships focused on those initiatives, and enhance the use of technology to deliver improved, widespread services to increase the number of college graduates. [See related article by UMaine System Chancellor Richard Pattenaude.]

In addressing degree completion, minority attainment deserves attention. An examination of Connecticut provides insight into the national trend.  Connecticut has experienced increased minority enrollment growth and a 1.3% increase in degree attainment. But this figure accounts for less than the growth across all graduates.  The slower growth can be partially attributed to a decline in African-American graduates. [See Connecticut Public Higher Education 2009 System Trends, State of Connecticut, Department of Higher Education.]

The overall goal of increasing the number of graduates is a concern in other New England states. Rhode Island, Massachusetts, New Hampshire and Vermont, along with Connecticut, have joined the Complete College America alliance, a new partnership aimed at assisting states in their efforts to increase college completion.

Finally, significant attention will be devoted this year to the reauthorization of the Elementary and Secondary Education Act (ESEA), commonly referred to as No Child Left Behind.  There is great opportunity for higher education as this debate unfolds.  Colleges and universities should pursue local- and state-level partnerships with the K-12 community in order to improve achievement and success throughout the education pipeline.  States may adopt new core academic standards to prepare college- and career-ready students.  Higher education institutions can play a significant role in this area, as states adopt these academic standards and develop K-12 student assessments aligned with these standards. Colleges and universities have an opportunity to work at the local level because school districts will need assistance in developing curricula that move students toward achievement.  But perhaps most importantly, postsecondary institutions will need to update their teacher-preparation programs to support students who must meet these new standards.

The Obama administration will remain focused on accountability at all levels.  States have received significant funding through the Recovery Act and Race to the Top Fund to design and utilize state longitudinal data systems.  This data will be used to highlight effective methods and programs, but also to assess areas that need improvement.  Teacher- preparation programs will be evaluated on the effectiveness of their graduates in the classroom through monitoring K-12 student progress.  An evaluation of workforce placement and success will also expose the strengths and weaknesses of postsecondary education programs. The data will also expose the strengths and weaknesses of postsecondary education programs in workforce placement and success.

The higher education community should look for new and robust ways to embrace these reform efforts to ensure the achievement of positive and effective outcomes.  Whether it is improving retention and completion rates, revamping and improving teacher-preparation programs or encouraging increased accountability, federal education reform efforts will continue to have a significant affect on higher education.


Muriel A. Howard is president of AASCU: The Leadership Association of 430 Public Colleges and Universities Delivering America’s Promise.

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