In HEA Talks, a Call for More Experiments

DC Shuttle …

Higher Education Act Reauthorization and Innovation. The Senate Health, Education, Labor & Pensions (HELP) Committee held a hearing entitled “Reauthorizing the Higher Education Act: Exploring Barriers and Opportunities within Innovation.” This hearing, one of several leading up to the reauthorization of the Higher Education Act (HEA), focused on the changing higher education landscape and what, if anything, Congress can do to support innovation that will help colleges and universities meet student needs. Chair Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) agreed that the country needs a highly educated workforce to compete in the global economy and that Congress should take action to breakdown barriers in higher education that will allow both nontraditional students and nontraditional, but high-quality, programs to thrive. Murray urged that any expansion of aid to new programs and institutions be accountable to students and the taxpayer and described how she will measure the appropriateness and potential success of any policy saying, “Any policy or program should be judged by how well it works, for whom it works, and by how much it costs.” The U.S. Department of Education is exploring granting experimental federal aid to competency-based education programs and alternative education providers, such as MOOCs, coding academies and boot camps that partner with accredited institutions. Southern New Hampshire University President Paul LeBlanc called for Congress to create “safe innovation spaces” to give institutions the flexibility they need to try out new programs and, in exchange, institutions will be tied to quality measures that call for transparency and the use of data analytics to measure the success of failure of these programs. Another witness, Michael Horn of the Clayton Christensen Institute, echoed LeBlanc in calling for “four or five controlled experiments testing different programs and incentives so we can see what works best” and invest in them accordingly in order to prevent opening the floodgates of aid to undeserving programs or entities. Sen. Elizabeth Warren (D-MA) called for students to benefit from whatever action Congress takes saying, “If we’re going to loosen federal regulations, we need to ensure that the benefits are being passed on to students.” The next hearing on the HEA will be held on July 29, 2015, and will focus on campus sexual assault.

Federal Reserve Bank of New York Studies Federal Student Aid, The Federal Reserve Bank of New York released a study suggesting that colleges and universities respond to the relaxing of students’ funding constraints, thanks to receiving subsidized federal loans, by raising tuition. The study seeks to “identify the impact of increased student loan funding on tuition” and finds that “institutions more exposed to changes in the subsidized federal loan program increased their tuition disproportionately around these policy changes.”

Action on Student Data Privacy Bill This Fall? Sen. Richard Blumenthal (D-CT) hopes the student data privacy bill (S. 1788) he introduced with Sen. Steve Daines (R-MT), the SAFE KIDS Act, can be reconciled with a competing measure (S. 1322) sponsored by Sen. Orrin Hatch (R-UT) and Sen. Ed Markey (D-MA) so they can move a bill sometime shortly after the August recess. Both bills seek to ban private companies from using or selling student data to create targeted advertisements and to strengthen the security standards to which these firms are held. The measures differ in terms of enforcement: the Daines-Blumenthal measure would give the Federal Trade Commission the authority to enforce the new standards, while the Hatch-Markey measure would give that power to the Education Department.

Moody’s Upgrades Higher Education Future from “Negative” to “Stable.” Moody’s Investors Service revised the outlook for U.S. four-year higher education to stable from negative, “reflecting the expectation the sector’s business environment will neither erode significantly nor improve materially in the next 12-18 months.” Moody’s expects that the “new normal” of tuition revenue growth will be 3% and also expects the sector to see a small increase of 1-3% of federal research and a 3% increase in state funding.

CFPB Cracks Down on Abuses in Student Loan Industry. The Consumer Financial Protection Bureau (CFPB) announced an $18.5 million settlement was reached with Discover Bank over its illegal debt collection practices and misrepresentation of borrowers’ rights—$16 million of the settlement will be refunded to borrowers. CFPB Director Richard Cordray called the settlement “an important step in the bureau’s work to clean up the student loan servicing market.” The CFPB is taking steps to issue its own set of rules that will govern how student loan servicers operate after reaching the end of its “public inquiry” last week during which the agency received 30,000 comments. The CFPB also accused Student Financial Aid Services Inc., the operator of, of misleading consumers and using deceptive sale practices to boost its own revenue. Cordray spoke about the charges saying, “Student Financial Aid Services Inc. made millions of dollars at the expense of consumers through its illegal recurring payment scheme. Our enforcement action will put money back in the pockets of consumers who were misled while seeking to access federal student aid.”

Consumer and Student Advocates Call for “Flagging” Colleges Under Investigation. The Institute for College Access & Success, a consumer and student advocacy group, sent a letter to Education Secretary Arne Duncan calling for the Obama administration’s new college comparison website to include a feature that will alert consumers if a school is being subjected to federal or state investigations or if it is a party to a lawsuit or settlement. The administration is working to create the college comparison website in lieu of a college ratings system.

We publish the DC Shuttle each week featuring higher ed news from Washington collected by the New England Council, of which NEBHE is a member. This edition is drawn from the Higher Education Update in the Council’s Weekly Washington Report of July 27, 2015. Founded in 1925, the New England Council is a nonpartisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the New England region. The Council’s mission is to identify and support federal public policies and articulate the voice of its membership regionally and nationally on important issues facing New England. For more information, please visit:



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