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Higher Education Policy Newsletter

March 3, 2020 — Lewis-Burke Associates LLC

A VIEW FROM WASHINGTON

Federal agency and congressional discussions have quickly begun to focus on the novel coronavirus, COVID-19, and the virus’ potential impact on communities, including institutions of higher education. The U.S. Centers for Disease Control and Prevention (CDC) has released guidance this week to help institutions prepare for and address coronavirus cases, while the U.S. Department of Education (ED) has appointed Mick Zais, the Deputy Secretary of Education, to coordinate ED’s coronavirus response.  The State Department and U.S. Department of Homeland Security have announced coronavirus-related immigration guidance and restrictions for foreign students and scholars, which are being tracked by NAFSA: Association of International Educators. 

While the coronavirus response is likely to continue to dominate federal conversations, ED is also advancing its ongoing regulatory agenda.  ED’s final rule on institutional requirements for Title IX compliance is anticipated to be released in the coming days or weeks.  Also, the Department is reviewing public comments, including a higher education community response from the American Council on Education (ACE) and other higher education associations, to ED’s proposal for institutional compliance with the First Amendment as a material condition for receiving research and education grants.  ED also pulled a controversial information collection request outlining institutional obligations to report foreign gifts and contracts under Section 117 of the Higher Education Act and reissued a slightly less onerous Section 117 collection proposal that is open for public comment through March 11.   

Lastly, the White House rolled out the Trump Administration’s fiscal year (FY) 2021 budget request in mid-February, which is detailed further below.  Similar to the last few budget proposals, the Administration’s FY 2021 budget calls for significant reductions to student aid, student support, and institutional grant programs at ED.  Congress is likely to wholeheartedly reject the proposed cuts. 

IN THIS ISSUE

CONGRESSIONAL UPDATES AND NEWS
Secretary DeVos Testifies Before House Appropriations Committee

Senate Hearing on Student Athletes 

Legislative Bills of Note


ADMINISTRATION AND AGENCY UPDATES AND NEWS
President's FY 2021 Budget Request Proposes Major Cuts to Student Aid, Education Research 

Attention Remains on Foreign Ties 

Open Grant Competitions at ED

2020 PRESIDENTIAL ELECTION
Tracking 2020

FACTS AND FIGURES
Is College Still Worth It? The New Calculus of Falling Returns

WHAT WE'RE READING
2019 NACUBO-TIAA Study of Endowments® (NTSE)

 

CONGRESSIONAL UPDATES AND NEWS 

Secretary DeVos Testifies Before Appropriations Committee
On February 27, U.S. Secretary of Education Betsy DeVos testified before the U.S. House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies regarding the U.S. Department of Education’s (ED) fiscal year (FY) 2021 budget request.  In her testimony, Secretary DeVos proposed making the Office of Federal Student Aid (FSA) a standalone entity and emphasized her support for  (second chance) Pell Grants for incarcerated individuals.  Secretary DeVos noted the Department’s proposal to combine several discretionary Minority-Serving Institutions (MSI) programs into a consolidated block grant in addition to consolidating TRIO programs into a “Student Supports Block Grant to States.”  Several members of the Committee expressed disagreement with changing TRIO support from a competitive grant competition to a formula grant.  Other issues raised by members and the Secretary included student debt, teacher shortages, and Title IX, among other issues.  

In what was a largely partisan hearing, members of the Committee on both sides of the aisle voiced support for the TRIO and GEAR UP programs and emphasized their importance to higher education.  Republican Members praised Secretary Devos and the Department for the budget’s proposed expansion of funding for Career and Technical Education (CTE) programs, which would include $2 billion for Perkins CTE state grants.  The hearing is the first step in a long process that will see members of Congress develop a funding bill for FY 2021.  The bill will largely reject the cuts and consolidations proposed by Secretary DeVos, though increased support for CTE could see support from federal policymakers interested in workforce development. 

Sources and Additional Information: 

Senate Hearing on Student Athletes 
In light of the growing attention to the question of student-athletes benefitting from use of their name, image, and likeness (NIL), a subcommittee of the U.S. Senate Committee on Commerce, Science, and Transportation held a hearing, "Name, Image, and Likeness: The State of Intercollegiate Athlete Compensation" on February 11.  The hearing focused on the impacts NIL would have on recruiting, employee relations, Title IX, and other issues.  A major concern is how to balance federal intervention in an environment where states are addressing the issue.  Witnesses included Mark Emmert, President of the National Collegiate Athletic Association (NCAA) and Ramogi Huma, Executive Director of the National College Players Association.  Mr. Emmert noted the need for guardrails to prevent inappropriate recruiting inducements while Mr. Huma framed the question as an economic justice issue for student athletes.  With March known for its increased attention on college basketball, it is likely that Members of Congress will continue to press for congressional action and introduce legislation on the topic. 

Sources and Additional Information: 

Legislative Bills of Note

  • H.R. 5869 (Representative Horsford, D-NV) - Skill and Knowledge Investments Leverage Leader’s Untapped Potential Tax Credit (SKILL Up) Act of 2020.  The SKILL UP Act would update the Work Opportunity Tax Credit (WOTC), which provides businesses with a tax credit for investing in work-based learning for employees.  View a press release on the bill here.  

  • S.3273 (Senator Kaine, D-VA) - Assisting Community Colleges in Education Skilled Students (ACCESS) to Careers Act.  The ACCESS to Careers Act would launch a community college and career training grant program that would provide funding to states and community colleges to address the evolving demands of the labor market.  View a press release on the bill here.  

  • H.R. 5784 (Representative Fudge, D-OH) - Supporting Minority STEM Student to Career Act.  This bill would update the Minority Science and Engineering Improvement Program, a U.S. Department of Education grant opportunity, by allowing institutions to provide scholarships to students from underrepresented populations pursuing STEM degrees.  View a press release on the bill here.  

ADMINISTRATION AND AGENCY UPDATES AND NEWS

President's FY 2021 Budget Request Proposes Major Cuts to Student Aid, Education Research 
On February 10, President Trump released his fourth budget proposal to Congress.  The fiscal year (FY) 2021 budget request reflects the political priorities of the Trump Administration and kicks off the federal appropriations process.  Similar to prior years, the request proposes drastic cuts to several student aid and education research programs at the U.S. Department of Education (ED).  However, Congress is expected to continue the trend of rejecting most of the proposed budget cuts through the annual appropriations process.     

Regarding student aid, the budget request recommends level funding for the Pell Grant, for a maximum grant award of $6,345 for the 2021-2022 school year.  However, the budget would cut $680 million in funding from the Federal Work Study (FWS) program and direct funding towards workforce and career-oriented training opportunities through a revision to the current institutional allocation formula.  The Federal Supplemental Educational Opportunity Grant (SEOG) program would be eliminated, as would the Public Service Loan Forgiveness (PSLF) program for new loans originating after June 2021.  The budget request would also consolidate loan programs to have one loan program per sector – undergraduate, graduate, and parents – while eliminating subsidized Stafford undergraduate loans and lowering the borrowing limits for Parent and Graduate PLUS loans.  The budget request proposes to streamline and replace current income-driven student loan repayment plans with a single plan that would have an increased monthly payment cap of 12.5 percent of discretionary income.  The proposal suggests ED will assess the transfer of the Office of Federal Student Aid (FSA) into a separate federal organization. 

The president’s FY 2021 request also proposes eliminations of several competitive grant programs, including the Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP), the Teacher Quality Partnership (TQP) grant program, and the Graduate Assistance in Areas of National Need (GAANN) program.  The request also proposes to reduce and transform the TRIO programs into a formula-based state block grant.  As included in last year’s Administrative proposal, the FY 2021 budget recommends consolidating several existing minority-serving institution programs under Title III and Title V, including Developing HSIs and Strengthening Asian American and Native American Pacific Islander-serving Institutions programs, into a single Minority-Serving Institutions (MSI) Grant program.  The request proposes $150 million, an increase of over $137 million, for the Minority Science and Engineering Improvement Program (MSEIP), specifically to support STEM activities led by HBCUs and Minority-Serving Institutions (MSIs) located in designated Opportunity Zones.  The request also proposes nearly $900 million of new investments in Career and Technical Education (CTE) programs.   

The FY 2021 budget request would cut funding for the Institute of Education Sciences (IES) overall by to $565.4 million, nearly $58 million less than from the FY 2020 enacted level.  Specifically, the budget request proposes level funding for the Research, Development, and Dissemination activities and Research in Special Education programs, but proposes eliminating funding for the Regional Educational Laboratories and Statewide longitudinal data systems.   

Sources and Additional Information:

  • Lewis-Burke's analysis of the President's fiscal year 2021 appropriations request is available here.

Attention Remains on Foreign Ties 
News on foreign influence and higher education has been steady with recent headlines being dominated by the arrests of researchers for failures to disclose ties with foreign governments.  In a press release from February, the U.S. Department of Education (ED) called attention to its continued investigations of institutions for failures to disclose foreign gifts and contracts as required by Section 117 of the Higher Education Act (HEA).  The release states "These colleges and universities actively solicit foreign governments, corporations, and nationals for funds although some donors are known to be hostile to the United States and may be seeking to project “soft power,” steal sensitive and proprietary research and development data and other intellectual property, and spread propaganda benefitting foreign governments." 

ED continues its efforts to promulgate Section 117 regulations with the release of an updated information collection request.  The request would propose a dramatic expansion of ED's collection of information and include the reporting of terms and conditions of gifts and contracts.  One improvement from the original information collection proposal relates to ED's request for "true copies of gifts and contracts."  ED is now likely to use notice and comment rulemaking as it relates to true copies of gifts and contracts.  Congressional legislation is also likely to be introduced, which would address reporting requirements for grants, tighten visas for international students and faculty working on sensitive technology, and Section 117 reporting. 

Sources and Additional Information: 

  • ED's information collection, with comments due March 11, 2020, can be found here

  • ED's February press release is available here.

Open Grant Competitions at ED
The U.S. Department of Education (ED) has the following currently open grant competitions of note:   


2020 PRESIDENTIAL ELECTION

Tracking 2020
With the 2020 field of Democratic presidential candidates narrowing, this update serves as a refresher on the college tuition, student aid, and loan forgiveness proposals from the four top remaining candidates: former Vice President Joe Biden, Senators Bernie Sanders and Elizabeth Warren, and former NYC Mayor Mike Bloomberg. 

All four candidates have plans that would provide universal tuition-free attendance at community colleges, but proposals vary on whether students could still accumulate debt by attending two-year colleges and whether four-year public institutions would be included as well.  Vice President Biden’s plan would make two years of community college debt-free for all but would not address four-year colleges.  Mayor Bloomberg’s plan promises debt-free education at both two-year and four-year institutions for “the lowest-income students.”  Senators Warren and Sanders have the most far-reaching plans, with Senator Warren’s plan guaranteeing tuition-free attendance at all public institutions and Senator Sanders’ plan guaranteeing tuition- and debt-free attendance at all public institutions, historically black colleges and universities (HBCUs), and Minority-Serving Institutions (MSIs). 

All four candidates also have plans that would expand eligibility or increase funding for the Pell Grant program to cover tuition, fees, or other costs not addressed under their free college proposals.  Both Vice President Biden and Mayor Bloomberg propose doubling the maximum individual Pell Grant award and expanding eligibility to formerly incarcerated students and Dreamers.  Senator Warren’s and Senator Sanders’ college affordability plans focus more on providing tuition-free college than on Pell Grants, but both propose expanding the Pell Grant program to cover other non-tuition fees and college costs.  

Finally, all four candidates would address student debt, either through reform of the loan repayment system or loan forgiveness.  Both Vice President Biden and Mayor Bloomberg would simplify the loan-repayment process by consolidating various plans into one income-driven repayment (IDR) plan, lowering the maximum loan payment from 10 percent to five percent of discretionary income, and forgiving the remainder of the debt after 20 years of payments.  Senator Sanders had made headlines for his sweeping debt forgiveness proposal, which would cancel all $1.6 billion in outstanding student debt. Senator Warren’s plan would cancel up to $50,000 in student debt per person, based on an individual’s household income.  

Sources and Additional Information: 


FACTS AND FIGURES

Is College Still Worth It? The New Calculus of Falling Returns 
"Meanwhile, the wealth-building advantage of higher education has declined among recent graduates of all demographic groups. Among all racial and ethnic groups born in the 1980s, only the wealth premium for White four-year college graduates remains statistically significant. Thus, we identify a striking divergence between the income and wealth outcomes of college graduates across birth cohorts." The full article is available here.

 


WHAT WE'RE READING

2019 NACUBO-TIAA Study of Endowments® (NTSE) 
"Due in part to strong 10-year returns, three-quarters of institutions increased spending from their endowments to support students and faculty, with an average increase of more than $2 million. Participating institutions put 49 percent of their endowment spending dollars to student financial aid, 17 percent to academic programs, 11 percent to faculty, and 7 percent to campus facilities." The full study is available here.

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