By Grady Brown
The nation’s budget has taken center stage on Capitol Hill, but one issue area that is gaining momentum outside the spotlight is education. The Federal Government’s two large pieces of education legislation – the Elementary and Secondary Education Act (ESEA) and the Higher Education Act (HEA) – are both up for reauthorization and Congress has been busy crafting new, reformed legislation. While the reauthorization of both pieces of legislation is long overdue, Congress finally has the impetus it needs to potentially reshape the federal role in education.
There is no better time for a revamped and refocused approach to higher education. The average student debt in the United States is $28,000. In Virginia, nearly 60 percent of students have student debt, averaging around $25,750.
The notion that college is becoming increasingly expensive isn’t new. An alarming 80 percent of Gallup Poll respondents said college was not affordable. With an economy that increasingly demands higher education, Congress can act in a number of ways to increase access to higher education through reauthorizing the Higher Education Act.
Reform the Free Application for Federal Student Aid (FAFSA)
Many college students are familiar with the hassles of completing their FAFSA. The application — over 100 questions long — is too complicated and convoluted. A recent analysis found that 2 million eligible students didn’t fill out their FAFSA, leaving nearly $9.5 billion in unclaimed Pell Grant funding. Republican and Democrat members of the Senate Health, Education, Labor and Pensions Committee advocate for limiting the FAFSA to two questions: family size and family income. Fortunately, President Obama recently announced changes to the FAFSA program that will make it more convenient for students. With the new changes, prospective college students can fill out their FAFSA in October, during the college search, rather than in January. Students will also be able to use tax information from the previous year. Nevertheless, the reauthorization of HEA needs to include further reforms to the FAFSA to make it easier to navigate.
Deregulate Higher Education
Federal regulation in higher education is important in ensuring that institutions spend tax dollars in a responsible way. However, overregulation is inefficient and expensive. Vanderbilt University hired the Boston Consulting Group to quantify the cost of overregulation. Their report found that Vanderbilt spent nearly $150 million in compliance cost. That’s $11,000 per student — over one fourth the total cost of tuition at Vanderbilt. While there is a need for some oversight, the Federal Government’s regulatory footprint has continued to increase. A reauthorized HEA should include clear, strict policies for federal oversight to reduce costs.
Risk Sharing Policies
The Federal Government should also look into policies that encourage reduced costs through risk sharing. Currently, taxpayers and students bear the risk of loan defaults. To reduce costs, institutions must take part in the “risk” associated with student loans. One way to accomplish this would be to require universities and colleges to pay back a portion of federal aid they receive. The repayment amount could use a series of metrics (such as graduation rates and the percent of students defaulting on their loans) to incentivize higher education institutions to lower their costs and make college more affordable.
Congress cannot afford to postpone the reauthorization of the Higher Education Act. Mounting student debt and increased college costs are becoming more and more burdensome for students across the country. Fortunately, there is a lot of bipartisan support for reform, and policy makers appear determined to finish off both pieces of legislation before the end of the year. Hopefully the reauthorized Higher Education Act will include reasonable policy changes that will help make college more affordable for everyone.