What the Biden administration and a Democratic Congress could mean for higher ed

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What the Biden administration and a Democratic Congress could mean for higher ed

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Higher ed leaders are full of anticipation, wondering what the Biden administration could mean for higher ed, once they take office on January 20, 2021. During their campaign, President Biden and Vice President Harris proposed noteworthy higher education policy changes that could transform the industry, ranging from “free college” to a massive expansion in research spending. Democratic control of the House and the Senate will now give them a chance to deliver on these proposals.

The stakes for federal action are high. Colleges and universities face unprecedented financial disruption due to the pandemic. Years of neglect have left postsecondary education regulations and funding inadequate for today’s students and institutions. Meanwhile, the international education landscape has grown more competitive, and the US is at risk of losing its innovation centrality.

With so much at stake, education leaders want to know what to expect from the Federal Government over the next two years. To help leaders prepare for the Biden administration, EAB assessed the likeliness and impact of its potential higher education policy proposals below. Following this analysis, we also offered some advice for leaders to bear in mind across the coming weeks.

Potential policy assessment

Legislation

Democratic control of Congress could bring about consequential new higher ed legislation. But slim Democratic majorities in both chambers and fierce partisanship will diminish what Congress can accomplish. Specifically, legislators will need to compromise with more moderate members of their caucus who will likely object to more liberal policy items that gained popularity during the 2020 Democratic primaries—like free college and wholesale student loan forgiveness. That said, even if the Congressional makeup limits more transformational proposals, there still will be opportunities for Congress to tweak—and perhaps even reshape--key pillars of US higher ed.

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EAB has assessed the likelihood of specific legislative changes below:

Likely

Congress will attempt to pass another $1.9T stimulus package in the first half of the year, including additional funds for colleges and universities. President Biden proposed allocating $35B for public institutions, HBCUs, and MSIs, substantially more than the $23B awarded in CRRSAA. However, the President’s original proposal appears to exclude non-profit private institutions from this additional institutional aid. Congress is likely to revise this to include private institutions when they start drafting their version. This will provide much needed financial support to institutions as they continue to navigate the pandemic’s impact on their operations. In addition, additional support for state budgets could alleviate the most drastic cuts to public higher education funding.

Democratic and student activists, along with companies and state leaders, will place significant pressure on Congress to tackle the college affordability crisis. In turn, Congress will attempt to double the maximum Pell grant and expand its eligibility (potentially for non-degree programs). Congress will likely prioritize community colleges over 4-yr institutions for more expansive federal aid, given their access mission and bipartisan congressional support for their role in job training and upskilling.

Student success, especially at community colleges, is a major priority of President Biden’s. Dr. Jill Biden, President Biden’s wife, is a community college professor and will continue teaching as the First Lady, elevating community college issues directly to the White House. His proposal to create a dedicated grant program to fund student success initiatives at 2-yr and 4-yr institutions is popular with Congress and could end up in a large omnibus package (i.e., a single bill that covers multiple different policy spaces).

Student loan reform is likely to be on the 117th Congress’s agenda. However, the size of potential debt forgiveness (e.g., $10K vs. $50K) is uncertain, as is the income threshold for eligibility. Further, it’s unclear whether debt forgiveness needs to come from Congress: should the legislature be unable to act on debt cancellation, the Biden Administration may attempt to act through executive action, although President Biden has expressed reluctance to do so given questions around the legality.

President Biden’s Made in All America plan, along with his healthcare and climate change proposals, calls for an unprecedented expansion of federal research and development spending. In accordance with these plans, Congress is likely to appropriate large-scale investments in key federal funding agencies, such as NSF and NIH, to promote economic recovery and other specific policy goals (e.g., clean energy).

Possible, but less likely

While proposals to achieve “free college” vary substantially, most rely on either shared federal spending with already cash-strapped states or new taxes levied on wealthy individuals or financial services firms. Because of state budget challenges and opposition to new taxes (by both Republicans and moderate Democrats), these proposals are unlikely to pass. Congress is more likely to pursue some form of “debt-free” college than the more robust standard of “free college”.

It has been almost 13 years since Congress last renewed the HEA, since relying on temporary extensions rather than bolder legislation. Many in Congress would welcome the opportunity to update the relationships between the Federal Government and higher ed through a more robust law that better meets the needs of today’s students and institutions. However, getting a new HEA passed through the Senate will be difficult because of the numerous and contentious political issues it touches on (e.g., Title IX). Congressional leaders may avoid spending their political capital on a full HEA reauthorization and choose to do a piecemeal reauthorization instead, if at all.

Congress is unlikely to prioritize repealing the Trump-era tax on university endowments. As only 24 to 40 institutions are subject to the tax (and they happen to be the most well-resourced universities in the country), Congress will have little urgency to act here, unless the provision is swept into a broader omnibus package.

Regulation

Outside of Congress, the Biden Administration will use executive authority to implement changes in higher ed policy. The Education Department (ED), under Secretary-Designate Dr. Miguel Cardona, will reimpose Obama Administration rules that clampdown on for-profits, promote consumer protection, and enforce stricter Title IX requirements. Undoing DeVos-era rules will take time, but the new ED is expected to ultimately expand its rulemaking authority further into untested areas (e.g., non-degree credentials). Outside of ED, other agencies that touch higher ed (e.g., the Internal Revenue Service) will also be rolling back Trump-era rules and drafting new regulations.

Likely

President Biden’s ED will seek to provide additional relief during the pandemic to individuals with student loans. The current freeze on interest will continue, and other pathways to either forgive or lessen the burden of student debt will be actively explored.

The Obama Administration’s Borrower-Defense and Gainful Employment rules sought to crack down on fraudulent education providers and protect students. Secretary DeVos attempted to repeal these rules but ran into litigation and procedural requirements that forestalled her effort. The Biden Administration will reimpose and strengthen these rules to clampdown on dubious for-profit providers.

The Trump Administration took aggressive actions to curtail foreign workers from entering and working in the US. This constrained university talent pools and weakened international enrollment. President Biden’s Homeland Security and Labor Departments will work to undo many of these restrictions, helping institutions better access international talent.

Possible, but less likely

ED may create new rules addressing non-degree credentials and OPMs to provide increased consumer protection. For non-degree credentials, universal standards could help the market grow by giving consumers, accreditors, and companies greater confidence in their value. Moreover, Congress may pressure ED to revisit regulations of OPMs under the Incentive Compensation Rule, as several senators, including Elizabeth Warren, have questioned the legality of their tuition-sharing agreements. Previous ED investigations found them to be legal under the HEA, but ED could write new rules to clarify their standing.

The Trump Administration pursued a pan-agency policy of reducing foreign interference on university campuses. This resulted in stricter Section 117 rules and a host of high-profile prosecutions. President Biden plans to maintain a strict posture against China and will continue to urge universities to do more to protect sensitive research.

4 guiding considerations for higher education leaders in the Biden era

To help leaders prepare for the Biden Administration’s forthcoming policy agenda, we recommend that they bear in mind these four guiding considerations:

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Calibrate expectations for incremental over transformational

Higher ed faces extraordinary viability pressures. The industry needs federal help to address both the immediate COVID fiscal fallout and longer-term existential threats (e.g., affordability and access). However, the Biden Administration has a lot on its plate, and tight Democratic majorities will impede transformational policy changes. Inevitably, there will be trade-offs in balancing competing principles, pressures, and politics that will limit attention to higher ed needs—and the boldness with which they’re undertaken. Therefore, education leaders should expect a more favorable policy environment but mostly incremental changes that leave many structural problems unaddressed.

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The administration will largely focus on helping students, not institutions

Institutions are currently clamoring for greater fiscal resources from the federal government, but most of President Biden’s priorities view institutions as means to other strategic ends (e.g., economic development). Moreover, most proposed federal higher ed policy and funding is directed at supporting students, primarily through federal financial aid. (Some exceptions exist: most notably, HBCUs, MSIs, and TCCUs are slated for increased institution-level investment over the next four years.) With this prioritization in mind, college and university leaders should frame their policy needs through a student-first lens when advocating to the new administration.

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Policy volatility will continue (just not via Twitter)

Even with a Democratic-controlled government, elevated political tensions, legislation through massive stimulus omnibus packages, and litigation surrounding federal rule-drafting and implementation will add unpredictability. Leaders should expect continued uncertainty around policy proposals, vague compliance requirements (e.g., CARES institutional aid reporting), and political scrutiny on the industry.

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Make the most of the moment

While the Biden Administration is unlikely to deliver higher education leaders’ full policy wish list, leaders will have far more opportunities to shape policies, to advocate for the value of higher education, and to pursue changes that benefit students, institutions, and the economy. For example, a major federal stimulus package could give institutions a once-in-a-generation financial opportunity to invest in their institution and transform their value proposition. Leaders should engage with policymakers and proactively collaborate with colleagues at other institutions to reclaim the narrative of higher education as a public good. In particular, they should emphasize their value in economic development, social mobility, equity, and innovation to maximize their political clout.

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