Jon Fansmith: Welcome everyone to the December episode of dotEDU Live. I am joined today by my regular co-host, my colleague Sarah Spreitzer. Sarah, how are you?
Sarah Spreitzer: Great. But you didn’t introduce yourself.
Jon Fansmith: I didn’t introduce myself?
Sarah Spreitzer: You going to say who you are?
Jon Fansmith: I can. My name is Jon Fansmith,
Jon Fansmith: And I am ACE’s senior vice president for Government Relations and National Engagement. And thank you for the reminder, Sarah.
Sarah Spreitzer: Sure, sure.
Jon Fansmith: In case people are unfamiliar with me. If you’re unfamiliar with the two of us, I’m not sure why you might be joining us, but we’re happy to have you-
Sarah Spreitzer: They might be first-time listeners, you never know.
Jon Fansmith: First-time listeners. I love that.
Sarah Spreitzer: First-time participants. Yeah.
Jon Fansmith: Well welcome, whether it’s your first time or you’ve been watching us for all of our 101 episodes between this and the podcast. A lot of time. So what’s going on, Sarah?
Sarah Spreitzer: Getting ready for the holidays. I’m ready to leave town with Congress. I was watching a hearing today, and it’s clear Congress is ready to get out of town. They, like the rest of us, I think are counting down the time to the holidays.
Jon Fansmith: The irony of course being that Congress is mostly the reason I think we’re all desperate to get out of town too.
Sarah Spreitzer: Yes.
Jon Fansmith: So we share that impulse. But Sarah, we have something of a tradition here that is the December episode. We always do a rundown of the year in the past. I think we’re calling it the top policy issues of 2023, but we’ve done other things before. What happened, the year in review, things like that. So we want to do that again. That seems to be really popular. We hear a lot of nice comments about that from viewers and people who have been watching us. So we’ve got a lot on the plate when we sat down and talked about what to go over from 2023. It has not been a boring year.
Sarah Spreitzer: No, no, definitely not. And I hadn’t realized this was a tradition. I was going to ask you if this was in keeping with Festivus, if this is our annual airing of grievances. Or if it is the top policy issues.
Jon Fansmith: I was going to say, to be fair, most of our episodes involve some airing of grievance.
Sarah Spreitzer: That’s true.
Jon Fansmith: Either personal or policy related. So I don’t know that that’s a huge difference, but at least we’re going to be going through the whole thing now.
Sarah Spreitzer: Yeah, which is great, ‘cause we get to look back at this amazing 2023, which I actually was referring to as 2024, so obviously, I’ve been paying a lot of attention this year. And I think one of the first things we talked about, Jon, when we sat down to make the list was chaos in Congress as the number one thing, which I find interesting because I think we throw that word around a lot, “chaos,” right?
Jon Fansmith: Yeah.
Sarah Spreitzer: But this year was definitely one for the history books. So what would you put under that umbrella of chaos in Congress?
Jon Fansmith: I mean, you could really put everything under that umbrella, because this dysfunction, it leaves a stamp on everything else Congress is trying to do.
And I did think it was interesting, so it was announced last week that both Kevin McCarthy and Patrick McHenry would not be returning to the Congress next term. They’re stepping down after this year. And if you think about the fact that not just did we have for the first time ever Congress kicking out the speaker of the House, you add to that that the pro tem speaker of the House, Patrick McHenry, and the former speaker both will not be returning. I mean, it’s kind of a little snapshot of things you don’t generally see.
This has been a very unusual, chaotic year, and I think the thing that really carries over from our policy perspective is that it’s not just that there’s chaos, right? There’s always been partisan fighting, there’s always been some dysfunction. Congress has been less and less effective at moving legislation over the last few congresses.
But the bigger thing I think is this idea that when you look at where the dysfunction’s coming from, it’s not divided government, Republicans versus Democrats. There’s always some of that, right? It’s not Congress versus the administration. There’s some of that. It’s within the parties themselves, particularly within the House Republican caucus, but across the range, certainly in the Senate you see this too where it’s less important your party affiliation, and more important which part of the caucus you belong to.
And a lot of the most bitter fights we’ve seen this year are not Republicans versus Democrats. It’s been Republicans in the Freedom Caucus or on the far right of that caucus with the more moderate members who might’ve won election in Biden districts and trying to fight over where they want to position for policy with members of their own party.
And that’s where we got the speakers election and Kevin McCarthy being booted from the job, this kind of thing, this factionalism, you have these tight margins. The leadership can’t afford to ignore any vote. It just creates a whole lot more chaos in the system, less predictability, less authority for leadership to move things, harder to predict what they’re going to do and what they’re going to work on. Because a lot of the issues just roll up to the leadership level. They move very quickly behind closed doors. You have less ability as advocates to influence things. It’s just a difficult environment. It really is.
Sarah Spreitzer: Yeah. And I think, looking back, Kevin McCarthy started the year with a very historic vote for speaker. It took 19 times for-
Jon Fansmith: 16, I think.
Sarah Spreitzer: Okay.
Jon Fansmith: 15 or 16.
Sarah Spreitzer: It was more votes-
Jon Fansmith: Most in 100 years.
Sarah Spreitzer: In 100 years that he had to get. It was a very hard-fought speakership, one in which, I don’t know if you remember this, but he had to cut a lot of deals. So one of the things we watched closely at the beginning of the year was who was going to be chairing different committees because there were committee chairs that were picked based on politics and promises made based on their vote for speaker.
And of course then that led to the debt limit discussion in the summer. Which obviously has a huge impact on higher education, because then you’re talking about government funding for everything from student aid to our research funding. And I think we then saw that in the appropriations bills, those deep, deep cuts that I think in past years we would’ve called them very extreme parts of the party, but a very vocal part, trying to get these deep cuts in the domestic programs.
Jon Fansmith: And I think funding’s the perfect place to look at this too, because it was funding that actually led to the motion to vacate the chair that was brought against Kevin McCarthy. It was a disagreement over not just his agreeing to what many conservatives felt were too high funding levels, but then actually the real trigger was pushing through a continuing resolution to extend government funding at that level to buy more time to do a final deal. And that’s what did him in.
And you see these things, a deal that Republicans in the House were central to negotiating around the debt ceiling increase, a month later, because a large section of the caucus felt very strongly about lowering funding levels, essentially, they walked away from that agreement, drafted bills at a lower level. Funding is a really great context to put all of this intraparty warfare that we’ve seen into understanding it within that context.
So it’s been an interesting year. And we’re looking at next year, we’re talking about this year in review, but we now have for the first time ever a CR that sets two different dates for different agencies for their funding to run out. One of those is January 19th, not that far away, since there hasn’t been any progress really on overall appropriations or talking about funding levels.
But two deadlines is another level of complexity. Not clear that there’s a lot of experience about how you’re going to prioritize that, how you usually... I mean, the advantage of an omnibus is you bundle everything together and it’s hard to get no votes in opposition because somebody cares about something, and they’re splitting it up this way. In many ways, it’s going to make it even harder for leadership to muster people to vote because, again, you’re splitting out distinct pieces that they can find opposition for. It really is a bad situation, especially around funding, and it’s going and carrying into the next year.
Sarah Spreitzer: Yeah. And for our priorities, I think that leads us to our second issue that we put on our list, Jon, was hostility towards higher education. I think the cuts that we saw, the zeroing out of Federal Work-Study, of SEOG and other things, usually you can count on somebody to speak up for higher education. We still have champions in Congress, I don’t want to say that we don’t, but I think that this year was also very much marked with hostility towards our institutions, hostility towards higher education, not just coming from one party.
Jon Fansmith: Yeah. I mean, this is one we could unpack across multiple episodes, right? This sense of hostility towards higher education institutions. It’s been particularly pronounced at the back end of this year. It’s certainly top of mind I think for a lot of people right now. But it didn’t start in 2023.
We certainly saw at the state level legislation introduced again and again and again, some of which was enacted, that would seek to upend how tenure is handled on campuses, or how institutions are governed, particularly in the area of diversity, equity, and inclusion efforts on campuses. How those are staffed, how those are funded.
What was surprising in some ways was we are somewhat familiar with this at the state level, these things not to quite the same degree as we’ve seen over the last few years, but that has been there in the past. The migration of those kinds of approaches to the federal level is, I think, relatively new.
We didn’t really use to see these kinds of strikingly partisan positioning on different sides of the issue at the federal level as much in the education committees. They tended to be much more bipartisan. Historically, higher ed policy has always been pretty bipartisan. And this schism between the two parties on higher education is pretty telling.
And it’s worth noting it’s not that one side is supportive and the other side is critical. Both sides are critical; they’re just critical about different things. They both see different problems. In many ways, some of the problems we’re having is that there is consensus of... And I think we’ll talk about a little bit, but especially with elite institutions, there’s criticism on both sides for different things, but criticism of those institutions on both sides.
So when you see something like... And we’ll talk about the offset and the short-term Pell program, we’ll come back to this, but that offset is targeted at a handful of 40 or 50 institutions that are subject to the endowment tax. You get these kind of policy options where the dissatisfaction on both sides allows them to focus in on and use, frankly, in this case, a pretty punitive measure for a handful of institutions that they’re currently upset with. It’s not great policymaking. It’s terrible policymaking. But given this broader concern about institutions, it’s somewhat inevitable.
And I think, again, the biggest thing recently has been around campuses’ handling of antisemitism. And we saw the hearing last week. I think everybody watching this has probably at least seen clips from that hearing. As we know, the president of Penn resigned over the weekend, in large part due to fallout from that hearing.
But that’s not it. Right? As striking as that hearing was, regardless of your perspectives on the testimony that was offered, and I’m sure there’s a range of opinions there, but it’s only the first part of this. Congress is very clearly dissatisfied with what they’ve seen from institutions. The Ed and Workforce Committee is opening formal investigations, not just into MIT, Penn, and Harvard, but they’ve announced it’ll be into lots of other institutions as well. They’re going to subpoena documents. They’re being very aggressive about that. And in some ways, say, “Well, they had the hearing, they’re doing this. They’re continuing that positioning.” That very overtly critical positioning of higher education institutions.
But keep in mind, the Office of Civil Rights at the Department of Education has also opened, I believe, at this point seven investigations into higher ed institutions and one, I believe, into a high school. We expect to see more investigations announced by OCR. This is not a partisan issue. The Biden administration wants to be seen as being aggressive in this context. And again, it comes back to institutions squarely in the focus, institutions being targeted from both sides.
Sarah Spreitzer: Yeah. And I don’t see this going away in 2024. I mean, the very serious issue of antisemitism may change, but I think this criticism or close examination of higher education in the United States is just going to continue, especially in the lead up to the presidential election. We’ve already seen the candidates start staking out positions on higher education and how they would fix it, and I think that it’s just going to continue into 2024.
Jon Fansmith: Yeah, I think you’re exactly right. When you look at some of these things, there are clearly aspects of this that are driven by policy concerns, right? Congress has a responsibility to oversee what’s happening, especially given the amount of federal support to higher education institutions.
That said, there’s a really big political motive here too, and that’s one of the reasons we’ve seen a growing partisan split. There’s a lot of data about this, that Democrats tend to represent districts overwhelmingly that have higher levels of educational attainment. Republicans, the reverse is true. There is some splitting among the parties as identification with a party by education level. So you see this kind of growing views of higher education that are very different that are politically driven. You’re responding to what your constituents want, given the public response.
And I’d say it’s not just the handling of antisemitic expression, or actions, or threats, or acts of violence on a campus. We’ve been talking about this when it came to loan forgiveness. There are things that are very high-profile for the public that are beyond what we think of the policy world. The broader public cares about these things. And it allows politicians, both sides of the aisle, to frame their views in a way of something they know their constituents now care about.
Like why does college cost what it costs? Is it affordable? Should we be forgiving debt? Are campuses truly places of free expression or do they only allow free expression for one side of the issue? It’s a really rich area if what you’re trying to do is motivate your voters and define where you stand on something because it’s something voters are paying attention to through the media in other ways. It sets it up for them to do that. So of course, absolutely. Big election coming up, politicians are going to seize on that.
Sarah Spreitzer: Well, and you touched on Public Service Loan Forgiveness and loan forgiveness. But I think the third thing we wanted to touch on really in the world of Washington, DC, and higher education was the Supreme Court decisions that we had this year, which, obviously, a huge impact on our institutions.
Jon Fansmith: And it’s in part because of that failure of Congress, right? A very active Congress that was doing consistent oversight of the executive branch, was pushing back, was passing legislation, making it clear what their priorities were. If Congress were doing those things, we wouldn’t, I think, see quite as much activity and quite as much impactful activity from the Supreme Court.
Some of this, there are obviously varying different views about how far the court has become politicized. There’s a clear, heavy conservative majority on the court, which may make some of these things inevitable, even without whatever Congress was doing. But really what we’ve seen, and we’ve seen it over numerous presidential administrations, is Congress’s inability to do oversight to limit the executive has allowed the executive to expand and expand and expand.
And this Supreme Court is incredibly suspicious of executive authority. They have already had one ruling—I’m not going to go too much into legal stuff—but they’ve already passed one ruling called West Virginia v. EPA that created something called the major questions precedent, essentially saying statute alone isn’t necessarily the authority for agencies to regulate at a very large level. They have to be much more thoughtful about what was Congress’s intent.
There’s a precedent in law, the Chevron case, goes back to a case in 1984 that essentially says where it’s not clear what Congress wants agencies to do, you give deference to the agency’s interpretation. It gives the authority to the agencies. This West Virginia v. EPA decision, first decision by this court that really cut that down, limited it. They’ll be hearing another case in the fall session. It’s called Loper Bright Enterprises v. Raimondo. It will take another crack at Chevron and essentially even further narrow the discretion of executive agencies. I’m sure at this point people are wondering, “Why is he talking about this?”
Sarah Spreitzer: Yeah.
Jon Fansmith: I mean, Sarah, you look like you’re wondering why-
Sarah Spreitzer: Yes. Tell us, why are you talking about this, Jon?
Jon Fansmith: Well, right. And I think the reason why we’re talking about this is it’s not environmental regulations. It’s not fishing, which is what Loper Bright Enterprises is ostensibly about. It’s really about what can executive agencies do, and how much authority do they have, and restricting that, narrowing that, saying, “Only if Congress has specifically said you can do this, can you do this.”
If you think about what the Biden administration has done in higher ed over the last two years, you look at things like gainful employment, financial value transparency, the Title IX regs that they’ve announced will be coming in March. These are enormously impactful regulations. The statute’s not necessarily clear that they have the authority. Gainful employment’s a perfect example. There’s very little legislative text, statutory text around gainful employment, but it’s become a pretty expansive set of regulations that applies to now every program in higher education, at least the reporting parts and the data parts.
So if you have a Supreme Court now saying you don’t really have the authority to do that, expect to start seeing not just the lawsuits we tend to see around regulations, but ones that will move successfully through the courts limiting and limiting and limiting agencies’ roles to impose these things. We are a heavily regulated industry. That kind of a fundamental shift in how regulations are handled and the authority of the agencies has the possibility to really upend how we operate and what the federal relationship to campuses is.
Sarah Spreitzer: Well, that seems to be a 2024 issue that we can worry about in January. I thought when we touched on the courts, you were going to say something about the Harvard UNC decision on race-conscious admissions, which happened this year. That’s a huge thing and one of those things that I’m already like, “Was that last year or was it this year?” But obviously that had a huge impact on our institutions.
Jon Fansmith: And one impact that I think we’re still working through. When you talk about some of the issues around the handling of speech on campus, in some ways kind of a similar thing. There’s not really a clear playbook here.
The Supreme Court ruling is relatively definitive in terms of admissions. But now, we’re seeing in the courts numerous other challenges seeking to say, well, either that is narrowly tailored to admissions. Can you consider race as part of a holistic admissions process or is it more expansive? When you have student groups, can they exclude students based on race? Can you have scholarship programs that exist for students in which race is a consideration for the award of those scholarships? There are numerous lawsuits headed to the courts now, and certainly given this court, in these areas, I don’t think we’re hopeful that they will be looking to expand our authority in these areas. They’re very much interested in narrowing it.
So we’ve got that. We’ve got loan forgiveness, which is another great example of this court’s suspicious of executive authority, saying it’s overreach by the administration. Again and again and again, the court is essentially coming in and checking the administration with big impacts for public policy, and how-
Sarah Spreitzer: Yeah. And I think loan forgiveness, what we saw was we came out of COVID, the Biden administration proposed this broad forgiveness of student loans. And I think that one of the things that there’s a lot of bipartisan agreement on, whether or not they agree on loan forgiveness, is college cost and accountability.
And that was the next issue that we put down on our top policy issues was these accountability calls, which I think are coming from a very bipartisan place, but we’ve seen a lot of regulations this year from the Department of Education. They’ve done a very, I think, aggressive negotiated rulemaking process. They’ve been doing a lot of negotiated rulemaking. It seems like they finish one and then they start a new one. And that’s going to go into 2024 on a lot of these issues.
Jon Fansmith: Yeah. And a couple of their very big packages are finalized, right? When we’re talking about accountability, the gainful employment, financial value, transparency regs, those were finalized. They’re going into effect. Institutions will be under obligations to report data starting next year.
There’s some other things that are hanging out there that are big. Title IX, again, was supposed to be released in October. They’re saying it’ll be released in March, I think. Here in Washington, there’s a lot of expectation that that March deadline’s a pretty soft deadline, that that may fall back again.
But you add to it the numerous rounds of negotiated rulemaking they’ve already done. Another session with five issues, starting in January. It’s nonstop. There is regulation after regulation after regulation being pushed through this administration.
In part because Congress isn’t acting, in part because where we started, this administration sees very clear problems, particularly around what students are borrowing and what they can afford to repay. And they want to put in rubrics, regulations around programs specifically, moreso programs and institutions that may limit the availability of those programs to access Title IV aid. If they think that there are bad financial returns for students, they want to be able to hold those programs accountable and cut off aid to them.
I think we have many concerns about approaches like that, that certainly they’re high risk. They’re not necessarily as well targeted to where the problems are. But this is a clear point of emphasis for the administration.
We’re going to talk, I know in just a second about short-term Pell. But the short-term Pell bill is a pretty good reflection of that from the congressional side, right? They put in numerous provisions around what a program would need to do to qualify to be eligible for the aid, in part because they want these accountability metrics. And there’s a growing sense of putting it in upfront in some ways, getting limitations on participation as the key for holding institutions accountable.
Sarah Spreitzer: So Jon, before we move off of accountability, we did have one question about the GE, the gainful employment regulations, which you said were finalized. Do you see those being stopped by the courts, or do you think they’ll be implemented next year?
Jon Fansmith: I think everyone assumes there will be litigation, that someone will sue to block those, will seek an injunction against the implementation of those rules. How successful will they be? I think that’s a harder question to answer. They went through a formal rulemaking process. They observed the GEPA provisions. They did it in the right way.
Now you get into this question, which has been there with gainful employment for the last 13 years, since the Obama administration began their attempts to regulate in this area, that does the statute really lay out this authority? Like I said, there’s very little in HEA about gainful employment programs, defining them, what the secretary’s responsibility is to oversee them. That certainly would make them susceptible to a legal challenge. They’ll face one. What the outcome will be I think is harder to see, but there will probably be some pretty good cases about the impact on institutions coming from it, based on the department’s own data showing the number of programs of different institutional types would need to close under the new regulations. There’s certainly harm out there as a result of this. Just whether the legal arguments hold up I think will be interesting to see.
Sarah Spreitzer: Yet another thing to look forward to in 2024. But the next issue that we put down, and we often laugh about this, is reauthorization of the Higher Education Act. We’ve said before many of us will have retired and be gone by the next time Congress gets around to reauthorization of the Higher Education Act. But this year, we did see pieces get introduced in a bipartisan way. And I know you really want to talk about the short-term Pell bill that’s being marked up actually today by the Committee on Education and the Workforce and is bipartisan. So I guess first, what do you think for 2024? Will we actually see a full reauthorization?
Jon Fansmith: Yeah, so I mean it’s the same answers as always, right? I feel bad about that.
Sarah Spreitzer: Let’s make bets, and then we’ll come back and we can listen to this at the end of 2024.
Jon Fansmith: Sure. So I will say what I’ve been saying for a long time. HEA as a whole is just such a big, complicated, expensive, if you’re changing the loan programs and things like that, beast that in some ways it becomes really hard for either party to produce a bill that will receive bipartisan support but that also addresses their priorities. There’s so much to deal with there.
Which I think is why you’ve seen, Chairwoman Virginia Foxx of the Education and the Workforce Committee, made it pretty clear in a press conference after they rolled out one piece of legislation on it this year, they’re going to do these standalone bills. That will be their approach to reauthorizing HEA. They can’t do everything. They won’t do everything, but they’re going to introduce in discrete areas where they think they can make changes, and where so far at least they’ve been able to find bipartisan compromise.
Certainly, if you are looking to amend HEA, it is probably the most realistic way to do it because you won’t be able to navigate a giant bill, most likely, but you can start navigating a bunch of individual bills. And credit to the chairwoman and the ranking member on that committee. They’ve come together on short-term Pell. They’ve come together on the Workforce Investment Opportunity Act, which is also being marked up today. They are finding areas to agree and draft legislation, put that together.
Do we always love what’s in there? Well, no. But in some ways, it’s nice to see Congress acting and taking on the responsibility of working collaboratively to produce legislation. We haven’t seen a lot of it recently.
Sarah Spreitzer: Yeah. I know that you and our colleague Emmanual and others have been very busy regarding this short-term Pell bill. So do you want to give us a short kind of what’s in it and what our positioning is on it?
Jon Fansmith: Yeah, and I think most people are generally familiar with short-term Pell. This is the idea that there are a whole range of programs that campuses offer that generally don’t lead to a degree, particularly around certificates. And these courses, programs are of relatively short length, about between 150 and 600 hours, between, I believe, about eight and 15 weeks in length. I think that’s what the parameters the bill lays out.
Before those programs were not, because they don’t lead to degree, eligible, students attending them couldn’t get a Pell Grant. But we know that a lot of these programs are very skill-specific. They’re very focused on career needs. And so there’s a lot of unmet need within the federal aid system for students who want to do something short of a degree but need some postsecondary education, the ability to afford that.
And so at ACE, I know a number of other organizations, we are very supportive of the short-term Pell concept. This bill, we have always said we like the idea. We are concerned about appropriate safeguards being in place, in part because we have seen in the past that when you expand financial aid eligibility, you tend to get some bad actors enter the system, right? There have been peaks and valleys of fraud and abuse with financial aid, that tend to correspond with whenever the system is widened. So with appropriate safeguards, I think it’s the right thing to do. That’s been our position.
This bill has pretty strong safeguards. You need approval of the program by the local workforce board. There’s pretty stringent requirements on accreditors to certify the institutions are doing things around the program around disclosure of information, providing information to their students. And then beyond that, the Department of Education has a number of specific metrics tests. Are you earning enough out of the program after you’ve left the program? Are you employed? 70% employment rates after your leave of the program. Are you earning more than a high school graduate, essentially an earnings premium? Those are all relatively reasonable metrics. They’re frankly much more stringent metrics than apply to most other degree-granting programs under federal law. So it is a pretty rigorous regime.
Things we would change about it; we’ve been talking with staff about some of the concerns we have around the policy of the bill. But the biggest concern we have right now with the bill that’s being marked up today isn’t really about the policy around short-term Pell, and there’s disagreements within the community. People feel differently about that. But everyone agrees that what they’re doing on the offset is incredibly problematic.
And for those who don’t know, an offset is essentially finding money from somewhere else to pay for what you’re doing. They’re required to do it under House rules. They have to find money from somewhere to pay for the cost that a lot more students will now be getting Pell Grants. The way they did it in this bill was to say that any school subject to the endowment tax, the endowment excise tax, it’s about 50 to 60 institutions, I think is the most recent estimate from our friends at NACUBO-
Sarah Spreitzer: And that’s private, right? Private institutions-
Jon Fansmith: They are only private institutions currently, yes. That they will no longer be able to participate in the Stafford federal loan programs or the Graduate PLUS loan programs, and can only participate in Parent PLUS loans if the parents are parents of a student who is not a Pell recipient. So the parents of Pell recipients can’t borrow through a Parent PLUS loan.
It’s essentially kicking those handful of institutions out of the financial aid programs, the lending programs, as a way of paying for this other expansion of eligibility. Again, there can be differing opinions about the policy, but what’s abundantly clear is this is targeting a group of institutions that right now are facing a lot of political headwinds. It is also doing it in a way that’s unprecedented for federal financial aid. We have never before had Congress pick and choose groupings of institutions and say, “Well, these institutions are more worthy of an expanded financial aid portfolio, and these other ones are less worthy of that.”
It’s a dangerous precedent to set because we do not want Congress picking the winners and losers. Part of the appeal of the current system is an individual’s needs are determined based on their circumstances, and they take their aid to different institutions. That choice is a hallmark of our system. If you start limiting what institutions are qualified for, that element of choice starts dropping. It also makes it frankly harder for students to figure out what their options are. It’s very bad policy, and we are hopeful that the committee will find another way to pay for this bill that doesn’t cause the harm that their current offset does.
But it hits those two things, right? Criticism of elite institutions and the growing hostility towards higher ed, making higher ed institutions pay for an expansion of benefits out of funds to other institutions.
Sarah Spreitzer: Yeah, and I-
Jon Fansmith: Sarah, you are... Yeah, go ahead.
Sarah Spreitzer: Yeah, I was just going to say on the short-term Pell, I know that we’ve pushed out talking points. We recently did a letter outlining our concerns, and perhaps our producers can share that in the show notes or in the chat with the audience. Just wanted to add that.
I think you were going to turn to my part of the Higher Education Act, Jon. The most important part, obviously, Section 117, foreign gift reporting. And that’s been a piece of the Higher Education Act that there’s been a lot of bipartisan support for doing something around that, especially because there continues to be bipartisan concerns about certain countries, such as China and Russia, especially around the areas of foreign malign influence and research security.
And so we recently saw the House pass the DETERRENT Act. I do not remember what DETERRENT stands for, but it amends Section 117 of the Higher Education Act and basically lowers the reporting threshold from $250K to $50K, or actually to zero dollars for countries of concern like China and Russia. It also creates a host of other new reporting requirements, which would go through the Department of Ed.
But to your point about the focus on private institutions and these concerns, they included a provision that would require private institutions with endowments over $60 billion to report to the Department of Ed investments or holdings that they might have in countries of concerns. Which is not something that we’ve previously seen in legislation which has been proposed around Section 117. And so I think that goes back to your point.
But if we were taking bets on the full reauthorization of the Higher Education Act, I’m with you. I don’t think that’s going to happen anytime soon. But I could see these small pieces moving, and there seems to be a lot more support for moving these standalone bills.
But Jon, we haven’t talked about another big thing that happened this year, which you may have forgotten. It’s actually the end of the COVID emergency.
Jon Fansmith: That’s true. What was it, March?
Sarah Spreitzer: And you may have forgotten about that since most of your staff is out with COVID right now, that it’s actually the end of the emergency, but we did see the end of the COVID emergency. And we kind of live in this new world now where we’re out of the pandemic, but what did we learn and what are we going to keep there?
Jon Fansmith: That’s another one, really, where I think we’re still learning the lessons. I think there’s a couple things that stand out, obviously. The mental health crisis on campuses-
Sarah Spreitzer: Yes.
Jon Fansmith: And the need for greater resources, more support for institutions in that area. I’ve said this a million times, but it’s true. The concern for the mental health of students and also of staff was presidential concerns basically one and two before the pandemic. Once we got into the pandemic, once classes had resumed, either online or then in person, it rapidly shot to the top, and nothing else was close.
I think campuses have seen the incredible challenges, many of which were exacerbated by the pandemic, and the limitations they have on connecting with people. And we’re still figuring out ways to do that and to do that better.
And, in fact, some of the ways that were really helpful during the pandemic, some waivers around rules around telehealth services and other things that we had as a result of the pandemic that were really helpful with the end of the pandemic went away. And there were waivers on the mental health side. There were waivers around how do we handle issues with students’ financial aid that may be a problem. All of these things that greater flexibility provided and I think was very successful. Not just in terms of dealing with the pandemic, but these other areas that are still meaningful coming out of the pandemic. It’s a good lesson to learn, and I think there’s some efforts underway, we’re certainly working on some, to get some of those flexibilities restored, to say, “Look, we have a test case of how well this actually works.”
And we’ll see. Online education is clearly, it was for a lot of institutions, a rapid transition into going wholly online. And a lot of lessons were learned, good and bad. We keep hearing from institutions about the challenges they face and where the challenges continue to be. But certainly every institution at this point has a level of comfort and familiarity with online education that they did not have, most likely, in 2019.
The final thing I think, and, again, still figuring it out, is enrollment. We saw huge declines in enrollment, especially at community colleges, during the pandemic. Coming out of the pandemic, we started to see, first with graduate education and graduate enrollment and then at the undergraduate level, enrollments coming back.
Sarah, I’m going to turn to you in a second, because international enrollment I think is pretty interesting in this area too. But did what we see during the pandemic, would that have staying power? In some cases, doesn’t seem to be. Community college enrollments are going back up. In other cases, you look at things like, particularly underrepresented student populations, that we’ve worked so hard to expand access over the decades. A lot of those populations really stopped reenrolling or enrolling during the pandemic, and we haven’t seen quite the recoveries there that we’d like to see.
So overall, enrollment seems to be reflecting what you want to see coming out of the pandemic, but within that broader picture, I think there’s a few things that are really interesting. And, Sarah, international enrollment, I know you follow that closely. That’s maybe the most-
Sarah Spreitzer: Yeah. And I would probably put for our final issue, just international overall, and also including partnerships with other countries. But we have seen international enrollment really rebound post-COVID. We’re back to over a million international students that we are welcoming at our US institutions of higher education.
We recently weighed in with the US Department of State regarding flexibility for some of our student applicants for student visas regarding in-person interviews. The State Department had issued some waivers around that requirement that really allowed them to help speed up the visa processing, because there were a lot of people waiting for visas once they started granting visas post-COVID. And so we’re hoping that the State Department will continue those flexibilities.
But the other shift that we saw in our international students is our biggest sender continues to be China. However, the biggest growth that we saw was students coming from India, especially in the area of graduate studies. And so that’s been a huge area of growth, as well as some African countries, like Nigeria. I don’t think that they will ever reach the amount of students that are coming from China to study at our institutions, but we did see a lot of growth in those areas.
And I touched on this in talking about the DETERRENT Act. I think that Congress and policymakers in a bipartisan way are going to continue to look closely at our partnerships with foreign countries, especially where the geopolitical relationships are changing, like China and Russia and, what we’ve been hearing more recently, countries in the Middle East that may be supportive of Hamas. I think that there will be a lot more continuing calls for transparency and reporting on those topics.
But Jon, I see that we’re almost up on time. And I think we have time for one question after our top list of issues. But there was one that was great, and it was, is there a particular policy from 2023 that will follow us into the new year that we should continue to watch closely? And so I would guess, what’s your top issue that you think’s going to transition into 2024?
Jon Fansmith: The one that is most striking to me, and it’s maybe a bit of a copout answer, but is this increasing politicization and hostility towards higher education institutions. I’m not dismissing the impact of the state level. In many ways, the impact at the state level is far more pronounced for institutions, but we have been seeing it there for a while. In some ways, it wasn’t a surprise. I think the scale and the intensity and the consistency of efforts in those areas are surprising and obviously very concerning.
But this jump to the federal level and the fact that it’s now beginning to permeate in lots of different ways. Language in appropriations bills that limits funding to certain types of institutions or institutions doing certain things. The short-term Pell offset that we talked about. Calls from the tax committees about should we reexamine the tax-exempt status of institutions. It’s not just one policy.
It’s in some ways that there’s a greater sense that higher ed is vulnerable, and going after higher ed can have political benefits. And so given that, given the electoral cycle we’re entering into, the intensity of it, the importance of it, I don’t see that slowing down. I think it’s going to ramp up significantly through 2024. But what about you, Sarah?
Sarah Spreitzer: Well, I was just going to piggyback on your response and say I agree with you. But I think, obviously, because it’s my issue area, I just think that there’s going to be a lot more focus on foreign funding to our institutions, especially in the leadup to the next elections. But I was going to say, I’m happy to have this higher education community as we face a very tough year in 2024, and I’m glad that we’re going to continue to have these policy pop-ups to keep everybody informed about everything that’s going to be going on during a very busy year, I think, next year.
Jon Fansmith: Yeah, I think that’s really well said. And it’s nice to end on a happy note, given the rundown was not maybe the most positive. It’s a little bit harder to find the bright lights right now, but I want to echo what Sarah said. Probably the most rewarding and satisfying and optimistic thing about the higher ed policy space right now is the group of people working in it who care about this, who are amazing colleagues. And as we head to the end of this year, I know that I am certainly very thankful for that as well.
So thank you all so much for attending. We’ve had a great year with you, and looking forward to picking up again in January and having another great session. Thanks all for attending.
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Jon Fansmith: Welcome everyone to the December episode of dotEDU Live. I am joined today by my regular co-host, my colleague Sarah Spreitzer. Sarah, how are you?
Sarah Spreitzer: Great. But you didn’t introduce yourself.
Jon Fansmith: I didn’t introduce myself?
Sarah Spreitzer: You going to say who you are?
Jon Fansmith: I can. My name is Jon Fansmith,
[Sarah laughs]
Jon Fansmith: And I am ACE’s senior vice president for Government Relations and National Engagement. And thank you for the reminder, Sarah.
Sarah Spreitzer: Sure, sure.
Jon Fansmith: In case people are unfamiliar with me. If you’re unfamiliar with the two of us, I’m not sure why you might be joining us, but we’re happy to have you-
Sarah Spreitzer: They might be first-time listeners, you never know.
Jon Fansmith: First-time listeners. I love that.
Sarah Spreitzer: First-time participants. Yeah.
Jon Fansmith: Well welcome, whether it’s your first time or you’ve been watching us for all of our 101 episodes between this and the podcast. A lot of time. So what’s going on, Sarah?
Sarah Spreitzer: Getting ready for the holidays. I’m ready to leave town with Congress. I was watching a hearing today [Sarah laughs], and it’s clear Congress is ready to get out of town. They, like the rest of us, I think are counting down the time to the holidays.
Jon Fansmith: The irony of course being that Congress is mostly the reason I think we’re all desperate to get out of town too.
Sarah Spreitzer: Yes.
Jon Fansmith: So we share that impulse. But Sarah, we have something of a tradition here that is the December episode. We always do a rundown of the year in the past. I think we’re calling it the top policy issues of 2023, but we’ve done other things before. What happened, the year in review, things like that. So we want to do that again. That seems to be really popular. We hear a lot of nice comments about that from viewers and people who have been watching us. So we’ve got a lot on the plate when we sat down and talked about what to go over from 2023. It has not been a boring year.
Sarah Spreitzer: No, no, definitely not. And I hadn’t realized this was a tradition. I was going to ask you if this was in keeping with Festivus, if this is our annual airing of grievances. [Jon and Sarah laugh] Or if it is the top policy issues.
Jon Fansmith: I was going to say, to be fair, most of our episodes involve some airing of grievance.
[Sarah laughs]
Sarah Spreitzer: That’s true.
Jon Fansmith: Either personal or policy related. So I don’t know that that’s a huge difference, but at least we’re going to be going through the whole thing now.
Sarah Spreitzer: Yeah, which is great, ‘cause we get to look back at this amazing 2023, which I actually was referring to as 2024, so obviously, I’ve been paying a lot of attention this year. And I think one of the first things we talked about, Jon, when we sat down to make the list was chaos in Congress as the number one thing, which I find interesting because I think we throw that word around a lot, “chaos,” right?
Jon Fansmith: Yeah.
Sarah Spreitzer: But this year was definitely one for the history books. So what would you put under that umbrella of chaos in Congress?
Jon Fansmith: I mean, you could really put everything under that umbrella, because this dysfunction, it leaves a stamp on everything else Congress is trying to do.
And I did think it was interesting, so it was announced last week that both Kevin McCarthy and Patrick McHenry would not be returning to the Congress next term. They’re stepping down after this year. And if you think about the fact that not just did we have for the first time ever Congress kicking out the speaker of the House, you add to that that the pro tem speaker of the House, Patrick McHenry, and the former speaker both will not be returning. I mean, it’s kind of a little snapshot of things you don’t generally see.
This has been a very unusual, chaotic year, and I think the thing that really carries over from our policy perspective is that it’s not just that there’s chaos, right? There’s always been partisan fighting, there’s always been some dysfunction. Congress has been less and less effective at moving legislation over the last few congresses.
But the bigger thing I think is this idea that when you look at where the dysfunction’s coming from, it’s not divided government, Republicans versus Democrats. There’s always some of that, right? It’s not Congress versus the administration. There’s some of that. It’s within the parties themselves, particularly within the House Republican caucus, but across the range, certainly in the Senate you see this too where it’s less important your party affiliation, and more important which part of the caucus you belong to.
And a lot of the most bitter fights we’ve seen this year are not Republicans versus Democrats. It’s been Republicans in the Freedom Caucus or on the far right of that caucus with the more moderate members who might’ve won election in Biden districts and trying to fight over where they want to position for policy with members of their own party.
And that’s where we got the speakers election and Kevin McCarthy being booted from the job, this kind of thing, this factionalism, you have these tight margins. The leadership can’t afford to ignore any vote. It just creates a whole lot more chaos in the system, less predictability, less authority for leadership to move things, harder to predict what they’re going to do and what they’re going to work on. Because a lot of the issues just roll up to the leadership level. They move very quickly behind closed doors. You have less ability as advocates to influence things. It’s just a difficult environment. It really is.
Sarah Spreitzer: Yeah. And I think, looking back, Kevin McCarthy started the year with a very historic vote for speaker. It took 19 times for-
Jon Fansmith: 16, I think.
Sarah Spreitzer: Okay.
Jon Fansmith: 15 or 16.
Sarah Spreitzer: It was more votes-
Jon Fansmith: Most in 100 years.
Sarah Spreitzer: In 100 years that he had to get. It was a very hard-fought speakership, one in which, I don’t know if you remember this, but he had to cut a lot of deals. So one of the things we watched closely at the beginning of the year was who was going to be chairing different committees because there were committee chairs that were picked based on politics and promises made based on their vote for speaker.
And of course then that led to the debt limit discussion in the summer. Which obviously has a huge impact on higher education, because then you’re talking about government funding for everything from student aid to our research funding. And I think we then saw that in the appropriations bills, those deep, deep cuts that I think in past years we would’ve called them very extreme parts of the party, but a very vocal part, trying to get these deep cuts in the domestic programs.
Jon Fansmith: And I think funding’s the perfect place to look at this too, because it was funding that actually led to the motion to vacate the chair that was brought against Kevin McCarthy. It was a disagreement over not just his agreeing to what many conservatives felt were too high funding levels, but then actually the real trigger was pushing through a continuing resolution to extend government funding at that level to buy more time to do a final deal. And that’s what did him in.
And you see these things, a deal that Republicans in the House were central to negotiating around the debt ceiling increase, a month later, because a large section of the caucus felt very strongly about lowering funding levels, essentially, they walked away from that agreement, drafted bills at a lower level. Funding is a really great context to put all of this intraparty warfare that we’ve seen into understanding it within that context.
So it’s been an interesting year. And we’re looking at next year, we’re talking about this year in review, but we now have for the first time ever a CR that sets two different dates for different agencies for their funding to run out. One of those is January 19th, not that far away, since there hasn’t been any progress really on overall appropriations or talking about funding levels.
But two deadlines is another level of complexity. Not clear that there’s a lot of experience about how you’re going to prioritize that, how you usually... I mean, the advantage of an omnibus is you bundle everything together and it’s hard to get no votes in opposition because somebody cares about something, and they’re splitting it up this way. In many ways, it’s going to make it even harder for leadership to muster people to vote because, again, you’re splitting out distinct pieces that they can find opposition for. It really is a bad situation, especially around funding, and it’s going and carrying into the next year.
Sarah Spreitzer: Yeah. And for our priorities, I think that leads us to our second issue that we put on our list, Jon, was hostility towards higher education. I think the cuts that we saw, the zeroing out of Federal Work-Study, of SEOG and other things, usually you can count on somebody to speak up for higher education. We still have champions in Congress, I don’t want to say that we don’t, but I think that this year was also very much marked with hostility towards our institutions, hostility towards higher education, not just coming from one party.
Jon Fansmith: Yeah. I mean, this is one we could unpack across multiple episodes, right? This sense of hostility towards higher education institutions. It’s been particularly pronounced at the back end of this year. It’s certainly top of mind I think for a lot of people right now. But it didn’t start in 2023.
We certainly saw at the state level legislation introduced again and again and again, some of which was enacted, that would seek to upend how tenure is handled on campuses, or how institutions are governed, particularly in the area of diversity, equity, and inclusion efforts on campuses. How those are staffed, how those are funded.
What was surprising in some ways was we are somewhat familiar with this at the state level, these things not to quite the same degree as we’ve seen over the last few years, but that has been there in the past. The migration of those kinds of approaches to the federal level is, I think, relatively new.
We didn’t really use to see these kinds of strikingly partisan positioning on different sides of the issue at the federal level as much in the education committees. They tended to be much more bipartisan. Historically, higher ed policy has always been pretty bipartisan. And this schism between the two parties on higher education is pretty telling.
And it’s worth noting it’s not that one side is supportive and the other side is critical. Both sides are critical; they’re just critical about different things. They both see different problems. In many ways, some of the problems we’re having is that there is consensus of... And I think we’ll talk about a little bit, but especially with elite institutions, there’s criticism on both sides for different things, but criticism of those institutions on both sides.
So when you see something like... And we’ll talk about the offset and the short-term Pell program, we’ll come back to this, but that offset is targeted at a handful of 40 or 50 institutions that are subject to the endowment tax. You get these kind of policy options where the dissatisfaction on both sides allows them to focus in on and use, frankly, in this case, a pretty punitive measure for a handful of institutions that they’re currently upset with. It’s not great policymaking. It’s terrible policymaking. But given this broader concern about institutions, it’s somewhat inevitable.
And I think, again, the biggest thing recently has been around campuses’ handling of antisemitism. And we saw the hearing last week. I think everybody watching this has probably at least seen clips from that hearing. As we know, the president of Penn resigned over the weekend, in large part due to fallout from that hearing.
But that’s not it. Right? As striking as that hearing was, regardless of your perspectives on the testimony that was offered, and I’m sure there’s a range of opinions there, but it’s only the first part of this. Congress is very clearly dissatisfied with what they’ve seen from institutions. The Ed and Workforce Committee is opening formal investigations, not just into MIT, Penn, and Harvard, but they’ve announced it’ll be into lots of other institutions as well. They’re going to subpoena documents. They’re being very aggressive about that. And in some ways, say, “Well, they had the hearing, they’re doing this. They’re continuing that positioning.” That very overtly critical positioning of higher education institutions.
But keep in mind, the Office of Civil Rights at the Department of Education has also opened, I believe, at this point seven investigations into higher ed institutions and one, I believe, into a high school. We expect to see more investigations announced by OCR. This is not a partisan issue. The Biden administration wants to be seen as being aggressive in this context. And again, it comes back to institutions squarely in the focus, institutions being targeted from both sides.
Sarah Spreitzer: Yeah. And I don’t see this going away in 2024. I mean, the very serious issue of antisemitism may change, but I think this criticism or close examination of higher education in the United States is just going to continue, especially in the lead up to the presidential election. We’ve already seen the candidates start staking out positions on higher education and how they would fix it, and I think that it’s just going to continue into 2024.
Jon Fansmith: Yeah, I think you’re exactly right. When you look at some of these things, there are clearly aspects of this that are driven by policy concerns, right? Congress has a responsibility to oversee what’s happening, especially given the amount of federal support to higher education institutions.
That said, there’s a really big political motive here too, and that’s one of the reasons we’ve seen a growing partisan split. There’s a lot of data about this, that Democrats tend to represent districts overwhelmingly that have higher levels of educational attainment. Republicans, the reverse is true. There is some splitting among the parties as identification with a party by education level. So you see this kind of growing views of higher education that are very different that are politically driven. You’re responding to what your constituents want, given the public response.
And I’d say it’s not just the handling of antisemitic expression, or actions, or threats, or acts of violence on a campus. We’ve been talking about this when it came to loan forgiveness. There are things that are very high-profile for the public that are beyond what we think of the policy world. The broader public cares about these things. And it allows politicians, both sides of the aisle, to frame their views in a way of something they know their constituents now care about.
Like why does college cost what it costs? Is it affordable? Should we be forgiving debt? Are campuses truly places of free expression or do they only allow free expression for one side of the issue? It’s a really rich area if what you’re trying to do is motivate your voters and define where you stand on something because it’s something voters are paying attention to through the media in other ways. It sets it up for them to do that. So of course, absolutely. Big election coming up, politicians are going to seize on that.
Sarah Spreitzer: Well, and you touched on Public Service Loan Forgiveness and loan forgiveness. But I think the third thing we wanted to touch on really in the world of Washington, DC, and higher education was the Supreme Court decisions that we had this year, which, obviously, a huge impact on our institutions.
Jon Fansmith: And it’s in part because of that failure of Congress, right? A very active Congress that was doing consistent oversight of the executive branch, was pushing back, was passing legislation, making it clear what their priorities were. If Congress were doing those things, we wouldn’t, I think, see quite as much activity and quite as much impactful activity from the Supreme Court.
Some of this, there are obviously varying different views about how far the court has become politicized. There’s a clear, heavy conservative majority on the court, which may make some of these things inevitable, even without whatever Congress was doing. But really what we’ve seen, and we’ve seen it over numerous presidential administrations, is Congress’s inability to do oversight to limit the executive has allowed the executive to expand and expand and expand.
And this Supreme Court is incredibly suspicious of executive authority. They have already had one ruling—I’m not going to go too much into legal stuff—but they’ve already passed one ruling called West Virginia v. EPA that created something called the major questions precedent, essentially saying statute alone isn’t necessarily the authority for agencies to regulate at a very large level. They have to be much more thoughtful about what was Congress’s intent.
There’s a precedent in law, the Chevron case, goes back to a case in 1984 that essentially says where it’s not clear what Congress wants agencies to do, you give deference to the agency’s interpretation. It gives the authority to the agencies. This West Virginia v. EPA decision, first decision by this court that really cut that down, limited it. They’ll be hearing another case in the fall session. It’s called Loper Bright Enterprises v. Raimondo. It will take another crack at Chevron and essentially even further narrow the discretion of executive agencies. I’m sure at this point people are wondering, “Why is he talking about this?”
Sarah Spreitzer: [Sarah chuckles] Yeah.
Jon Fansmith: I mean, Sarah, you look like you’re wondering why-
Sarah Spreitzer: Yes. Tell us, why are you talking about this, Jon?
Jon Fansmith: Well, right. And I think the reason why we’re talking about this is it’s not environmental regulations. It’s not fishing, which is what Loper Bright Enterprises is ostensibly about. It’s really about what can executive agencies do, and how much authority do they have, and restricting that, narrowing that, saying, “Only if Congress has specifically said you can do this, can you do this.”
If you think about what the Biden administration has done in higher ed over the last two years, you look at things like gainful employment, financial value transparency, the Title IX regs that they’ve announced will be coming in March. These are enormously impactful regulations. The statute’s not necessarily clear that they have the authority. Gainful employment’s a perfect example. There’s very little legislative text, statutory text around gainful employment, but it’s become a pretty expansive set of regulations that applies to now every program in higher education, at least the reporting parts and the data parts.
So if you have a Supreme Court now saying you don’t really have the authority to do that, expect to start seeing not just the lawsuits we tend to see around regulations, but ones that will move successfully through the courts limiting and limiting and limiting agencies’ roles to impose these things. We are a heavily regulated industry. That kind of a fundamental shift in how regulations are handled and the authority of the agencies has the possibility to really upend how we operate and what the federal relationship to campuses is.
Sarah Spreitzer: Well, that seems to be a 2024 issue
[Jon laughs]
Sarah Spreitzer: That we can worry about in January. I thought when we touched on the courts, you were going to say something about the Harvard UNC decision on race-conscious admissions, which happened this year. That’s a huge thing and one of those things that I’m already like, “Was that last year or was it this year?” But obviously that had a huge impact on our institutions.
Jon Fansmith: And one impact that I think we’re still working through. When you talk about some of the issues around the handling of speech on campus, in some ways kind of a similar thing. There’s not really a clear playbook here.
The Supreme Court ruling is relatively definitive in terms of admissions. But now, we’re seeing in the courts numerous other challenges seeking to say, well, either that is narrowly tailored to admissions. Can you consider race as part of a holistic admissions process or is it more expansive? When you have student groups, can they exclude students based on race? Can you have scholarship programs that exist for students in which race is a consideration for the award of those scholarships? There are numerous lawsuits headed to the courts now, and certainly given this court, in these areas, I don’t think we’re hopeful that they will be looking to expand our authority in these areas. They’re very much interested in narrowing it.
So we’ve got that. We’ve got loan forgiveness, which is another great example of this court’s suspicious of executive authority, saying it’s overreach by the administration. Again and again and again, the court is essentially coming in and checking the administration with big impacts for public policy, and how-
Sarah Spreitzer: Yeah. And I think loan forgiveness, what we saw was we came out of COVID, the Biden administration proposed this broad forgiveness of student loans. And I think that one of the things that there’s a lot of bipartisan agreement on, whether or not they agree on loan forgiveness, is college cost and accountability.
And that was the next issue that we put down on our top policy issues was these accountability calls, which I think are coming from a very bipartisan place, but we’ve seen a lot of regulations this year from the Department of Education. They’ve done a very, I think, aggressive negotiated rulemaking process. They’ve been doing a lot of negotiated rulemaking. It seems like they finish one and then they start a new one. And that’s going to go into 2024 on a lot of these issues.
Jon Fansmith: Yeah. And a couple of their very big packages are finalized, right? When we’re talking about accountability, the gainful employment, financial value, transparency regs, those were finalized. They’re going into effect. Institutions will be under obligations to report data starting next year.
There’s some other things that are hanging out there that are big. Title IX, again, was supposed to be released in October. They’re saying it’ll be released in March, I think. Here in Washington, there’s a lot of expectation that that March deadline’s a pretty soft deadline, that that may fall back again.
But you add to it the numerous rounds of negotiated rulemaking they’ve already done. Another session with five issues, starting in January. It’s nonstop. There is regulation after regulation after regulation being pushed through this administration.
In part because Congress isn’t acting, in part because where we started, this administration sees very clear problems, particularly around what students are borrowing and what they can afford to repay. And they want to put in rubrics, regulations around programs specifically, moreso programs and institutions that may limit the availability of those programs to access Title IV aid. If they think that there are bad financial returns for students, they want to be able to hold those programs accountable and cut off aid to them.
I think we have many concerns about approaches like that, that certainly they’re high risk. They’re not necessarily as well targeted to where the problems are. But this is a clear point of emphasis for the administration.
We’re going to talk, I know in just a second about short-term Pell. But the short-term Pell bill is a pretty good reflection of that from the congressional side, right? They put in numerous provisions around what a program would need to do to qualify to be eligible for the aid, in part because they want these accountability metrics. And there’s a growing sense of putting it in upfront in some ways, getting limitations on participation as the key for holding institutions accountable.
Sarah Spreitzer: So Jon, before we move off of accountability, we did have one question about the GE, the gainful employment regulations, which you said were finalized. Do you see those being stopped by the courts, or do you think they’ll be implemented next year?
Jon Fansmith: I think everyone assumes there will be litigation, that someone will sue to block those, will seek an injunction against the implementation of those rules. How successful will they be? I think that’s a harder question to answer. They went through a formal rulemaking process. They observed the GEPA provisions. They did it in the right way.
Now you get into this question, which has been there with gainful employment for the last 13 years, since the Obama administration began their attempts to regulate in this area, that does the statute really lay out this authority? Like I said, there’s very little in HEA about gainful employment programs, defining them, what the secretary’s responsibility is to oversee them. That certainly would make them susceptible to a legal challenge. They’ll face one. What the outcome will be I think is harder to see, but there will probably be some pretty good cases about the impact on institutions coming from it, based on the department’s own data showing the number of programs of different institutional types would need to close under the new regulations. There’s certainly harm out there as a result of this. Just whether the legal arguments hold up I think will be interesting to see.
Sarah Spreitzer: Yet another thing to look forward to in 2024. But the next issue that we put down, and we often laugh about this, is reauthorization of the Higher Education Act. We’ve said before many of us will have retired and be gone by the next time Congress gets around to reauthorization of the Higher Education Act. But this year, we did see pieces get introduced in a bipartisan way. And I know you really want to talk about the short-term Pell bill that’s being marked up actually today by the Committee on Education and the Workforce and is bipartisan. So I guess first, what do you think for 2024? Will we actually see a full reauthorization?
Jon Fansmith: Yeah, so I mean it’s the same answers as always, right? I feel bad about that.
Sarah Spreitzer: Let’s make bets, and then we’ll come back and we can listen to this at the end of 2024.
Jon Fansmith: Sure. So I will say what I’ve been saying for a long time. HEA as a whole is just such a big, complicated, expensive, if you’re changing the loan programs and things like that, beast that in some ways it becomes really hard for either party to produce a bill that will receive bipartisan support but that also addresses their priorities. There’s so much to deal with there.
Which I think is why you’ve seen, Chairwoman Virginia Foxx of the Education and the Workforce Committee, made it pretty clear in a press conference after they rolled out one piece of legislation on it this year, they’re going to do these standalone bills. That will be their approach to reauthorizing HEA. They can’t do everything. They won’t do everything, but they’re going to introduce in discrete areas where they think they can make changes, and where so far at least they’ve been able to find bipartisan compromise.
Certainly, if you are looking to amend HEA, it is probably the most realistic way to do it because you won’t be able to navigate a giant bill, most likely, but you can start navigating a bunch of individual bills. And credit to the chairwoman and the ranking member on that committee. They’ve come together on short-term Pell. They’ve come together on the Workforce Investment Opportunity Act, which is also being marked up today. They are finding areas to agree and draft legislation, put that together.
Do we always love what’s in there? Well, no. But in some ways, it’s nice to see Congress acting and taking on the responsibility of working collaboratively to produce legislation. We haven’t seen a lot of it recently.
Sarah Spreitzer: Yeah. I know that you and our colleague Emmanual and others have been very busy regarding this short-term Pell bill. So do you want to give us a short kind of what’s in it and what our positioning is on it?
Jon Fansmith: Yeah, and I think most people are generally familiar with short-term Pell. This is the idea that there are a whole range of programs that campuses offer that generally don’t lead to a degree, particularly around certificates. And these courses, programs are of relatively short length, about between 150 and 600 hours, between, I believe, about eight and 15 weeks in length. I think that’s what the parameters the bill lays out.
Before those programs were not, because they don’t lead to degree, eligible, students attending them couldn’t get a Pell Grant. But we know that a lot of these programs are very skill-specific. They’re very focused on career needs. And so there’s a lot of unmet need within the federal aid system for students who want to do something short of a degree but need some postsecondary education, the ability to afford that.
And so at ACE, I know a number of other organizations, we are very supportive of the short-term Pell concept. This bill, we have always said we like the idea. We are concerned about appropriate safeguards being in place, in part because we have seen in the past that when you expand financial aid eligibility, you tend to get some bad actors enter the system, right? There have been peaks and valleys of fraud and abuse with financial aid, that tend to correspond with whenever the system is widened. So with appropriate safeguards, I think it’s the right thing to do. That’s been our position.
This bill has pretty strong safeguards. You need approval of the program by the local workforce board. There’s pretty stringent requirements on accreditors to certify the institutions are doing things around the program around disclosure of information, providing information to their students. And then beyond that, the Department of Education has a number of specific metrics tests. Are you earning enough out of the program after you’ve left the program? Are you employed? 70% employment rates after your leave of the program. Are you earning more than a high school graduate, essentially an earnings premium? Those are all relatively reasonable metrics. They’re frankly much more stringent metrics than apply to most other degree-granting programs under federal law. So it is a pretty rigorous regime.
Things we would change about it; we’ve been talking with staff about some of the concerns we have around the policy of the bill. But the biggest concern we have right now with the bill that’s being marked up today isn’t really about the policy around short-term Pell, and there’s disagreements within the community. People feel differently about that. But everyone agrees that what they’re doing on the offset is incredibly problematic.
And for those who don’t know, an offset is essentially finding money from somewhere else to pay for what you’re doing. They’re required to do it under House rules. They have to find money from somewhere to pay for the cost that a lot more students will now be getting Pell Grants. The way they did it in this bill was to say that any school subject to the endowment tax, the endowment excise tax, it’s about 50 to 60 institutions, I think is the most recent estimate from our friends at NACUBO-
Sarah Spreitzer: And that’s private, right? Private institutions-
Jon Fansmith: They are only private institutions currently, yes. That they will no longer be able to participate in the Stafford federal loan programs or the Graduate PLUS loan programs, and can only participate in Parent PLUS loans if the parents are parents of a student who is not a Pell recipient. So the parents of Pell recipients can’t borrow through a Parent PLUS loan.
It’s essentially kicking those handful of institutions out of the financial aid programs, the lending programs, as a way of paying for this other expansion of eligibility. Again, there can be differing opinions about the policy, but what’s abundantly clear is this is targeting a group of institutions that right now are facing a lot of political headwinds. It is also doing it in a way that’s unprecedented for federal financial aid. We have never before had Congress pick and choose groupings of institutions and say, “Well, these institutions are more worthy of an expanded financial aid portfolio, and these other ones are less worthy of that.”
It’s a dangerous precedent to set because we do not want Congress picking the winners and losers. Part of the appeal of the current system is an individual’s needs are determined based on their circumstances, and they take their aid to different institutions. That choice is a hallmark of our system. If you start limiting what institutions are qualified for, that element of choice starts dropping. It also makes it frankly harder for students to figure out what their options are. It’s very bad policy, and we are hopeful that the committee will find another way to pay for this bill that doesn’t cause the harm that their current offset does.
But it hits those two things, right? Criticism of elite institutions and the growing hostility towards higher ed, making higher ed institutions pay for an expansion of benefits out of funds to other institutions.
Sarah Spreitzer: Yeah, and I-
Jon Fansmith: Sarah, you are... Yeah, go ahead.
Sarah Spreitzer: Yeah, I was just going to say on the short-term Pell, I know that we’ve pushed out talking points. We recently did a letter outlining our concerns, and perhaps our producers can share that in the show notes or in the chat with the audience. Just wanted to add that.
I think you were going to turn to my part of the Higher Education Act, Jon. The most important part.
[Jon laughs]
Sarah Spreitzer: Obviously, Section 117, foreign gift reporting. And that’s been a piece of the Higher Education Act that there’s been a lot of bipartisan support for doing something around that, especially because there continues to be bipartisan concerns about certain countries, such as China and Russia, especially around the areas of foreign malign influence and research security.
And so we recently saw the House pass the DETERRENT Act. I do not remember what DETERRENT stands for, but it amends Section 117 of the Higher Education Act and basically lowers the reporting threshold from $250K to $50K, or actually to zero dollars for countries of concern like China and Russia. It also creates a host of other new reporting requirements, which would go through the Department of Ed.
But to your point about the focus on private institutions and these concerns, they included a provision that would require private institutions with endowments over $60 billion to report to the Department of Ed investments or holdings that they might have in countries of concerns. Which is not something that we’ve previously seen in legislation which has been proposed around Section 117. And so I think that goes back to your point.
But if we were taking bets on the full reauthorization of the Higher Education Act, I’m with you. I don’t think that’s going to happen anytime soon. But I could see these small pieces moving, and there seems to be a lot more support for moving these standalone bills.
But Jon, we haven’t talked about another big thing that happened this year, which you may have forgotten. It’s actually the end of the COVID emergency.
Jon Fansmith: That’s true. What was it, March?
Sarah Spreitzer: And you may have forgotten about that since most of your staff is out with COVID right now, that it’s actually the end of the emergency, but we did see the end of the COVID emergency. And we kind of live in this new world now where we’re out of the pandemic, but what did we learn and what are we going to keep there?
Jon Fansmith: That’s another one, really, where I think we’re still learning the lessons. I think there’s a couple things that stand out, obviously. The mental health crisis on campuses-
Sarah Spreitzer: Yes.
Jon Fansmith: And the need for greater resources, more support for institutions in that area. I’ve said this a million times, but it’s true. The concern for the mental health of students and also of staff was presidential concerns basically one and two before the pandemic. Once we got into the pandemic, once classes had resumed, either online or then in person, it rapidly shot to the top, and nothing else was close.
I think campuses have seen the incredible challenges, many of which were exacerbated by the pandemic, and the limitations they have on connecting with people. And we’re still figuring out ways to do that and to do that better.
And, in fact, some of the ways that were really helpful during the pandemic, some waivers around rules around telehealth services and other things that we had as a result of the pandemic that were really helpful with the end of the pandemic went away. And there were waivers on the mental health side. There were waivers around how do we handle issues with students’ financial aid that may be a problem. All of these things that greater flexibility provided and I think was very successful. Not just in terms of dealing with the pandemic, but these other areas that are still meaningful coming out of the pandemic. It’s a good lesson to learn, and I think there’s some efforts underway, we’re certainly working on some, to get some of those flexibilities restored, to say, “Look, we have a test case of how well this actually works.”
And we’ll see. Online education is clearly, it was for a lot of institutions, a rapid transition into going wholly online. And a lot of lessons were learned, good and bad. We keep hearing from institutions about the challenges they face and where the challenges continue to be. But certainly every institution at this point has a level of comfort and familiarity with online education that they did not have, most likely, in 2019.
The final thing I think, and, again, still figuring it out, is enrollment. We saw huge declines in enrollment, especially at community colleges, during the pandemic. Coming out of the pandemic, we started to see, first with graduate education and graduate enrollment and then at the undergraduate level, enrollments coming back.
Sarah, I’m going to turn to you in a second, because international enrollment I think is pretty interesting in this area too. But did what we see during the pandemic, would that have staying power? In some cases, doesn’t seem to be. Community college enrollments are going back up. In other cases, you look at things like, particularly underrepresented student populations, that we’ve worked so hard to expand access over the decades. A lot of those populations really stopped reenrolling or enrolling during the pandemic, and we haven’t seen quite the recoveries there that we’d like to see.
So overall, enrollment seems to be reflecting what you want to see coming out of the pandemic, but within that broader picture, I think there’s a few things that are really interesting. And, Sarah, international enrollment, I know you follow that closely. That’s maybe the most-
Sarah Spreitzer: Yeah. And I would probably put for our final issue, just international overall, and also including partnerships with other countries. But we have seen international enrollment really rebound post-COVID. We’re back to over a million international students that we are welcoming at our US institutions of higher education.
We recently weighed in with the US Department of State regarding flexibility for some of our student applicants for student visas regarding in-person interviews. The State Department had issued some waivers around that requirement that really allowed them to help speed up the visa processing, because there were a lot of people waiting for visas once they started granting visas post-COVID. And so we’re hoping that the State Department will continue those flexibilities.
But the other shift that we saw in our international students is our biggest sender continues to be China. However, the biggest growth that we saw was students coming from India, especially in the area of graduate studies. And so that’s been a huge area of growth, as well as some African countries, like Nigeria. I don’t think that they will ever reach the amount of students that are coming from China to study at our institutions, but we did see a lot of growth in those areas.
And I touched on this in talking about the DETERRENT Act. I think that Congress and policymakers in a bipartisan way are going to continue to look closely at our partnerships with foreign countries, especially where the geopolitical relationships are changing, like China and Russia and, what we’ve been hearing more recently, countries in the Middle East that may be supportive of Hamas. I think that there will be a lot more continuing calls for transparency and reporting on those topics.
But Jon, I see that we’re almost up on time. And I think we have time for one question after our top list of issues. But there was one that was great, and it was, is there a particular policy from 2023 that will follow us into the new year that we should continue to watch closely? And so I would guess, what’s your top issue that you think’s going to transition into 2024?
Jon Fansmith: The one that is most striking to me, and it’s maybe a bit of a copout answer, but is this increasing politicization and hostility towards higher education institutions. I’m not dismissing the impact of the state level. In many ways, the impact at the state level is far more pronounced for institutions, but we have been seeing it there for a while. In some ways, it wasn’t a surprise. I think the scale and the intensity and the consistency of efforts in those areas are surprising and obviously very concerning.
But this jump to the federal level and the fact that it’s now beginning to permeate in lots of different ways. Language in appropriations bills that limits funding to certain types of institutions or institutions doing certain things. The short-term Pell offset that we talked about. Calls from the tax committees about should we reexamine the tax-exempt status of institutions. It’s not just one policy.
It’s in some ways that there’s a greater sense that higher ed is vulnerable, and going after higher ed can have political benefits. And so given that, given the electoral cycle we’re entering into, the intensity of it, the importance of it, I don’t see that slowing down. I think it’s going to ramp up significantly through 2024. But what about you, Sarah?
Sarah Spreitzer: Well, I was just going to piggyback on your response and say I agree with you. But I think, obviously, because it’s my issue area, I just think that there’s going to be a lot more focus on foreign funding to our institutions, especially in the leadup to the next elections. But I was going to say, I’m happy to have this higher education community as we face a very tough year in 2024, and I’m glad that we’re going to continue to have these policy pop-ups to keep everybody informed about everything that’s going to be going on during a very busy year, I think, next year.
Jon Fansmith: Yeah, I think that’s really well said. And it’s nice to end on a happy note, given the rundown was not maybe the most positive. It’s a little bit harder to find the bright lights right now, but I want to echo what Sarah said. Probably the most rewarding and satisfying and optimistic thing about the higher ed policy space right now is the group of people working in it who care about this, who are amazing colleagues. And as we head to the end of this year, I know that I am certainly very thankful for that as well.
So thank you all so much for attending. We’ve had a great year with you, and looking forward to picking up again in January and having another great session. Thanks all for attending.
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Jon Fansmith: Thank you for joining us on dotEDU. If you enjoyed the show, please consider subscribing, rating, and leaving a review on your favorite podcast platform. Your feedback is important to us, and it helps other policy wonks discover our show.
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