Jon Fansmith: Hello, everyone. Welcome to the December edition of dotEDU Live. We have a lot to cover in this supersized edition of dotEDU Live. I am your host, Jon Fansmith, and to help me cover all of the many, many things we'll be doing, we've invited the whole team on today. We're bringing in the big guns. We've got not just my usual co-host, Sarah Spreitzer, but we are joined by Emmanuel Guillory, by Peter McDonough, by Steven Bloom, not listed to any particular order of importance or expertise. They're all juggernauts in their fields. And we are very lucky to have them here because there is a lot of interest in what we're going to talk about today, which is what is going on in likely the first 100 days of the new administration, and what kind of takeaways we can pull from things we've seen already, things we've saw in the campaign, and the indicators we're getting here in Washington DC.
So, before we leap into all of that, hi everybody. Thanks for joining us.
Sarah Spreitzer: Hey, Jon.
Emmanuel Guillory: Hello.
Steven Bloom: Hi, Jon, everybody else.
Jon Fansmith: And Pete's just waving. Oh, Pete.
Peter McDonough: Hello, folks.
Jon Fansmith: There is a lot to go into here. And going by the questions we already had in advance, a huge range of issues to cover. We will do our best. We only have an hour. It is probably not enough time.
But I want to start at the top right. We are looking at a new administration, a new Congress, a real turning point from where we have been the last couple of years. Before we dig into the policy specifics, let's start big picture. What are people's big picture takeaways? Sarah, I'm going to throw it to you first.
Sarah Spreitzer: Wow, I get the first word on this? What are the big takeaways? We're going to have a unified Republican government. I think folks are looking a lot, I know our team has been looking a lot, at what the Trump administration did during their first term. Steven and I have been going through the previous executive orders to see which ones may be taken off the shelf and dusted off. We're also looking at proposed rules or even finalized rules that were put in place under the first Trump administration. And then I think there's everything we don't know. So, I feel like we're in this period right now where folks are trying to prepare, really, for the unknown, but taking some lessons learned from the first Trump administration.
Jon Fansmith: Thanks, Sarah. And Steven, you just got name-checked, so we'll go to you next.
Steven Bloom: Thanks, Jon and Sarah. Yeah, to pick up on Sarah's point, certainly on the EO side, and I would say generally the issue of what we've seen in states in what has been called divisive concepts, efforts to restrict or ban DEI in states or teaching around critical race theory and what's labeled anti-woke. That, we may see come to Washington in different forms. I think that's likely. We're going to talk about an executive order related to so-called divisive concepts we think will going to be maybe a first-day reinstatement by the Trump administration. And then we're going to have a big reconciliation. We'll talk about that. That's going to be a vehicle for tax and maybe some other things that may be impactful on higher education.
Jon Fansmith: All right, we'll keep an eye out for those. Peter? What takes-
Peter McDonough: Well, I guess it wouldn't be appropriate for the lawyer to talk about anything other than the law and the courts. I'm going to identify two things to keep our eyes on as we go forward. One, last year the Supreme Court ruled in a case called Loper Enterprises versus Raimondo that the Chevron doctrine is dead. What's the Chevron doctrine? Well, back in 1984, the Supreme Court said that if the language in a federal law is ambiguous, judges need to defer to its interpretation by the executive branch by the relevant administrative agency. It was the Biden administration. It will now be the Trump administration.
Last term, Justice Roberts in a six to three opinion said, "Nope, Loper is dead." He said that the agency's interpretation will no longer get deference from the courts. It is the judiciary that is supposed to determine what Congress meant in its statutory provisions. Okay, so how do we think about that in a next administration with an executive branch that would like to do a lot of stuff without necessarily consulting Congress? It would be great if they can get Congress to come along, but they want to do stuff. Well, we are going to be in the first term post-no-Chevron-doctrine. And so we will have courts, including maybe the Supreme Court ultimately, determining whether there is the sufficient authority for an executive branch to go as far as it wishes to go.
Now, the other thing I want to mention briefly is something called nationwide injunctions. For the first 175 years or so, in federal courts it was presumed that when a judge ruled, the people that were impacted by that ruling were the parties in the case. But what started to take hold back in the '60s was an idea that a judge could issue a ruling and have it apply to folks that weren't just the parties to the case, and that it could apply to a broader group of folks, people that sit within the federal circuit, even people nationwide.
This started to creep, and then it exploded During the Trump administration. During the presidency of George W. Bush, there were 12 nationwide injunctions by my best count. During the Obama presidency, there were 19. During the Trump administration, the first Trump presidency, they approached 60. Well, what will we see this next Trump administration? It's going to impact, along with that Loper decision, actually what can be done and the intensity and the confidence in challenging what can be done in court.
Jon Fansmith: Great, Pete. Yeah, and something, especially as we start getting into the regulatory space, a very helpful background to think about.
Emmanuel, your portfolio is pretty big. Lots of things, I'm sure, for you to consider. What's top of mind right now?
Emmanuel Guillory: Thanks, Jon, for that. And hello, everyone.
So, first of all, the thing that I'd like to talk about is the fiscal challenges or just what to expect in a next Congress. So, right now, there is a law called the Fiscal Responsibility Act, and with this law, that law establishes caps of funding. The reason why I'm talking about this is because when we say top line levels of funding here within the Beltway in Washington DC, we're talking about two different pots, defense and non-defense. When we think of funding for higher education, that comes from the non-defense pot of money.
And right now, Congress has not decided on those top-line levels of, what are going to be the numbers that we can agree to for defense and non-defense? The Fiscal Responsibility Act comes in because it actually puts a cap for FY 2025 on what the defense and non-defense top-line numbers can be. And that cap is around $710 billion for non-defense. And right now, we are spending around $707 billion for non-defense. Even though there are caps, Congress can always agree to additional funding on top of those caps, so we'll have to see what happens.
This is important because this impacts funding for higher ed. Once those top-line levels are established, then we can figure out what happens with the rest. Which brings me to my next point, which is appropriations. So, we are in a continuing resolution right now, and what that means is the federal government has been funded at fiscal year 2024 levels so far within this new fiscal year of 2025, and we're being funded at the same levels until December 20 of this year. I know that nothing has been reached yet. I actually spoke with some appropriators this morning, and there has not been an agreement yet on what's going to happen after December 20, but I know that Congress is working on keeping the government funded. Likely, it will look like another continuing resolution until March, that is what we are hearing, to give the new Congress an opportunity to weigh in and to figure out the funding levels for the various programs.
Of course, within the higher education space, the student aid programs are very important and have a huge impact on students, and so we want to make sure that we're watching those and make sure that we are telling the right narrative and story of the impacts of those programs, but also making sure that we watch what appropriators may want to do within appropriations bills and dictating to the Department of Education how funding can be used and in what way and what manner.
Another thing that I would like to quickly touch on is something called reconciliation. Typically, we will see reconciliation happen when there is a trifecta of the same party that's in leadership. And so with Republicans having the White House, the House, and the Senate, it is very likely that they will embark on reconciliation instructions, which makes it easier to pass certain things into law. Primarily on the Senate side, it changes a particular voting threshold from 60 to just a majority vote.
But within reconciliation, it looks like there will be an opportunity for three reconciliation bills, and, of course, items within the higher education space will likely be included and typical items that might save money will likely be included. So, some of you may have heard of the College Cost Reduction Act. It is Dr. Foxx's bill in order to basically hold institutions more accountable and to increase college affordability. And it's likely that proposals from that bill will continue on to the new Congress and actually be included in reconciliation if those proposals actually saved money.
So, top of mind, these are some of the things that I'm thinking about right now. But I turn it back over to you, Jon.
Jon Fansmith: Yeah, and that's actually a great... Thank you, Emmanuel.
Running down across the four of you, all of the different things you are looking at, and then also I am paying attention out of the corner of my eye to the chat where something, a relatively recent tradition in these that I've loved, which is people checking in and saying hi from where they are. It brings to mind one big thought, which is, one, we are looking at institutions just in this webinar alone who are every region of the country, rural, urban, community colleges, religious institutions, large research institutions, and then you're hearing all of these different areas of policy that are impacting colleges and universities.
And I think one thing to keep in mind, there's tremendous interest in what a new Congress and new administration will mean, it doesn't in a lot of ways change how we approach the federal government as colleges and universities and as your representatives here in DC. We will be just as engaged. We will be just as active. There are too many things happening that are too meaningful across way too many areas for there to be this effort to disengage. And if anything, it makes it more important when you see, especially in incoming administration that's been critical of higher education and the value of the higher education enterprise, that makes it more important that our voices are out there.
And so it emphasizes the work we do. We're incredibly grateful for the support of our membership, all of you tuning in and reaching out to your delegations and lifting up the voices and working with us on this. That work gains extra weight going forward. Lots of work ahead. That's fun. That's exciting. We're going to start filling in some pieces of what exactly that work looks like, starting maybe with the administration itself.
Pete talked about the Chevron deference and the powers of executive agencies, but certainly if you are a new administration and you want to make things happen, waiting for Congress to pass legislation might take a while. You have enormous regulatory and executive authority to change things. And certainly, the subject we've heard the most about in that space is around what might happen to undocumented students on campuses or international students. The general sense administration on the campaign trail, very critical of current immigration policy, very skeptical of the value of international students in many cases.
So, Sarah, what do we think we'll see right out of the gates from the administration in this area?
Sarah Spreitzer: Yeah, so Steven and I touched a bit on executive orders that we're expecting within the first day or so of the Trump administration, and I would expect to see some sort of travel ban come back. And folks may remember the first travel ban that was issued a few days after Trump's first inauguration, and that travel ban caused a lot of chaos. Part of that was because nobody knew that it was coming. Congress had not even been informed. When they tried to immediately implement it, there was a lot of confusion at the airports about how it was going to be applied. And folks likely remember that that travel ban was quickly struck down by the courts as being unconstitutional.
So, there were several other travel bans that were issued, and the one that ended up standing up was the third travel ban, travel ban 3.0. And that one really impacted a very, at least for international students, a smaller group of countries, a handful of the countries that were on the original travel bans, such as Syria, the Sudan, Yemen, Iran, although there was an exemption for students for Iran, and then also Venezuela. Although for Venezuela, it was only applied to those that had ties to the Venezuelan government.
And then there were additional countries eventually added to that trail ban, but all of those countries that were added, it was only applied to immigrant visas, not non-immigrant visas like students. And it's also important to remember that the travel ban did not impact anybody already in the United States. It didn't impact any visas that were already issued if you had already traveled to the United States. So, I think we will see a travel ban. I don't expect it to have a very big impact on our international students.
What we worry about going into the Trump administration and what we will be communicating to the transition team is really encouraging them to send a welcoming message to our international students, because we know a lot of the things that were discussed on the campaign trail, like deportation orders, are not going to impact our international students. But because there's all this discussion of immigration policy, we want to make sure that our international students know that they are documented, we are welcoming them to the United States and that there's going to be certainty when it comes to their visa.
Now, I think for international students, we're likely going to see some of the proposed rules that were in the last Trump administration, including duration of status, which could limit the amount of time a student could remain in the United States to study for their degree, either three or four years. And that would obviously be very problematic. One of the questions that we had from the audience was that President Trump said that we should staple green cards to diplomas. This was an interest in the first Trump administration, I keep reminding people, was improving high-skilled or merit-based immigration. And I think that that is an opportunity to work with the incoming administration because they are trying to figure out ways to keep some of our graduates here in the United States so that they could work and live.
Now, for DACA, DACA, obviously Deferred Action for Childhood Arrivals, that was a program that the Trump administration tried to end during the first administration. It has since been caught up in the courts. President Trump just recently said this weekend on Meet the Press that he would like to figure out a way to keep Dreamers here in the United States. There has always been bipartisan support for that population.
I think folks that are registered under DACA will likely be able to remain registered. I know a lot of schools are encouraging their DACA recipients to renew so that they have that full two-year period, even if the Trump administration starts to unwind the program. But people who are under DACA are documented. They have a deferred action against deportation, and while the administration may try to change that program, I'm hopeful that it will encourage Congress to actually take action and put the program into statute.
So, the big question I think is going to be on the undocumented population because this is something that's been discussed during the election. And President Trump has said that he will take action on day one regarding deportation. Now, he has also said that they will likely focus first on populations that have criminal charges or within the prison population. And so I think the first deportation orders that we see will be very focused on that population.
I also think, and Pete and I have talked about this, many of these executive actions will likely be tested in the courts. So, I'm not sure what is going to play out. I have been encouraged that I know that there are blue state governors already talking about actions that they can take within their states and even localities. And for our purposes, we put out some guidance back in 2017 around sanctuary campuses. We can share that in the chat. We are trying to work to update that guidance to provide some support for our institutions.
Oh, and then there was a question from the audience regarding the FAFSA. So, there have been a lot of concerns going into the Trump administration if a family, a mixed-status family, is applying for federal financial aid, have they shared information that could be used to identify them for deportation? FSA just put out some guidance on Friday regarding submission of documents to demonstrate your identity. They have made some changes, so you'll no longer be submitting those documents. There are still concerns regarding the privacy around whether or not the Department of Education can share that information with, say, the Department of Homeland Security. And I know our colleagues at the National Association for Student Financial Aid Administrators are working to try and get clarification around this.
Jon Fansmith: And Sarah, I noticed another question came in while you were talking on the subject. Someone asked, "Do you recommend that universities advise international students to return to the United States before January 20?"
Sarah Spreitzer: I am really conscious of causing panic among our international students. I think I've been telling institutions that they should be advising students of what would happen if, for some reason, they're stopped from entry into the United States what kind of documents do they need to have. Because one of the things that we saw under the first Trump administration is a lot more students were stopped trying to enter into the United States. There were questions for proof of, say, their I-20 demonstrating that they were accepted into an academic program. A lot of questions around that.
And so I think providing your international students with resources that they can use if they are stopped at the border would be very helpful. I think a lot of semesters are starting before January 20. If schools feel it's better to advise their international students to do that, they should do that. But again, I think it's important that we don't panic or somehow cause panic for our international students.
Jon Fansmith: Yeah, thanks, Sarah.
And Steven, we're talking about executive orders. You touched on how especially state actions around things like DEI have filtered up to the federal level. First 100 days of the administration, what do you think they might be doing in the DEI space?
Steven Bloom: Yeah, we've been talking about this, Jon, and I know that you and I have talked about this and Peter and I have talked about it, and I think Sarah too. I think what we could imagine that they will do probably on day one, you hear these metaphors of a big dump truck coming and dumping a bunch of things that first day. Lots of executive orders. And one of the biggest ones I think for us is going to be potentially a reprise of an executive order that the Trump administration issued on September of 2020 just before the election and near the end of that administration. And it was entitled Combating Race and Sex Stereotyping. It was targeting the federal government as well as federal contractors and would have prevented federal contractors from engaging in any training that would inculcate issues around race, sex, sex stereotyping, et cetera.
This is the first place that I remember seeing this concept called “divisive concepts." I'm putting that in quotes. And at the time, lots of higher ed institutions are federal contractors. They get research grants, they're engaged, and they have contracts with the federal government to provide a whole host of things. But the biggest area where institutions have a relationship with the federal government is through the Title IV Federal Financial Aid Program. And there's a document that the Department of Education has called the Program Participation Agreement that each participating college or university, those that are participating in the Federal Financial Aid Programs, they have to execute that. They have to sign that.
And we were worried, to tell you the truth, back in 2020 whether the executive order applied to the PPA, the Program Participation Agreement, as a kind of contract. And I remember talking with Peter and others on our staff at the time, and we reached a conclusion that it was ambiguous and uncertain. It would've had a profound impact if it was clear. I think one of the things we think is that they could take this executive order, change the date on it, and if they really want to go after DEI practices on campus, ensure that it is revised in a way to cover the Program Participation Agreement.
All institutions, if they're participating in federal financial aid, so that's Pell Grants, student loans for students, basically everybody. There are very few institutions that don't participate in that system. And so with a stroke of a pen, President Trump could, through this executive order, really, at least in the hiring and the workplace area, put a lot of pressure on institutions to stop what they're doing related to DEI in the workplace. Now, whether they can extend that to other areas of campus, that's to be determined, but I think we're worried about it.
I don't know, Pete, if you have any thoughts about it. I know you and I have talked about it a little bit.
Peter McDonough: Well, like so much else, it's going to depend on what we're talking about. And for folks who feel like it is imperative that we keep talking about D-E-I, that acronym, an evergreen challenge is going to be that you're never going to be in a conversation with people who have the same thoughts about what you mean. For some people, DEI is a particular type of program that they've read about or experienced on a particular campus. For others, it's going to be something else.
And when I think about this, I think about what that executive order sets, what it's targeting is going to be critical because it's unlikely that anybody's going to target as a concept and a practice diversity. We just went through a long saga of what that means in the context of admissions, and we're going through it in other contexts. It's unlikely there's going to be an absolute targeting of equity or inclusion.
Indeed, for a lot of campuses, those words or concepts like them are in mission statements and the like. And so I would imagine that there's a lot of campuses that are right now saying, "Let's get ahead of ourselves. Let's look at our websites. Let's look at the business cards," so to speak. What's on the doors of offices? And let's see whether we can, if you will, remove a target or remove something or rebrand and maybe even change something that is more likely than not to be in the crosshairs of that kind of executive order that Steven's talking about.
And then we're going to see what kind of challenges there are to that kind of executive order that are going to come through the courts because of what I mentioned at the top of this podcast about the disappearance of Chevron and the replacement with Loper and the question of whether there is a statutory basis for doing what Steven's talking about. Or is there some other authority that the executive branch holds for doing that?
And the more that a school is countering that, or an argument is countering that with something approaching academic freedom, these concepts, they're embedded in our mission statement. We have an institutional academic freedom that's been recognized over time by the courts, and that counterbalance is what you're trying to do here. They're going to be really interesting debates, shall we call them, both in the public commentary and rising up through the courts, I suspect.
Jon Fansmith: Yeah, thanks, Pete. And actually, Pete, I'm going to stick with you for a second here, too, because we are talking about executive actions and certainly one of the, I don't even know what you'd... It's been a pendulum swinging back and forth that we've been paying a ton of attention to over the last decade, has been first the Obama administration's and the first Trump term, and then the Biden administration's efforts around Title IX. Can you just give, I think varying members of the audience are familiar in varying ways with Title IX, but certainly there's been a ton of activity, where we stand right now, and then what we think is on the horizon with the incoming administration?
Peter McDonough: Sure, and I'm going to presume that there could be a few people among the 1,300 or so folks tuning into this podcast that know the phrase but may not know what it is. So, just to be clear, Title IX refers to a few dozen words in a statute going back 50 years. And the statute's intention, fairly stated, is to not permit gender discrimination within the context of educational programs or activities that the federal government in any way funds or supports. So, if you get federal government money, you're not supposed to be having that program or activity discriminating in some fashion or offering differing opportunities because of one's gender.
So, when I first started in higher ed longer ago than I'd like to think about, the entire conversation about Title IX back then was athletics. It was about participation opportunities, the size of locker rooms, the number of teams, the number of slots on those teams, the funding for things like travel, gym times, and field times, et cetera. We evolved over the last several years, going back to about 2011 or so, to talking about Title IX almost exclusively in the context of sexual harassment and sexual assault, and offices that were expected to be created, and responses that institutions had obligations to initiate when there was evidence of or a complaint of sexual harassment or sexual assault.
And so we went through a number of years where the pendulum has gone back and forth based upon, first, if you will, if I'll call it executive branch actions by a Dear Colleague letter coming out of the Department of Education that essentially told institutions that the Department of Education expected that when there was a concern or complaint about sexual harassment or sexual assault, this type of vigor was going to be expected from the school or maybe there will be a referral to the Department of Justice. That led to legal challenges and the like, and ultimately led to actual regulations being passed. And so now, we're going to have a question of whether those regulations, that really are process-related regulations, about how do you deal with these complaints, are going to stay in place. Some people view them as not protective enough for an accused, typically a student. Others view them as not offering enough protections.
But the real, real headline issue has been about transgender student athletes and trans students more generally. And will we see action in that front, it's something that I think we can all appreciate, had a lot of political play in the last election. Will that be a tip of the spear, so to speak, in talking about Title IX? Or will that recede to talking about Title IX in the context of broader athletics discussion about name, image, and likeness, about other things that are happening on the broader athletics front? Or will it recede because we're going to talk again about how an institution should respond to complaints of sexual harassment or sexual assault?
There's a lot under that Title IX umbrella, Jon. And those of you that follow the politics, and are anticipating what this administration is likely to do informed by the politics, might have a prediction about what's going to be on the tip of that Title IX spear.
Jon Fansmith: And if you do have that prediction, be sure to share it with us. It'd be interesting to see in the chats too. But thanks for... I think that was, given the complexity and the range of issues covered to hit all the high points in about four minutes, I think is what you just did that in, was pretty impressive.
Again, questions coming in. If there's specifics on any of these things we're raising, feel free to reach out.
But Emmanuel, we are now over half an hour into this webinar and we have not yet talked about the nominee to be Secretary of Education, Linda McMahon, which, almost remarkable that we've covered as much as we have and still haven't gotten to this point. What do we know about the secretary-designate? What do we know about her policy preferences, her background? What do we know? That's the big question for you.
Emmanuel Guillory: Well, that's a good question, Jon. So, what we know about Secretary of Education-designate Linda McMahon is that she does have a degree from East Carolina University, and she also served on the Connecticut State Board of Education, and obviously had a big role in her position as CEO of WWE, which I think a lot of news was written about that. But in her efforts to positively impact the higher education space, she does serve as a board member for the Sacred Heart University on the Board of Trustees there. And she was actually on the board from 2004 to February 2017, but then rejoined the board after serving as administrator of the Small Business Administration, rejoined the board in 2021.
She also co-founded a think tank called the America First Policy Institute, and so you can go there and see some of the policies that have come out of that, or proposals that have come out of that around the higher education space. But she's also on record for saying that she supports the Pell Grant for short-term programs. So, we do know that about her too as well.
And we're beginning to learn more and more about her. She actually is on Capitol Hill now meeting with respective members in order to prepare for the confirmation hearing, which is coming up. And so within that hearing, we are likely to hear both Republicans and Democrats talk about student loan debt forgiveness efforts from the Biden administration and what she would want to do about that, whether it's, do you want to keep doing it or not doing it? I'm pretty sure that we'll hear about the SAVE Plan and what's happening with that. What are the department's attempts to either get rid of the SAVE Plan or to continue the SAVE Plan? What does that look like?
Issues such as financial value transparency and gainful employment, that will likely come up in a confirmation hearing. What is your strategy here? What are your plans? What do you want to do? Do you want to rescind? Do you want to keep? Do you want to modify? Accreditation is another big topic that will likely come up in a confirmation hearing that this new administration would consider. Obviously, we've heard on the campaign trail that President Trump has shared that accreditation could be the secret weapon to holding institutions more accountable. So, what does that look like?
My colleagues have already talked about Title IX, which will obviously be something that this new administration will consider. And the Office of Civil Rights and what will happen there with the, quote unquote, cultural wars? What does that look like, and what will be the administration's response to that too? All of these types of topics are very likely to come up in a confirmation hearing, but she is preparing for that because that will ideally take place early in the new Congress.
And in thinking about this new administration and what they would likely do, well, we can look back on history and what has been done before. Typically, when a new administration comes in, obviously new administrations come in with an idea of how things should be done, and with a different perspective and view on it. And so with a different perspective and view, that often translates to regulations that have been passed before that maybe the new incoming administration doesn't quite agree with. And so it looks like modifying old regulations or looks like completely getting rid of old regulations.
I often call this ping-ponging, which can be a bit challenging when it comes to compliance and ensuring that institutions know what to do and how to do it so they're not penalized in any shape, form, or fashion. But we are likely to see within the first 100 days of a new administration, we are likely to see some action at least taken on getting borrowers back into repayment. Borrowers have not been repaying their loans for quite some time now because of litigation, and so I think that there will be an effort to get borrowers back into repayment, for sure.
I think that this new administration will definitely look at what the Biden administration has done as far as regulations are concerned and start putting together a plan to modify, edit, change, rescind completely, or issue new sub-regulatory guidance around certain regulations, or just rescind certain sub-regulatory guidance around certain regulations.
And as an example, at the Office of Management and Budget, which is an organization within the federal government, it's an agency within the federal government that basically any regulations that any of the agencies want to do funnels through the Office of Management and Budget. And the Office of Management and Budget, also known as OMB, has to approve those before anything else can continue moving forward. Well, the department just sent over regulations around distance education and return to Title IV and the TRIO programs, and it's the month of December.
Who knows what's going to happen with that when a new administration comes over? Just as an example. This is something that is an idea coming from the Biden administration. And I would likely, I think I can be certain to say that the Trump administration might feel differently about those three issues. What do you do with the TRIO programs? What do you do with return to Title IV? What do you do with distance education? Also, what do you do with gainful employment, financial value transparency? What do you do with 90-10 regulations or changing ownership and changing control? The borrower defense, closed school discharge, the list goes on.
So, what the department will do is there will be a unified agenda that will be released of what we could expect them to work on. And they will make sure we have an understanding of, what is it they're looking to accomplish and kind of what direction are they wanting to go in? This particular administration now, the Biden administration, had a very robust regulatory agenda, and so we can only assume that the new administration might have one that is equally robust, but might be doing things that are a bit different, but first with some rescissions and modifications, I'm sure, to current regulations that exist.
Jon Fansmith: Thank you, Emmanuel. Yeah, certainly what we saw in 2016 was a very aggressive regulatory effort by the incoming Trump administration to both undo the Obama administration's higher ed regulations, and then put their own stamp on federal policy in that area. Good to highlight the ones that will be top of mind.
Before we move over to Congress, I do want to ask you, Emmanuel, Linda McMahon sailed through confirmation when she was appointed to head the Small Business Administration. Her colleague in the first term, Betsy DeVos, actually required the vice president to cast a tie-breaking vote because it was so close. Two very different outcomes, both confirmed. But going into this, you highlight all the different things she might be asked about, the policy positions. Just for people who might be betting on the outcome, what would you say? Is it likely she's confirmed, easily confirmed, difficult challenge? What do you think that looks like?
Emmanuel Guillory: So, I think that Secretary of Education-designate Linda McMahon is in a different position than former Secretary of Education Betsy DeVos because of her previous role as administrator of the Small Business Administration. She actually did a pretty good job in that role and got rave reviews, from what we know, from the employees that worked with her at the Small Business Administration and is known to be quite successful at her endeavors.
So, I will say that particular... And not to say that Secretary of Education Betsy DeVos was not, but just thinking about her role already within the administration, proving to have done well, given a responsibility, have proven to have done well with that responsibility, now coming back in with another task, I think that that will be helpful for members to have a reference point that they can point to and hopefully say, "Okay, there's a lot of transferable skills here that you can bring to the department."
So, how can we ensure that this Department of Education is more effective? How can we ensure that this Department of Education is truly putting students first? What does that look like? And I think that she will be able to pull from her experiences in a way that might make members feel a bit more comfortable. But it's always an uphill battle. Because it doesn't matter who the person is, the opposing party likely will always have the greatest concerns.
But if we look at Secretary of Education Miguel Cardona, his confirmation hearing was not very confrontational at all, not what we would have expected. And so I'm predicting a better outcome, and we'll have to wait and see.
Jon Fansmith: Great. Well, for those of you also who are asking about abolishing the Department of Education, this was a Trump campaign for us, we talked a lot about this in the session we did right after the election, so we're not going to cover that again this time. I would recommend you go back. It's available on our website. Check that out. We have a pretty robust discussion around that, which I think, since in the intervening month, I think we probably feel even more confident in terms of the predictions we made. So, I'd say that.
Moving to Congress, we're three quarters of the way through and we are just now getting to Congress and what they might do in the first 100 days. And there are some substantive things on the slate for Congress. But Steven, I'm going to start with you a little bit because we had a question from, let me just find it, from Elizabeth Bradley, who asked about the endowment tax. And I think the endowment tax, when we think about it, ties into something bigger around reconciliation that we touched on at the lead. Give us a sense, and Emmanuel, I'm going to come back to you because there's another part of reconciliation worth going into, but tax-wise, Steven, tax and reconciliation, and what do we expect to see out of Congress?
Steven Bloom: Sure. Thanks, Jon. I don't know if this is going to occur within the first 100 days, but it's certainly going to be a major focus next year. I know Emmanuel briefly talked about reconciliation. It's a special process that's protected against the Senate filibuster, but it has its limits. Things that can be included in a reconciliation bill have to impact the budget in some way, either raise revenue or a tax increase or cost money, spend money in a sense.
And it's been used by both parties over a number of presidencies. President Obama used it to pass the Affordable Care Act. President Trump tried and failed to repeal the ACA, and then impasse tax reform in 2017. And then the Biden administration used it for the American Rescue Plan and the Inflation Reduction Act. And it's been around. Even President Reagan used it way back in the 1980s, so it's a tried and true process that allows for big legislation really in the tax space, but oftentimes other things can get attached as long as they have a budgetary impact. That's really a complicated process. We won't go through the details of it now.
There's a debate already, we see, going on between the House and the Senate about whether there should be one big reconciliation bill early in the administration. That seems to be the House view coming from the chairman of the Ways and Means Committee, who's going to be the principal author of the bill. And then you see in the Senate, the Senate, incoming Majority Leader Thune saying, "Oh, no, we're going to do an early bill that's going to focus on the border security and energy." I suppose that means some of the IRA energy provisions, and then one later in the year on extending the expiring provisions that were passed initially as part of the tax reform effort in 2017.
So, we're already seeing a debate about that, and we don't know how that's going to sort out. We're going to watch and certainly be very engaged with it. But on the endowment tax, it's a good question. That would be one of the provisions that could be potentially included in there. There's really going to be a two-pronged approach. One is going to be the search for revenue, and they will look for a bunch of provisions that would raise a lot of money to help pay for it, the expiring tax provisions from the 2017 tax bill. To just extend those for 10 years, that would cost $4 trillion. And so there's a question of, how much of that do you pay for?
And so they're going to be searching for revenue, and then they're going to be trying to do some policy changes. And the endowment tax may be one area that's important to higher ed, and there's lots of ways that could be changed right now that the endowment tax applies to. At least as of 2023, 56 institutions paid it, according to the IRS, and it raised about $380 million that year. And there are lots of ways you could change it. You could broaden it. You could raise the tax. There are many, many bills that have been introduced. We're tracking about 13 bills introduced since 2023.
So, that is something we're going to be following and we're worried about. There are other potential changes in a reconciliation bill that would be potentially impactful on higher ed, like changes to charitable giving. After all, both public and private institutions receive charitable gifts, and there might be changes to that to either enhance charitable giving, particularly among so-called non-itemizers, and maybe make changes in other ways to raise revenue. And then potentially changes to repealing parts of the Inflation Reduction Act, the climate tax provisions that might serve as a revenue-raiser to help pay for the bill. And then potentially even repealing the Affordable Care Act. That was what was attempted by the Trump administration in the first Trump administration. We'll have to see. That one could have potential huge impact on students and institutions, et cetera.
So, it's going to be a big debate next year. And I know I can hand it to Emmanuel because I know there's a CCRA we're worried about as a potential being attached to a reconciliation bill.
Jon Fansmith: It's all you, Emmanuel. Take the baton.
Emmanuel Guillory: Well, that's a nice tee up, Steven.
So, as my colleague, Steven, mentioned, the College Cost Reduction Act is a bill that will likely be considered in a reconciliation package. And remember that there could be up to three that this next Congress could consider. But when you think about the CCRA, we had to think about it in two different ways, actually. So, the bill overall saves $185.5 billion. When it comes to reconciliation instructions and when it comes to passing something called the Byrd test in the Senate, where the Senate parliamentarian has the ability to say, "Wait a minute, this proposal idea doesn't meet the reconciliation instructions," whether that is spending or bringing in revenue or if it was a debt limit issue, because they could do it on debt limit too.
So, let's just say that this is saving money. This doesn't save any money, so therefore this doesn't pass the Byrd test. Within the CCRA, there are provisions that save, and there are provisions that cost money actually, even though overall the bill saves money, but there's savings and there's costs. So, for example, to eliminate grad PLUS loans, that actually saves money. That saves $40.42 billion if you're going to eliminate grad PLUS loans and amend limits for the unsubsidized graduate loans. Now, if you are going to eliminate parent PLUS loans, then that costs $14.14 billion.
So, that's to give you an example of within the CCRA how one proposal can cost, one proposal can save, but together and how they all interact collectively, there is a savings of $185.5 billion. So, we have had conversations already with staff about, "Would you want to put forward the CCRA if there's a reconciliation?" There seems to be a sense that yes, the answer is to that is yes. However, we are waiting on a new chairman of the House Committee on Education and the Workforce, and we should be finding that out this week on who that will be.
The College Cost Reduction Act will have to be reintroduced in whatever new shape, form, and fashion that it will have. It will likely take on the wishes of the new makeup of the committee. Because remember, it's an effort where you have to get buy-in from your own members first and foremost, and they may have different ideas and different ways to do things, and so this bill would likely look different. It wouldn't be the same. And definitely, once the bill was introduced, whatever version was introduced, there would be a new score from the Congressional Budget Office, which would then likely not look like it's saving $185.5 billion. It could save more money, or it could potentially save less money. So, we have to think about all these different factors as I give you the example of eliminating grad PLUS and parent PLUS loans.
But what we have seen historically is that there seems to be a trend around elimination of PLUS loans, for example, as the example. So, there will likely be that proposal again. We can't assume necessarily, but likely yes, based on history. So, even though this bill might look different, the concepts of the bill will likely stay the same. So, risk sharing is obviously something that's in the bill too as well. And the risk sharing part of the bill, this saves 40, actually this saves $9.24 billion for one particular piece of it.
Overall, how it all interacts together, it's saving over $18 billion, but that takes into account institutional behavior and what does that look like, and some other things too as well. And to counterbalance that, the Promise Grant Program is a program that the committee had came up with in order to help low-income students, and that program costs $7.21 billion. Hopefully, I covered enough about CCRA.
Jon Fansmith: Well, I think, and one of the big things worth mentioning, we have as a community expressed a lot of concerns with the proposals in CCRA, and certainly discussion of CCRA being either in pieces or as a whole considered under reconciliation. And the expedited path to passage is something we remain concerned about.
So, as we sit here on December 10 and these conversations are being had in Congress, if your institution and your government relations folks and your leadership haven't looked at the bill and the impact on your institution, I think our producers dropped a link into our analysis of the bill. The committee itself has their own analysis of the bill. You should take a look at that and see, because I think a lot of institutions are rightly concerned about, if this were to be included, what it might mean. And this is the time to let your members of Congress know those concerns while these discussions are held. So, thank you, Emmanuel, for a pretty comprehensive overview of that. And would just urge all of you take a look at it, look at the resources we have available, do your own research, but draw the conclusions you need for what's best for your institution. Let your members of Congress know what that might be for your campus.
We are running close to time. And we've talked a lot about what we expect out of the administration, what we expect out of Congress in the first 100 days. Before we leave, and appreciate all the questions that are coming in, wish we could get to all of them, I am going to ask the four of you, you have an audience of hundreds of institutional leaders in front of you right now. We've talked about the things we expect to see on the horizon. What are a few steps these people, I just said, "Look in the CCRA and follow up," what are the other things you might say while you have this audience in front of you, actionable steps you can take to prepare for the challenges coming forward in the next few months?
Steven, why don't you kick us off?
Steven Bloom: That's a good question, Jon. I'm not sure I know the answer.
Jon Fansmith: I don't think any of us know the answer.
Steven Bloom: Yeah, I don't think we do. I was actually speaking to the board of an institution last week and a similar question came up. I think you've heard in this podcast, and I know the one right after the election, a menu of what we expect to see in the coming Trump administration. And if there are things that are of concern to you, I think you need to get yourself organized on campus in terms of figuring out if you're going to advocate to protect things, defend what you believe in, principles you have, protect international students and maybe undocumented students, et cetera. You got to get yourself organized and think about how you're going to do that within your institution, and who may lead an institution to be monitoring what's going on in Washington. We try to help our members understand that. Other of our member associations do that too. And I think that would be really important to do, is try to get yourself organized on campus to be able to engage if you want to at the right moment.
Sarah Spreitzer: I would say, sorry if I'm jumping the queue, I would say don't panic. I think it's really important not to panic too. There are opportunities here. It's a new administration coming in, to educate and offer to be a resource for folks in the new administration. We have a lot of new members of Congress coming in, and I know Emmanuel will back me up on this, going up to the Hill, meeting with your members, whether it's in Washington, DC or back in the district, and talking about your institution and the importance of the institution, not just to your students, but to the surrounding community is a really important thing to do.
And I would just do a quick plug for our first day on the Hill, which is going to be February 11 when we're going to have ACE presidents and chancellors talking to members of Congress about the importance of higher education. All of those efforts are going to be so important in the next year. Again, because we have brand new members coming to Washington, DC, we'll have a lot of brand new people in the administration who may not realize the role that we play in the larger United States economy, communities across our states, across our regions. So, that would be my two cents.
Jon Fansmith: Yeah, thanks, Sarah. And I'll say that's a really good point, really good advice, and especially for whoever it was among the audience who submitted the question, quote, "Are we all doomed?" We are not all doomed. In fact, we are well-positioned to do a lot of really important work, so Sarah's point's critical there.
Emmanuel, Sarah referenced that you would back her up, but you might have your own thoughts. So, what would you recommend to this audience?
Emmanuel Guillory: Yeah, so in line of what my colleague, Sarah, shared, new administration equals new opportunities. New members of Congress equals new opportunities. New leadership, new opportunities. Those new opportunities are opportunities for you to go and share your story, tell your narrative, and make sure that your members of Congress understand the value that you bring to the table. Because right now, the value of higher education is under attack in a lot of ways because members want to be able to say, "Prove the value to me. Prove your value." And it's important that you develop positive working relationships with the members and their staff and make sure that you're telling your story accordingly. So, I'm excited about what's to come because it gives us an opportunity to continue to advocate, and advocate in more effective ways.
Jon Fansmith: Great. Thank you, Emmanuel. And Pete, I will give you the, not the last word, I get the last word, but you'll get the penultimate word.
Peter McDonough: Well, I'd say that this is a good moment too, if you will, update your understanding of things you take for granted on campus and in your local communities, and even in your state. What do I mean by that? What exactly does your institution's mission statement say? I mentioned mission statements earlier. What is indeed the current relationship between your campus security or police and the external authorities? Many campuses had issues over the last year or two that may have redefined or reset those relationships. When you need them to come or when they are asking for support to implement some of the things we might've talked about today, what are going to be the practical realities? What's the relationship between the chief of police in your town or city and the mayor? What's the relationship between the mayor and the State House? Have these things in mind now so that, as you're starting to think about issues as they arise, maybe even at the federal level, you're not ignoring the practical realities and the political realities, small P, that you're going to have to have in mind as you work through those things.
Jon Fansmith: Yeah, thanks, Pete. And we are right up on time, so I'll say there's a lot of change and, as Emmanuel said, there's a lot of opportunity here. And we have seen a lot of engagement, and that is really both, I think, a promising sign for what we can look forward to next years. It's important to think about opportunities to think about where we can make an impact.
And especially want to thank all of you, not just for that support and engagement and participation, but for the work you do talking about the value proposition of higher education. You're very good at that in your communities and your campuses and with your students working together. We're going to uplift that message. And we're going to make all of these policy changes as they're being considered seen through that spectrum of what they do for not just our students, not just our campuses, but our broader community and nation as a whole. So, we are very grateful for the work you all do. We're grateful to you for participating today, the support and the feedback we get from you. Thanks for it. Keep it up. Give us as much as you can get. We're going to push out as much as we can back to you. And thanks again. We'll see you all in January in a new year with lots more to talk about, no doubt. Thanks again.
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. Don't forget to follow ACE on social media to stay updated on upcoming episodes and other higher education content. You can find us on X, LinkedIn, and Instagram. And of course, if you have any questions, comments, or suggestions for future episodes, please feel free to reach out to us at podcast@acenet.edu. We love hearing from our listeners. And who knows? Your input might inspire a future episode.