Washington Whirlwind

Health care is dominating the headlines and consuming most of the oxygen in federal politics these days, and that’s likely to remain the case through the fall as President Obama and Congress work to pass legislation to reform the American medical system.

But as lawmakers returned to work this week after their August recess, a flurry of news developments Wednesday served as a reminder that higher education issues remain a top priority for the administration and its Democratic allies on Capitol Hill.

Among the developments:

  • The Education Department on Wednesday announced that it would create two committees of college officials, consumer groups and others to propose new federal regulations governing foreign schools and issues related to the "integrity" of the student financial aid programs.
  • Sen. Tom Harkin, an Iowa Democrat known for his strong support of the National Institutes of Health, will replace the late Sen. Edward M. Kennedy as chairman of the Senate Committee on Health, Education, Labor and Pensions. The way was cleared for Harkin when Sen. Christopher Dodd (D-Conn.) said he would remain as head of the Senate’s banking committee.
  • Vice President Joe Biden brought his White House Task Force on the Middle Class (and two Cabinet secretaries) to Syracuse University for a forum on college affordability, in a conversation that featured some tough talk about college tuition and lots of love for community colleges. In conjunction with the meeting, the White House also released three reports, on financial aid simplification, 529 savings plans, and the major barriers to a college education.

The flurry of activity comes as the centerpiece of this year’s higher education legislative landscape — a measure to carry out the Obama administration’s plan to remake the federal loan programs and use the savings to bolster Pell Grants and two-year colleges — remains, like most other things in Washington, hostage to health care.

The White House is obviously hoping that President Obama’s primetime speech last night gets the contentious debate about reforming the health system back on track. What happens there is not incidental to the student aid legislation, because the fate of the two measures are intertwined. That’s because Congress is virtually certain to consider the higher education bill, which the House passed in July, through the process known as "budget reconciliation," in which Congress, using a restrictive set of voting rules, considers legislation that materially affects federal mandatory programs, like Medicare and student loans.

Administration officials would prefer to pass health care legislation through normal channels with bipartisan support, and considering it through budget reconciliation would be a fallback only if Democrats fail to get Republican backing and must ram it through Congress without any.

Congress can consider only one reconciliation bill in any single session, and lawmakers, in May’s fiscal 2010 budget resolution, set an October 15 deadline for the drafting of a reconciliation measure for this year. So there is unlikely to be much visible movement in the Senate to craft its version of the student aid legislation until the health care legislative picture becomes clearer.

One thing that did become clearer Wednesday is who will be leading the Senate’s work on the bill. Kennedy had been ailing for nearly a year before his death last month, but his staff had continued to work with Sen. Barbara Mikulski (D-Md.), whom Kennedy had asked to fill in for him, on education issues. Dodd had seniority on the health and education committee, but he decided Wednesday to stick with his current post as head of the Senate Banking, Housing and Urban Affairs Committee rather than take over the HELP panel.

Harkin was next in line, but it was unclear whether he would give up his chairmanship of the Agriculture Committee considered so important to his Great Plains home state. But the opportunity to get into the thick of deliberations over health care proved too strong a draw. “This is an opportunity to lead the charge on health care, on education and on making sure that working families get a better share of the dollar and to help do something to strengthen the pensions and retirement systems in this country,” Harkin told Radio Iowa, “all issues I care very deeply about and affect every Iowan and every American, so I look forward to working on those issues.”

Harkin is considered a friend of higher education, and is seen as a strong backer of two-year institutions, particularly, pushing during the economic stimulus bill, for instance, for community colleges to get a set share of facilities funds. But as head of the Senate spending subcommittee that allocates annual funds for education, health and labor programs, he generally tends to favor biomedical research and other health programs over education when faced with a choice of where to direct extra funds. Harkin, who has been heavily influenced by the experiences of his brother, who is deaf, played a key role in passage of the Americans With Disabilities Act and the creation of the NIH’s National Institute on Deafness and Other Communication Disorders.

New Round of Rule Making

The Education Department’s announcement Wednesday that it would set up two panels to negotiate new federal regulations governing issues related to program integrity and foreign institutions offered a few more details about what the department hoped to explore than did May’s preliminary announcement. That announcement sparked concerns from a small number of for-profit college officials and analysts that the Education Department was planning to significantly ramp up its scrutiny of such institutions, because several of the issues department officials said they planned to examine — notably rules related to incentives paid to recruiters based on enrollments — are particularly acute in the for-profit sector. Department officials strongly challenged that speculation, saying they cared about the quality and student experience at institutions of all types, and had no special targets in mind.

Wednesday’s announcement provided an expanded list of (tersely worded) topics that the department wants the still-to-be-nominated-and-chosen members of the "program integrity" committee to weigh, and at least one of them could inspire those looking for signs of peril to believe that the department has it in for for-profit colleges: "Misrepresentation of information provided to students and prospective students." While certainly any college, two-year or four-year, nonprofit or for-, could be accused of misleading students about their job prospects or other aspects of their educations, this is the sort of accusation that is often made when students sue for-profit colleges, and in sometimes highly publicized exposés about the sector.

Another area of scrutiny newly identified by the department is the "ability to benefit" test that a student without a degree from an American high school must pass to qualify for federal financial aid. While plenty of students at community colleges and other nonprofit institutions fall into that category, so too do many at for-profit colleges.

Mark Kantrowitz, publisher of Finaid.org and an expert on federal financial aid, said that as he looked at the issues the department plans to explore, he doesn’t "get the sense that the department has painted a target on the for-profits," since most of them were either "identified by Office of Inspector General audits" or arose "as a consequence of the Higher Education Opportunity Act" passed last year. Several of the issues, like those related to satisfactory academic progress and "monitoring grade point averages," flow from Congress’s decision to allow students to receive two Pell Grants in a single year, he said. "The department’s focus really seems to be on improving the efficiency of the programs," he said.

College and the Middle Class

As department officials unveiled their next regulatory steps, the agency’s leader, Education Secretary Arne Duncan, joined Vice President Biden, Treasury Secretary Timothy Geithner and others at a town hall meeting on college affordability at Syracuse. Unlike many such recent meetings on health care, this one was decidedly good humored, despite its underlying premise that college is unaffordable for too many students and families.

"I’m one of the poorest men in the Senate, and there’s one reason for that: college," said Biden, who recounted the various colleges and graduate schools he’s put his children through. "I had debt, and my children were left in debt, tens of thousands of dollars in debt."

Despite critical rhetoric like that, the discussion among the many college presidents and other officials in the audience at Syracuse’s Schine Student Center was largely upbeat because the Obama administration has decided that the country must invest in higher education to secure its future — in the form of tens of billions of dollars in the economic recovery package, and promises of tens of billions of dollars more in the aforementioned student aid legislation. "We got our brains beat out" for the heavy spending on education in the stimulus package, Biden said. "But we don’t want to just get out of this great recession. We want to come out having built a new platform for the 21st century so we can compete in the world."

What’s not clear, though, is whether the administration and/or Congress will use the promise of additional funds to compel the kind of change in colleges’ operations that most experts believe is necessary to make the industry viable for the future, and to meet the president’s goal of getting millions more Americans out of college with credentials.

Nancy Zimpher, the new chancellor of the State University of New York system, insisted that higher education leaders are getting it — if not because of pressure from policy makers, then because of economic necessity. Colleges are operating dual enrollment programs so that some students are "getting their associate degrees and their high school diplomas on the same day," she said, expanding their online offerings to help placebound students earn degrees. "A market driven mentality has not escaped us," Zimpher said.

As befits a man who, as he put it, "sleep[s] with a woman every night" who has spent her professional life teaching at community colleges, Biden led what could only be called cheerleading for two-year institutions as a (if not the) solution to the country’s college affordability and access problems. "This is really their day in the sun," Duncan said of community colleges. "They are increasingly being seen as the valued jewel in higher education."

In addition to the pep talks, administration officials also made a bit of news at the Syracuse event. Duncan endorsed federal legislation that would shield from taxation the value of any student loans forgiven for a borrower through the government’s income-based or income-contingent repayment options. In a letter to Rep. Sander Levin (D-Mich.), who sponsored the legislation, Duncan said the administration would support the measure if its $100 million annual price tag, once fully phased in, is paid for.

The White House also released three studies in conjunction with the middle class task force’s town hall meeting. One, produced by the Treasury Department at the direction of Biden’s task force, analyzes the advantages and problems of Section 529 college savings and prepaid tuition programs, and makes a set of recommendations for improving them. The report notes that the programs are of little use to low-income families, but suggests that rather than trying to change that, the administration focus on making them as useful as possible for the middle class, and let grant and loan programs help the financially needy.

The chief recommendations for making the programs more effective and cost efficient: imposing a national cap on how much any one recipient of the college benefits can receive (rather than having state-by-state caps that allow people to sock money away for a family member in multiple states) and strengthening competition among states by eliminating policies in states’ programs that discount fees for home-state residents.


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