Inside Higher Ed: Romney reveals higher education plans

By Libby A. Nelson for Inside Higher Ed

May 28, 2012

Mitt Romney, the presumed Republican presidential nominee, pledged last week that, if elected, he would reshape or do away with two major Obama administration higher education policy initiatives: the overhaul of the federal student loan programme and tighter regulations on for-profit colleges.

In his education plan, the former governor of Massachusetts also proposed consolidating some federal financial aid programmes and changing eligibility rules for Pell Grants to ensure the programme’s financial future.

During the Republican primaries, Romney was all but silent on his proposals for higher education. The decision to release a detailed platform document (accompanying a speech that focused on the candidate’s plans for elementary and secondary education) more than five months before the general election underscores the surprisingly prominent role that college costs and student debt have played in the 2012 election so far.

And although Romney blames Barack Obama for abetting price increases in higher education by increasing federal financial aid, on at least one point the rivals struck the same note: “The federal government will no longer write a blank check to universities to reward their tuition increases,” the platform document said, echoing the president’s putting colleges “on notice” over costs in his State of the Union address in January.

In the platform document, the Romney campaign paints a bleak picture of the higher education landscape. “America is fast becoming a society where education is unaffordable, a government loan is an entitlement, default is the norm, and loan forgiveness is the expectation,” it reads. “America needs a new normal, where college is affordable and paying off debt is achievable.” (Despite the doomsday tone, the platform actually understates a key statistic on student debt, claiming that “nearly half” of undergraduates borrow to pay for college, when in fact two-thirds do.)

Higher education lobbyists cautioned against reading too much into Romney’s proposals given that the general election campaign has barely begun. Nevertheless, the platform’s release suggests that higher education issues will continue to play a role in the 2012 presidential race – and that the question will not be whether the federal government should act to contain tuition costs, but how it will go about doing so.

Romney calls for simplifying federal financial aid, calling the current system – with two major grant programmes (plus numerous others) and three varieties of student loans – “needlessly complex”. While the platform does not specify what changes a Romney administration would make, simplification would probably mean ending the Supplemental Educational Opportunity Grant, a campus-based programme that provides up to $4,000 (£2,550) for needy students. (Whether it would also eliminate the Perkins Loan, another campus-based program that the Obama administration hopes to expand as part of a plan to contain college prices, is unclear.)

The Republican hopeful also calls for a return to bank-based student lending, which was phased out beginning in 2010 as part of the healthcare overhaul. Under the previous system, banks made federally guaranteed loans to students and received a subsidy in return. The Education Department now makes the loans directly, redirecting some of the savings to Pell Grants and some to deficit reduction.

Romney says the current system has led to confusion about students’ borrowing obligations. He argues that a return to bank-based lending means that students would “receive support that goes beyond a call from a collections agent to help keep them on track to repayment”.

Criticism of the new direct lending system has been a mainstay for Congressional Republicans since the switch occurred. But few believe that a return to bank-based lending is likely because of the increased cost of the subsidy for lenders.

“I have no idea how they would do that without dealing with significant budget costs,” said Terry Hartle, senior vice-president for government and public affairs at the American Council on Education. “Obviously, this has been a controversial issue around direct lending and bank-based lending for a long time.”

Romney also calls for changes to “refocus Pell Grant dollars on the students that need them the most” – presumably by tightening eligibility criteria, an approach Congress has adopted recently as a cost-cutting measure.

Earlier this year, Romney praised Full Sail University, a for-profit institution, for its efficiency. The platform document continues that tone, saying that the administration’s aggressive regulation of the for-profit sector has distorted incentives for colleges to innovate. The document also praises competency-based approaches to granting credentials, calling for models that allow students to learn at their own pace rather than requiring individuals to complete set amounts of classroom time to earn a degree or credential.

Romney’s praise for Full Sail is not the campaign’s only tie to for-profit colleges. Two of the candidate’s education advisers have lobbied on behalf of the Apollo Group, the parent company of the University of Phoenix. One of those advisers, Bill Hansen, as deputy education secretary in 2002 wrote a memo that favoured fines over stiffer penalties for violations of rules governing for-profits.

The platform document strongly criticises the Obama administration’s “gainful employment” rule, which seeks to tie eligibility for federal financial aid for vocational programmes, especially at for-profit colleges, to repayment rates on federal student loans and students’ incomes after graduation. Although Romney does not promise outright to repeal the rule, he says that his Education Department would focus on collecting and disseminating data – not on “complicated and unnecessary” regulations. (Non-profit colleges would welcome the repeal of some of those regulations as well, particularly the federal definition of a credit hour and the state authorization rule, which many fear will limit online programmes.)

“Romney will pursue genuine reforms that unleash the forces of innovation on our institutions of higher learning, pressing them to improve their education models and forcing them to compete against new entrants with entirely different models,” the platform document reads.

Critics of for-profit colleges argue that such an approach would lead to more fraud and abuse within the industry. “The point of the gainful employment rule is to reward schools that actually help students learn and build careers, and to penalise schools that don’t do that,” said David Halperin, the founder and former director of Campus Progress and an advocate for tighter regulations on for-profit colleges. While Romney’s support for increased disclosure is a good sign, he said, it would not go far enough because students might have difficulty understanding the information.

On one area important to many colleges and universities, Romney proposed no changes: federal funding for basic research.

Although he has supported budget-cutting plans that some argue will endanger such funding, he argued that the federal government should maintain its role in paying for scientific research. “The long-term federal investment in basic research within institutions of higher learning has been a crucial engine for innovation in our economy, and one that could not be replicated through other sources of funding,” the platform document argues. “A Romney Administration will maintain a strong commitment to research in the physical, biological, and social sciences and to ensure that the priorities for research funding are not hijacked by short-term political imperatives.”

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