Five things to watch for in Obama’s second term by William C. Smith and Bryan Mann

This is the conclusion of a three-part series that reflects on and projects the state of education policy within the Obama Administration.  Part one of the series, a breakdown of the Obama Administration’s K-12 policy, can be found here[1]. Part two, which analyzes the Obama Administration’s Higher Education policy and emphasis areas, can be found here[2].

Five policy actions will largely determine whether Obama’s 2012 policy promises for K-12 and higher education will come to fruition.  Entering his second term without an overwhelming mandate, with a divided congress, and in a struggling economy, one can only assume that the debate around these five policy actions will be fierce and the progress will be slow and muddled.  After a term of sweeping reform in K-12 education, we believe the administration will place increased emphasis on higher education reform in the upcoming years.

#1: Higher Education Act Reauthorization

The Higher Education Act (HEA) was created in 1965 by President Johnson and was designed “to strengthen the educational resources of our colleges and universities and to provide financial assistance for students in postsecondary and higher education.”[3]  It was last reauthorized in 2008 and is set to be reauthorized again in 2013.  During the reauthorization, expect the administration to push for some sweeping changes to campus-based aid and student loans[4].  These alterations may include re-defining certain terms, namely “gainful employment”, “good value”, and “credit hour”.  After being dismissed by the courts, the “gainful employment” clause of the HEA may be expanded to specify the type of employment and an acceptable amount of time between college completion and employment.  “Good value” may encompass some of these post-college indicators as well as college completion, persistence, and debt rates.  In addition, attempts by the federal government to create a national definition of “credit hour” have been stalled by the Senate[5], making the HEA a potential venue for its reintroduction.  Other debates surrounding regulation that may define HEA reauthorization include: the government’s desire to connect the Federal Perkins Loan Program to a colleges ability to maintain tuition costs[6], the capping of the percentage of an institution’s income that can come from federal financial aid below the present threshold of 90%, and the expansion of work-study awards, with greater emphasis placed on increasing service positions[7].

 #2: Race to the Top: College Affordability and Completion

The K-12 version of Race to the Top has led to dramatic policy changes by incentivizing a relatively small amount of money.  Using this successful model, the Obama Administration wants to expand the Race to the Top program to higher education.  The administration’s 2013 proposal included an initial investment of $1 billion that would be disseminated in grants to 5 states.  This policy lever would be used to stem the tide of declining state allocations, which are the “primary driver of tuition increases at public institutions of higher education”[8].  According to the official program description, to be eligible states would have to demonstrate their commitment to college affordability.  Suggested ways to demonstrate their commitment include: measuring and making public the financial returns on education, gathering data on student debt and repayment ratios, and improving alignment of standards between K-12 and higher education.  Ultimately, the higher education version of Race to the Top was never able to get off the ground as the Senate failed to ratify the $1 billion requested in the 2013 budget[9].  This setback, however, does not mean the policy will be forgotten.  As results of the original Race to the Top program are revealed in the coming years the administration may have the momentum necessary to make another run at expanding the program to higher education.

 #3: The Fiscal Cliff

An agreement was reached in the late hours of early January to address the pending Fiscal Cliff, a predetermined time where, if an agreement was not reached, automatic tax hikes and spending cuts would follow.  The agreement was situated firmly around the tax system while discussion over spending was merely delayed two months.  If an agreement is not reached in March, the sequester, or automatic spending cuts, will reduce the budget of most sectors by at least 8%[10] with higher education facing an 8.6% cut[11].  As the Pell Grant Program is exempt from these cuts, a significant portion of the funding would be drawn from higher education research support.  According to Terry W. Hartle, senior vice president for government and public affairs at the American Council for Education, the inability of legislators to reach an agreement would decimate federal research support[12].

 #4: ESEA Reauthorization

It will be interesting to see what happens with NCLB/ESEA. The NCLB waivers are only good through the end of the 2014 school year. Therefore, either another batch of waivers will have to be released, or the law has to be changed. Addressing NCLB/ESEA is something that has long been on the agenda for teachers unions and education professionals, and it will be difficult for the Obama administration to let reauthorization of the law fall by the wayside for another four years. Obama has sidestepped it thus far, but it appears the issue may be ticking towards a major blow up sooner or later. While more waivers or even scaffolding on top of the previous laws is a strong possibility, the most effective practice would be to rewrite and reauthorize the original law. However, with the constant political scuffles in Washington, it is more likely that legislators will use alternate routes.

#5: Changing Demographics

An additional debate will come as the by-product of shifting national demographics. As immigration increases and schools continue to face an actual increase in segregation[13], it will be interesting to watch how the Obama administration addresses the issue, if it even addresses the issue at all. As the standards movement grows and achievement gaps are realized, the issue seems unavoidable and it is anybody’s guess how the Obama administration will react. While civil rights debates have not been the most vocal issue of the administration during the last four years, do not be surprised if the next four years are built around subtle strides towards an attempt to achieve educational equality. The advancements may come in a number of ways, such as: victories in court, non-publicized local laws about charter schools and/or bussing policies, and an increase of educational benefits for immigrants.

Final Thoughts and Predictions

The present state of the federal government is one of gridlock and contentious debate.  Although some progress has been made since the November election, without rapid improvements in the state of our economy, policy that aims at increasing spending and expanding regulations will be difficult to pass.  However, if the economy does significantly rebound the Obama Administration can use their massive investment in education as an illustration of what works and ride some political momentum into the discussions surrounding HEA and ESEA reauthorization.  Since we cannot say with certainty what the future of the economy will be, the following predictions are based on the slow-moving state of the present economy.

First, as the federal government expands regulations to non-profit and public universities, the administration is going to find greater resistance.  The ambiguous and entirely subjective term of “good value” looms over public universities with many fearing that “good value” may be narrowly linked to “gainful employment”[14].  The blurring of the line between for-profit and public universities may tarnish relationships with public employees and officials that previously supported the administration.  The result would be more highly charged discussions surrounding HEA reauthorization and increased likelihood of a stalemate, similar to the lack of progress in ESEA reauthorization.

Second, the president’s commitment to the Pell Grant Program will continue to trump all other policies.  This will become problematic in 2014 when a shortfall of an estimated $30.1 billion is expected to befall the program[15].  With the president’s prize program in jeopardy decisions will be made to maintain the maximum grant[16].  With the interest rates of subsidized student loan rates expected to double in July 2013, the present rate of 3.4% may increase as a compromise is reached moving funds from student loan subsidies to the Pell Grant Program.

Finally, the Obama administration will likely continue to use a variety of political tools to realize its K-12 educational agenda. With the success found in the Race to the Top grant program, the administration has found an effective method to realize widespread educational reform at a reduced federal cost. Expect grant programs to continue. Additionally, while the ESEA reauthorization issue has continued to loom, the Department of Education, as mentioned in the AJE Forum piece “Rise of the ‘Nones’: does education explain the decline in religious affiliation” [17], will likely try to avoid the ESEA/NCLB debate if it can by scaffolding upon the old law. In terms of the debate on civil rights and immigration, expect the onus of desegregation and educational equality to fall on state legislators, but expect a federal incentive (like Race to the Top) to be the carrot for the states to implement new measures to address these issues.