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A Degree of Risk

Deseret News

September 18, 2023

Higher education policy has gone from a niche issue studied by wonks and practitioners to a point of mainstream political concern. I used to wait with bated breath for a national political figure to mention the issue I care so much about, celebrating even a banal reference to maintaining a competitive workforce. I longed for the political engagement that could facilitate changes to our higher education system that are necessary and overdue: making college less risky for students, holding colleges and universities to a higher standard and reining in the out-of-control cost to taxpayers.

Be careful what you wish for. Now I cringe daily to see higher education policy on the front pages of newspapers — almost always lacking nuance and being used as a political chip. Instead of bringing about necessary change, the attention to higher education has only brought flashy, faux solutions that sound good on the campaign trail but fail to address the core challenges and often exacerbate them.

The 2020 Democratic presidential primary was the first time that ambitious higher education policy reform seemed to play a meaningful role in a national race. Almost all mainstream candidates committed to either making college totally or partially cost-free for students. Prior to this, mentions of higher education were bland and both major parties’ platforms were difficult to distinguish at the level of electoral politics. A brief survey of both parties’ 2016 platforms shows us that Democrats and Republicans were united in their concern about rising college costs, but by no means was this an animating issue for either party’s electoral pitches. When it came to proposed solutions, both platforms fell short. Of course, there was substantive disagreement on nuanced issues between wonks of different political persuasions. But these discussions rarely reached voters, and swayed few votes.

Nonetheless, a hint of what was to come could be found in the Democrats’ 2016 platform. In it, the party committed to making a university education debt-free, and community college completely free. In 2020, as higher education came into focus as a larger issue for more and more voters, Democrats dug in. What has resulted is truly unfortunate: Democrats continue to make grand promises to voters — vowing to forgive student debt, subsidize every American’s college education, and more — that sound good to voters but lack the nuance to address the real challenges we face. An honest conversation about higher education ought to be about policy, not about politics and buying votes.

Republicans are guilty of this politicization as well, but in smaller doses. The anti-diversity, equity and inclusion movement seems keener on capturing the hearts of Republican voters who are fed up with “woke” culture than it is about solving real problems in higher education. This movement, too, was foreshadowed in the Republicans’ 2016 platform, which cited ideological capture of institutions of higher education as an issue that they vowed to address. Like the Democrats, Republicans were also short on practical solutions.

The problem with all of this is that even though higher education has now become a mainstream issue, we’re farther from real solutions than ever before. It would be helpful for us to reframe the conversation, so that we can translate genuine concern about higher education into workable solutions that benefit students and address the core issues our system faces.

Education after high school is a critical mechanism for social mobility, and the government has an obligation to make sure that it works well. If our government cannot ensure that our higher education system functions well, it’s difficult to rationalize the distinct absence of safety nets in our economy relative to other developed nations. Our politics must deal with the structural issues facing higher education in order to live up to its duties and obligations to everyday Americans.

The problem that needs solving is twofold. 

First, going to and paying for college is risky. On average college is a great investment, but sometimes it can leave students worse off financially than when they started. Additionally, the current system of financing is creating a tremendous fiscal burden on taxpayers, and recent and pending reforms are set to make this problem radically worse in the years to come. Second, the common denominator is failing institutions. When colleges and universities fail to deliver students into economic opportunity, they are failing the students and the taxpayers. Yet, they are left seemingly unaccountable for their deficiencies.

So, where are both parties today on these issues?

Democrats seemed to broadly adopt the notion of “free college” and student loan cancellation (in some form) in the run-up to the 2020 election cycle.

Interestingly, President Joe Biden was the most moderate among mainstream Democrats, expressing concern about the fairness of student loan cancellation. He ultimately limited his platform to include up to $10,000 in student loan cancellation (compared to $50,000 by Massachusetts Sen. Elizabeth Warren) and free community college (which sounds dramatic but represents only a small shift from the status quo, since the average net cost for students attending community colleges — that is, the price after taking into account grants and scholarships — is already free.

When Biden took office, all were eagerly awaiting his move to cancel student debt. He didn’t move on that immediately, though. Biden announced his plan during the summer of 2022, and rather than seeking legislative approval, he chose to pursue debt cancellation through unilateral executive action. Congressional action would have been possible if Democrats were on board at the outset of his administration when they controlled the White House and both houses of Congress. But they could not forge a united front to pass debt cancellation through the budget reconciliation process as too many moderate Democrats opposed the plan.

Biden’s plan was carefully crafted to avoid legal challenges, excluding borrowers that would create the obvious harm needed for someone to sue the administration. Arguing that the secretary of education was granted the power to forgive student loans in the case of a national emergency under the HEROES Act — passed originally to enable 9/11 survivors to receive debt forgiveness — the administration apparently believed that they had found a loophole that enabled them to bypass Congress. Most legal experts nonetheless saw this move for what it was: unconstitutional, and unlikely to survive a legal challenge.

In the end, a lawsuit did succeed in stopping the effort. In late June, the Supreme Court ruled that the president did not have the authority to unilaterally cancel student debt in Biden v. Nebraska. “Our precedent — old and new — requires that Congress speak clearly before a department secretary can unilaterally alter large sections of the American economy,” said Chief Justice John Roberts in the majority opinion.

Despite the defeat, Biden has doubled down on his promise to cancel student debt. This time he is attempting to accomplish it using another legally dubious pathway of executive order under the Higher Education Act. At the same time, the administration will move forward with a separate plan to expand income-driven repayment, or IDR, plans so that most borrowers will only pay back a small share of what they have borrowed, if anything at all. As my colleague at the American Enterprise Institute, Nat Malkus, has argued, Biden’s IDR reforms would ostensibly transform a loan repayment program into a grant program. Both of these proposals from Biden would do little to address the core structural problems facing higher education today. In fact, they may well accelerate existing trends.

Meanwhile, Republicans are getting much more serious about higher education reform. While they could have been accused of sitting on the bench in the past — or simply playing politics — a recent flurry of activity on the Hill shows a serious commitment to sensible reform that focuses both on reining in public expenditure and making higher education work better for students.

Legislation introduced by Sen. Bill Cassidy, R-La., would increase transparency in the process of shopping and paying for college education, constrain borrowing for graduate school to affordable levels, and implement sensible changes to the system of accountability for colleges and universities. Another bill introduced by Reps. Virginia Foxx, R-N.C., Burgess Owens, R-Utah, and Lisa McClain, R-Mich., would make sure that borrowers who need help can get it, and streamlines the nine different repayment programs that provide means-tested relief to borrowers who are truly struggling.

Regardless of who controls Congress and the White House, reforms need to be made in line with a few commonsense core principles.

First, we must be united in making college less risky by ensuring that there is a safety net for borrowers who find themselves facing truly unaffordable loans. For those who truly cannot pay back their loans in full — those who are struggling under the burden of mountains of growing debt — there ought to be real support for them. No matter how great we make our higher education system, there will inevitably be those who are left behind. And they deserve our support.

Second, we must ensure that colleges are on the hook for delivering economic opportunity. When graduates can’t find jobs that pay well enough to afford the price tag of enrollment, we should stop allowing students to borrow and use grants to attend that school or program of study. We must hold institutions of higher learning accountable for the quality and outcomes of their degrees and certifications. Higher education is one of the greatest vehicles for socioeconomic opportunity our nation has, and we cannot afford to allow it to become derelict in its duty.

Taxpayers are continually subsidizing tens of thousands of programs that seem to offer no financial return to their students. A recent study estimates that almost one-third of bachelor’s degree programs yield a negative return on investment, meaning that students are left worse off financially for having paid tuition and earning their degree. That’s untenable.

So far, we’ve given colleges a pass, allowing them to raise prices at a pace that exceeds inflation, have little to no responsibility for the financial well-being of their students, and celebrate college degrees in the public discourse as if they were a golden ticket to the American dream. It’s time for that gravy train to end.

Lastly, people who can afford to pay their student loans need to pay their student loans. Having a self-pay system of higher education finance means that prospective students are consumers, and when people pay with their own money, they are savvy. They demand that colleges charge a reasonable price. They demand quality. When someone else is paying, they become less interested in the details, and there is less pressure on institutions of higher learning to perform. Discipline from the market can keep value high and prices low, ensuring that public dollars spent on education will go the furthest possible.

What’s important is that legislators on both sides of the aisle channel well-deserved voter focus on our nation’s higher education system toward pragmatic reforms that fix the core issues we face, rather than on politically popular but misguided quixotic schemes.