Knowing that the November election would have implications for higher education no matter what the outcome, we arranged a conversation between Jim Day, Vice President and Managing Director of EAB’s Hardwick Day division, and Barmak Nassirian, Director of Federal Relations and Policy Analysis at American Association of State Colleges and Universities (AASCU), about what happens next.
In the wake of Donald Trump’s historic victory, Jim asked Barmak to frame the state of higher education and share his best guesses for what the future might possibly hold in a Trump-revised economy and Department of Education.
Jim Day: It’s been a rough few years for enrollment managers. More than half of schools are seeing shrinking freshman classes from year to year. Despite climbing discount rates, our national student loan debt has soared to its highest level ever and is worse even than credit card debt. So we are in a bad place.
Barmak Nassirian: Yes, and looking at this situation in the context of the government’s role is vital. The FAFSA is a federal construct, and periods of transition can become periods of enormous disruption. We are also, collectively, owners of a trillion-dollar-plus bank in the form of the Federal Direct Loan Program that impacts the lives of 40 million Americans. It needs to be run competently.
JD: What do you think might be in President-elect Trump’s education agenda?
BN: The election of Donald Trump and the GOP’s retention of its majority in both chambers of Congress will break the six-year cycle of policy paralysis in Washington, significantly increasing the probability of new legislation. I suspect the new administration will work to undo a whole series of Obama Administration regulations: teacher preparation, borrower defenses, gainful employment, and the 2010 program-integrity regulations. While deregulation will be relatively easy, the Trump Administration will likely find that “re-regulation” is more arduous and time-consuming.
JD: I agree. Are there executive actions that would, in fact, be pretty simple to change?
BN: Absolutely. President Obama issued Executive Orders—orders from the President directly to his own agencies—and those are reversible literally with the stroke of a pen. So things like Delayed Action on Childhood Arrivals (DACA) and the VA’s Standards of Excellence, for example, can be undone quickly.
JD: What other initiatives do you think are at risk?
BN: Accreditation. It is criticized by both sides. Democrats say it does not promote quality, and Republicans see it as a defense mechanism of the higher ed “cartel” that keeps competition out.
Free college. “Free” is within everybody’s price range, so it was popular on the campaign trail, but nothing will come of it.
Student Aid. Aid will be much more at risk.
Delayed Action on Childhood Arrivals. President Obama provided DACA protections for children of illegal immigrants. Not culpable for their crossing to the US, they currently hold a lawful status. However, these children are in a federal database at the Department of Homeland Security and many Americans share enormous anxiety about the fate of these students.
JD: Related to concerns about immigrant children, many fear the Trump Administration will negatively impact international scholar and student recruitment.
BN: The Trump campaign used a lot of negative rhetoric about immigration, in particular immigration from Muslim countries, and harshly criticized China. The United States must now confront messaging and perception problems abroad where the coverage of the election was very sensational. Countries experiencing high levels of emigration will look to Great Britain, Australia, or Canada, which are seen to be more welcoming.
So, in the short-term there will be turbulence. Longer term, we may see more restrictive visa policies that could have a very real impact on the ability of at least some groups of foreign students to study here.
JD: Do you think the Department of Education will be weighted toward K-12 or higher education?
BN: Most of the money is in higher ed, but most of the focus and visibility goes to K-12. This will hold true in a Trump Administration, I suspect.
JD: Are people on Capitol Hill and in the DOE having any second thoughts about whether student lending should have been federalized?
BN: Bank-based lending is the preferred choice for most in the GOP. But as a matter of social policy, we give student loans to lots of people that no sane banker would ever give credit to—high risk, no collateral. And we lose a lot of money.
Direct lending allows us to cross-subsidize losses with profit in the form of interest payments from people for whom education works out. Those profits not only offset the losses, they fully subsidize all student aid funding, including Pell. If we hand the lending process over to private banks—giving up those profits—we will have a major funding crisis to the tune of sixty or seventy million dollars. So despite all this nostalgic talk about going back to bank lending, I don’t see it happening.