Enrollment Blog

Must-read insights from the latest NAICU annual meeting

By Richard Whiteside

I've attended many meetings during my 48 years as a college enrollment professional. One of the most interesting I’ve ever attended was held last week in the nation’s capital: the National Association of Independent Colleges and Universities' (NAICU) annual meeting.

This year’s conference brought together political leaders, congressional representatives, scholars, and university administrators to address the unusually large number of legislative issues recently impacting higher education. Unfortunately, I believe the outlook is complicated—if not just plain bad—for most who have an interest in higher education. Political loyalties aside, many of the proposed changes to student financial aid policies, along with the just adopted tax reform, will create problems for many in the education community.

Why "tribal" politics are a problem for higher education

It is important to frame these proposals as the conference attendees did—as, perhaps, ramifications of growing social-cultural skepticism about the value of higher education. This skepticism is reinforced by the toxicity of today’s political climate—which the American Enterprise Institute's Norman Ornstein characterized as similar to Tribalism: A state in which anyone who is not a tribe member is the enemy.

It seems higher education is increasingly marginalized by the tribal atmosphere prevalent in contemporary politics, if not already entirely excluded. There are varying degrees of bipartisan negativity toward higher education, including:

  1. Colleges cost too much
  2. Students are drowning in debt
  3. Too few students complete college
  4. Private colleges are elite and wealthy
  5. Colleges indoctrinate conservative students to become liberal
  6. Students aren’t learning anything that will get them a job
  7. Federal student aid drives up tuition
  8. Colleges aren’t accountable
  9. Colleges aren't innovative

These sentiments alarmed me and seem to lend credence to one of the most disturbing comments I heard at NAICU: Larry Sabato of the University of Virginia’s Center for Politics stated "we are in a post-factual era."

Exempting no party or government branch from this criticism, Sabato lamented that facts simply don’t matter very much to elected officials in Washington—a reality that compounds problems for university administrators whose mission is, in part, to value facts and the academic rigor that yields them. It seems that higher education’s importance and messages to Congress may well be devalued, particularly in a tribal culture that renders collaboration and consensus impossible.

A cost of contention: Proposed changes to student financial aid

Despite the somber tone of many NAICU attendees, the conference presentations discussed the complexities of evolving legislative efforts to re-think student financial aid.

Most recently, The House Education and Workforce Committee passed its version of reauthorization for the Higher Education Act (HEA), the PROSPER Act, on December 13, 2017. It has not yet to come to the floor of the full House and there is not a matching bill in the works in the Senate at this time. Among other things, this reauthorization allows Congress to rewrite all of the rules of student aid.

The biggest PROSPER Act change to existing financial aid programs is the complete elimination of interest subsidies (known as Subsidized Students Loans). In the new HEA proposal, interest will start to accrue as soon as loans are made and will be capitalized into the loan principle at the start of loan repayment. Thus, a typical student would owe $3,000 to $5,000 more on day one of loan repayment than they did under the old provisions.

The new HEA proposal also seeks to tie eligibility to Title IV financial aid program eligibility to repayment activity at the program, i.e. major level. Under the provisions, a program will be eligible to participate in Title IV aid programs if at least 45% of the loan holders who left the institution with that major as the last major of record are in "positive repayment status." Positive repayment status is defined as anyone who is not more than 89 days delinquent in their loan repayment obligations.

Like others from higher education, I fear this shift will cause a number of problems. It will likely create record keeping demands which may be impossible for many smaller institutions to accommodate. This new provision may also lead to differential pricing by major, disproportionate enrollment by more affluent students in some majors than others, and create enormous levels of confusion when students want to double major, change majors, use self-designed majors, and/or transfer from one institution and major where they have the bulk of loans to a final institution and major where they have only a small fraction of their loans.

Below is a comparison of current and proposed student financial aid legislation:

Student Financial Aid Legislation: Click to view full chart

Click the image to open the full chart in a new tab.

Click to view full chart: HEA Provisions

Majority of unfavorable higher ed tax provisions were removed

Amid my deep concerns about financial aid changes, I found some relief in the evolution of tax reform efforts. Early versions of the tax reform bill had many provisions that were unfavorable to higher education. As the bill made its way through the Senate, many of the most onerous were removed. These changes represent major victories for higher education and are the direct result of the hard work of a number of professional associations on behalf of colleges and universities.

Yet I feel it is important to note the final bill, while supportive of higher education in many respects, still contained a provision for taxing institutions with larger endowment-to-student ratios. Many see this as a watershed event: Congress is imposing an actual "tax" on those who accept charitable contributions.

An analysis of the differences between the House and Senate versions along with what was finally enacted is presented following:

Higher Education Tax Reforms: Click to view full chartClick the image to open the full chart in a new tab.

Moving beyond zero-sum by priority setting

Despite all the challenges we discussed, I found optimism in the words of a number of speakers, notably Senator Roy Blunt (R) from Missouri.

Sen. Blunt stressed the solution to contentious debates and their negative impact on higher education hinges on the rejection of the zero-sum philosophy of government, wherein winners are created by also creating losers. He called for a thoughtful program of priority setting—a process that he believes will result in the nation coming to understand the full value and public benefit resulting from a uniquely strong higher education system, in which there is a healthy competition between public and private institutions.

Other speakers pointed out that our republic has survived revolution, a civil war, world wars, recessions, and depressions and still recovered from each. I too believe higher education can withstand these challenges, but these potential national-level policy changes bear close scrutiny across this year.

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