Posts Tagged “Trump administration”

Administration’s Early Moves Stifle Economic Engine of Higher Education

In post-industrial America, the roles played by large nonprofits – especially its hospitals and universities – power the economic engines in many regional economies. What would cities like San Francisco, Philadelphia, Pittsburgh, and Boston look like without their large educational and medical research complexes? Would other cities, such as Houston, Chicago, Los Angeles, Austin, and Washington, DC, be as vibrant without the diversification made possible by these important economic drivers?

The facts are clear. America may – or may not – regain some of its manufacturing capacity, although this re-growth is likely to be infused with a level of technology certain to assure that what develops is not likely to be your grandfather’s auto assembly line. America may develop energy policies that re-open coal mines even as newer, alternative sources of power move forward to increasingly dominate the energy landscape.

But the future of the American economy is to prepare and lead a global economy. The alternative is to be lost in a political quagmire that will lessen America’s impact and influence on the rest of the world.

Whether you like NAFTA or the Trans Pacific Partnership really doesn’t matter in the end. What matters is that the boat has long since sailed on whether we live and work in a global economy. The relevant questions are how will we be transformed by it? And, which countries will lead it?

Higher Education and Medical Research Are Economic Engines

The heart of the post-industrial economy arguably is the education and medical research complexes that fuel our regional economies. From these pulsing economic engines emerge spin-offs created by entrepreneurs who transform – and effectively recreate — the American economy. Together with small business, they shape the direction of American society, often from the ground up.

President Eisenhower once warned Americans about the dangers of the military-industrial complex. It was an important admonition that has continued relevance in a transforming America. Rules and protocols – matched by common sense and good will – must continue to shape the political, cultural, and economic relationships between politics and the economy.

Trump Administration Proposals’ Troubling Impact on Higher Ed

That’s why two of the Trump Administrations proposed policies, in particular, are deeply troubling. It doesn’t matter whether these policies are part of a first-year executive policy and budget request that is likely “dead on arrival.” They show a predisposition by the executive branch that speaks more to ideology than cost.

The first is the much discussed travel ban, part of a larger discussion about the role that immigrants have and will play in the history of the United States. The future of the travel ban will likely be settled by the courts, but there are some early trends that bear close scrutiny.

According to Inside Higher Education (IHE), “Four in ten colleges are seeing drops in applications from international students amid pervasive concerns that the political climate might keep them away.” For many years now, US colleges have benefited from steady increases in applications from international students. As students, they often pay full tuition and fees, providing a valuable revenue stream for these institutions.

Travel Ban Already Hurting International Applications

IHE’s Elizabeth Redden writes, “the highest reported declines involved applications from the Middle East. Thirty-nine percent of universities reported declines in undergraduate applications from the Middle East, while 31 percent reported declines in graduate applications. Fall enrollment numbers from the region will likely be hard hit by President Trump’s executive order.” Higher education officials find similar trends in China and India, which account for nearly half of the international students in the United States.

Do we really want international students to go elsewhere? Shouldn’t the next great innovations in America come from a global workforce educated here that stays here because Americans – whether native born or naturalized – create a climate that encourages and supports global innovation developed by the best and brightest from across the globe?

Trump Budget Proposal Will Stifle Innovation & Growth

The second problematic proposal, the Administration’s budget blueprint, compounds the first. In a statement on the proposed budget, Mary Sue Coleman, president of the American Association of Universities, was blunt: “This budget proposal would cripple American innovation and economic growth. The President’s FY18 budget proposes deep cuts to vital scientific research at the National Institutes of Health, Department of Energy, NASA, NOAA, and other critical scientific agencies.”

Coleman argues that the budget proposal “would lead to a U.S. innovation deficit, as it comes at a time when China and other economic competitors continue their investment surge in research and higher education. For decades, federal investments in these areas have paid enormous dividends in medical advancements, new technologies, and enhanced national security, and helped to produce high-wage American jobs and the most talented workforce in the world.”

If we accept the premise that America’s nonprofit education and medical centers power the economic engines that fuel the most promising contributors to American economic growth, does it make any sense to damage these global institutions, perhaps irreparably?

In the end, it’s not a “guns versus no butter” decision to favor military buildups over domestic discretionary spending. It’s about labor, capital, partnerships, and investment. At its most fundamental, “it’s the economy, stupid.” Let’s not muck it up.

In Higher Education Policy, Facts Matter

One of the striking features of the new presidential administration appears to be the difference between fact and perception. On most levels, it seems that optics matter more than words. It also seems that facts are an afterthought to the positions floated. Further, it looks like many positions shift regularly depending upon how the outcome is likely to play with the American public.

It’s not that outcomes don’t matter; in fact, they do. But words also matter in the end. And facts inform the words that are spoken. Facts are the foundation that opens the dialogue, builds the trust, and sets a policy on which interested parties can agree. Facts aren’t subjective and they can’t be taken too literally. Facts are just facts.

For the moment, those of us who think and write about higher education can’t be certain about what’s coming.

While President-elect Trump has named a Secretary of Education, there’s not really enough to go on yet to forecast an education strategy.

What will be the policies of the Trump Administration? Will they reflect traditional priorities established by Congressional Republicans? Are there likely to be new Executive Branch initiatives?

Is the combination of national higher education associations, policy institutes and think tanks, and campus-based higher education leadership part of the swamp that Mr. Trump promised to drain or are they a resource to which he can turn as an outsider seeking informed opinions?

President-elect Trump has a right to claim some time to set up his shop. We’ll know more soon. We can withhold our powder and wish him well until perceptions become proposals. But it’s a short grace period when the issues are so pressing, consumer dissatisfaction is increasing, and pre-election campaign positions potentially threaten how colleges operate.

Colleges are a microcosm of American society. Almost every action taken will have some effect on them. It’s important to watch and learn.

It is even more critical for state and federal legislators to understand how colleges work and the pressures that they face. The facts always matter.

A recent example demonstrates the danger of creating a quagmire in the so-called “Washington swamp.” US Representative Tom Reed (R-Corning, NY) has reported that he is confronting the college cost crisis and the student loan debt issue through a variety of proposals that he will sponsor and support.

For Congressman Reed, the effort is personal: “I have firsthand experience with this myself having $110,000 worth of student loan debt when I completed my studies . . . Now, with my own daughter being a freshman at the University of Buffalo, this is something I have dealt with personally.”

Congressman Reed is justified to worry about high college tuition sticker prices and rising student debt. He supports the expansion of the Perkins Loan Program and Pell grants, for example, to help families deal with these costs. But many of his proposals suggest that he is not especially well versed about higher education issues that go well beyond legitimate questions about high sticker prices before tuition discounts and where comprehensive student debt originates.

Most troubling are two proposals grouped under what Mr. Reed has developed as a “Vision for Students” platform. The proposed federal legislation has the unfortunate and pejorative title of “Reducing Excessive Debt and Unfair Costs of Education Act.” In this bill, Mr. Reed targets about 90 institutions that have over $1 billion in endowment funds. His proposal would mandate that these endowment funds reduce a student’s tuition by 25 percent. This mandate might be expanded to other institutions as well.

If these colleges and universities failed to provide tuition relief, they would become subject to hefty tax penalties. Further, Rep. Reed’s proposal would require college campuses to submit plans to keep their costs below the rate of inflation. Colleges that failed to comply could lose federal aid.

Let’s set aside the issue of why the federal government that fails to keep its own expenses below the rate of inflation, suffers from growing consumer discontent, and has not modernized its own infrastructure should pick out sectors of the American economy – in this case higher education – for special regulatory treatment.

Instead, let’s look at the facts. There is no particular reason that $1 billion should be a cap for Rep. Reed’s proposals. Colleges and universities differ by purpose, scale in size and operations, and student income levels. A $1 billion cap is meaningless.

Further, endowments are often a collection of donor-restricted funds and not an unrestricted pot of gold that colleges use as discretionary accounts.

Finally, a five percent drawdown annually on a rolling twelve-quarter average will not generate the revenue necessary to support a 25% cut in tuition at most institutions.

In addition, colleges and universities that raise tuition – or allow their tuition discounts to rise beyond the level where net tuition revenue no longer increases – will either adjust to marketplace dynamics, merge, or close. It’s one of those pesky inescapable facts that should guide progressive federal policy.

Higher education is a little like the patient who will not improve if the wrong medicine is prescribed. As a start, it might be better to sit down with higher education’s leadership to ask how higher education works, what efficiencies can be created, and how the state and federal governments can be helpful and knowledgeable partners in a shared need to ensure an educated workforce.