Posts Tagged “Trump administration”
There has always been a historic tension between America’s colleges and universities and the government, whether at the state or federal level. It’s unavoidable. Once the government began to fund students and institutions in the late 20th century, its leaders believed that they had a right and responsibility to oversee the use of those government funds.
Priorities: Protect Funding & Tax-Exempt Status, Fight Excessive Regulation
For most of the national trade associations representing higher education, three goals emerged. The first was to protect the level of state and federal support that higher education received from them. The second was to preserve and safeguard fundamental underpinnings like the tax-exempt status of colleges and universities. And finally, the third was to monitor and argue against excessive regulation.
As government discretionary spending decreased — with debt repayment levels rising and deficit financing the order of the day — state and federal spending became increasingly less stable. Today, America governs at the federal level by Continuing Resolution, careening from one deadline to the next. At the state level, annual budget deadlines are seldom met unless mandated by state law.
In a world of last-minute, lobbyist-infused backroom deals, it’s impossible to plan accurately and consistently on most college campuses. You never quite know how the cards will play out.
In recent years, most in the higher education leadership have worried that, in the absence of discretion, the federal government will turn increasingly to regulation. The Obama years provide numerous examples to justify such concern. Further, the government seems to be in a never-ending dance over the reauthorization of the Higher Education Act, further complicating higher education’s relationship with an important partner.
Trump Policies and Actions Heighten Higher Education’s Sense of Alarm
Since last year’s presidential election, many have slightly shifted their concern about the federal role in government. There seem to be a number of forces at work within the government that have heightened a sense of alarm.
The first is that higher education does not seem to have the champions that it used to in the federal executive and legislative branches.
To illustrate, the passage of the new tax bill was problematic. Two examples show why. Proponents suggested a tax on graduate scholarships that ultimately did not make it into the final draft of the bill. The effect would have been disastrous for graduate and professional education. Second, earlier tax bill drafts called for a tax on the country’s largest endowments, reportedly to encourage better use of endowment spending.
Let’s set aside the obvious question about why a government that cannot govern or budget effectively is a necessary and sufficient monitor of higher education spending. In the end, it is what it is.
Active Effort by Trump Administration to Diminish Higher Education
The second is that there appears to be an active effort – in rhetoric and action — by President Trump and his supporters to diminish the stature of American higher education. Leaders of America’s major research universities have agreed among themselves to take more active public positions in an effort to counter souring public perceptions of higher education. Without a coordinated plan – and the support of their trustees and campus communities – there is likely to be a limit on whether their efforts will work.
Immigration Actions Mean Fewer International Students
The third is that “America first” policies on immigration have a deleterious effect on many colleges and universities. America is the global leader in providing high quality education at any level. It attracts the best and brightest from around the world.
The impact of quota policies – and the impressions created of them and held by international students and their families – diminishes the talent pool within the American workforce. It also decreases foreign tuition payments, the ability to sustain a global campus, and the intellectual exchanges necessary to keep the next great ideas coming.
In an American workforce approaching full employment, the need for more workers – and the best educated among them graduating from American colleges and universities – will be a growing problem if a strong economy holds.
These shifting concerns suggest a growing need to be aware of shifting emphases in the relationship between higher education and the government. They raise legitimate questions:
- Will the government at the state and federal levels continue to be a steady, reliable and consistent funder of higher education?
- Does the government still see higher education as integral to its sense of commonwealth?
- Lacking discretion, will the government turn to a stringent regulatory environment to enforce its political goals, however inconsistent they appear to be?
Higher education would be well advised to have clear policy goals as we move forward. It must also look for ways to work with Congress and the Trump Administration to safeguard and advance its goals.
But the days of concerns over money, taxes, and regulation levels are gone. While we can hope for the best, the willingness of the president to use executive action to change the regulatory environment is something that we are free to ignore at our own peril.
It’s hard to imagine how deeply the policies of the Trump Administration will affect America’s colleges and universities. As a group, these institutions are already undergoing substantial disruption.
The old financial models under which most of higher education operate no longer work. The current path for many of them is not sustainable. Many institutions face rising costs, deeper financial aid discounts, and dismal demographics.
From Taxes to Immigration, Federal Policies are Hammering Higher Ed
This is a time when enlightened state and federal policy could make an important difference, resetting the balance that would offer breathing space for colleges trying to handle disruption. Policies could even provide new opportunities for the most innovative institutions, those who are using disruption to become more sustainable over the long term.
Drawn from different arenas, four policy directions illustrate how the wrong federal initiatives can wreak havoc on the American educational community.
Federal immigration policy: Immigration changes, proposed or underway, have two important and debilitating effects on American higher education. First, the drop in foreign student applications cuts off a supply of the “best and brightest” global students into American universities. On a graduate and professional level, such policies diminish the pool of qualified professionals who add diversity and depth to the applicant base and form a pool of potential subsequent hires. Fewer international students decreases the revenue available to colleges and universities whose financial models depend on full-pay students to offset the deep financial aid discounting now heavily practiced on most campuses.
Tax on endowments: On its surface, the proposed tax on endowments may seem noble. Federal officials want to make the money more available to offset high tuition sticker prices by forcing the wealthiest colleges and universities to increase scholarships to students. The problem is, of course, that many of these institutions already have the most enlightened and generous financial aid policies. An endowment tax would penalize these schools for being successful at using fundraising and endowment investments to support their existing scholarship aid and funding the resources and offerings that make them such attractive institutions.
The argument makes no sense. Generally, an endowment must make some amount above its annual spend down and the rate of inflation in order to grow at a reasonable speed — perhaps somewhere around seven percent today.
What happens in the years when the endowment returns falls below the break-even rate as it has most years recently (and sometimes quite dramatically)? Further, what is the incentive for colleges and universities to build their endowments with private support to a point where they subject their efforts to additional federal taxes?
Finally, how much would the proposed endowment tax actually contribute back to the U.S. Treasury? Is it deficit reduction or politics at play? It’s not so much that 50-100 colleges are affected — out of about 4,700 schools nationwide — it’s more a question of why? Is the endowment tax an example of government policy determined by anecdote and polling?
Tax on graduate tuition waivers: Does it make any sense to tax scholarship money? If not, then why does the Republicans’ proposed tax bill include a tax on graduate tuition waivers? Much of the existing student debt about which politicians complain is acquired when students earn graduate and professional degrees. Why increase their debt burdens?
Elimination of tax deduction for interest on student loans: Under the current tax code, students save as much as $2,500 annually via the deduction on student loan interest. While only the House tax proposal contained this provision, there is always a danger that mischief can occur in conference deliberations. Politicians on both sides of the aisle have identified student debt burdens as an area of significant and growing economic concern. Why pass legislation that will make the situation worse?
In previous years’ tax and higher education funding bills, colleges and universities worried about the level of funding for student grants and loans like the Pell Grant and the Perkins Loan Program. They diligently watched any effort to impinge on their tax-exempt status. And they took active positions on issues of daily concerns, like the burden of state and federal regulations.
But this year’s legislative proposals are substantively different. Federal policies are beginning to intrude into who and how we educate our students, where we draw our students from, and how colleges can continue to make themselves affordable.
It has long been assumed that given declining discretionary ability, the federal government would increasingly turn to regulation to enforce its policies. But now, the efforts seem more directed at reshaping our cultural environment through policies that cut across race, nationality, and wealth.
College and university leaders need to watch the tax bill’s conference deliberations closely. It’s a confusing and troubling time as we watch politics, money, and cultural preferences collide in the name of tax reform.
On June 1, President Trump announced that he was taking the United States out of the Paris Climate Accord, making the U.S., Syria, and Nicaragua (which felt the deal was not sufficiently ambitious), the only nations not to support the agreement.
The Paris Agreement sets a series of goals and is voluntary by design. Its value principally is that the agreement got everyone to the table to work on a pressing global issue that crossed national boundaries and directly impacted the quality of life on the planet.
Predictably, there has been a sharp reaction on both sides. Mr. Trump’s critics object to the use of discredited “doomsday” data to justify the American exit. His supporters argue that it was a job-killing “bad deal.” When asked the generic question about whether they were concerned about climate change, over 70 percent of Americans believe that it is a challenge that Americans must face. But differences in opinion emerge as the implications for the American consumer and taxpayer become clearer.
Higher Ed’s First Climate Leadership Conference was 10 Years Ago
The leadership in American higher education has taken a stand on climate commitment for more than ten years. The American College & University Presidents’ Climate Commitment (ACUPCC) emerged when a group of presidents meeting at Arizona State University sent a letter to almost 400 of their colleagues to join them. By June 2007, the ACUPCC, with a signatory group of 284 higher education leaders, went public with the first Climate Leadership Conference. By 2010, there were 697 higher education institutions in all 50 states and the District of Columbia as signatories. Collectively, they represented 5.6 million students.
Higher Education Leaders Encouraged Support of Initiatives to Battle Climate Change
In December 2016, as the transition of national political power began, 235 senior leaders in higher education sent a letter to the new Congressional delegation and incoming presidential transition team. They asked that the Trump Administration continue to support the Paris Agreement, encouraged research based on leading scientific and technical knowledge, and petitioned the Trump Administration to make investments in a low carbon economy.
In letter to Congressional and executive leadership, these college and university leaders noted that they prepare graduates for the American workforce and that their institutions led the country in innovative and ongoing research to address climate challenges, pledging to work with the new administration to meet them.
Decision to Exit Paris Accord is Global Teachable Moment, Beyond Politics
Mr. Trump’s decision to abandon the Paris Agreement moves the discussion to a new stage. The question that higher education leadership must now address is what to do next. It’s an ethics and morals question that will likely also emerge as a global teachable moment for America’s colleges and universities.
Whatever the next step, higher education now has an opportunity to align with an issue of global importance rather than a policy emerging from a political platform promise. In fact, the opportunity is so large and significant that whatever higher education puts forward will move immediately beyond politics.
It is also, therefore, the perfect opportunity for higher education leadership to regain some ground as a leading voice of moral authority as America’s bedrock institutions like higher education continue to come under fire and diminish in reputation.
America’s higher education leaders must have the courage to lead. And they must be strategic in how, when, and where they exercise this leadership. Colleges and universities must not become centers of unfocused, if well meaning, protest. Yet they must vigorously protect the First Amendment rights of their stakeholders, including the right to protest.
That having been said, the optics must show that colleges and universities are the sane and reasonable centers of rational thinking about the impact that climate shifts will have on global society. They must be the “go to” authoritative source that will dampen nationalist efforts to ignore global challenges for political gain.
In American society, colleges and universities are the conduit through which society passes on its history, traditions, challenges, and aspirations. They are where theories are tested and research is undertaken.
The outlandish efforts to deny climate change must be met with ongoing advanced research that supports the efforts by the American educational community to act responsibly and globally. Whatever the action that emerges to Mr. Trump’s decision, it has to be more than a political response. The federal government is now too dysfunctional to operate effectively to address higher education’s concerns on climate.
As Economic Engine, Higher Ed Can Join Cities & States in Battling Climate Change
Higher education needs a game plan on climate change. A good opening step may be to align the higher education message on climate change with local and state authorities. If the states work together to develop a kind of alternative national policy on climate change – even if only temporarily – then colleges and universities might be able to use their moral influence and capacity as economic engines to work with regional economies to offset the worst excesses of the abandonment of the Paris Agreement.
At least it’s a start. At best it may be a pathway to a sane and seasoned approach to addressing a global problem.
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.
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.
