As I wrote last week, President Obama is facing a major uphill battle in persuading Congress to overhaul the inequitable funding formula that the government uses to allocate funds through the federal campus based student aid programs. Lobbyists representing the country’s wealthiest and most prestigious colleges and universities have successfully beaten back all prior efforts to do so, and are gearing up to try and do so again.
But President Obama’s chances appear to be at least somewhat better than those of previous administrations that have tried to reform the campus-based aid programs – Federal Work Study, Perkins Loans, and Supplemental Educational Opportunity Grants (SEOG) – in the past. Here are four reasons why:
- The Influence of New England Senators Over Education Policy has Waned
For more than three decades, the lobbyists and leaders of elite private colleges and public flagship universities have fought off proposals by both Democratic and Republican presidents to phase out colleges’ historical share of campus-based aid funds, or “base guarantees,” and to distribute the funds entirely according to the financial need of the students attending the institutions. Their not-so secret weapon: the New England senators who have long dominated the Senate committee in charge of higher education policy. These senators have been fiercely protective of the traditional colleges in their states – the very same institutions that would likely have the most to lose if the formula is changed.
No senator has fought harder throughout his career to keep the campus-based aid formula in place than did Sen. Edward M. Kennedy, the Massachusetts Democrat who served as either the chairman or the ranking minority member of the Senate Health, Education, Labor and Pensions (HELP) for nearly 30 years.
Democratic Senator Tom Harkin of Iowa is now in charge of the committee and Mike Enzi of Wyoming is the ranking Republican on the panel. Neither of the senators has yet revealed where they stand on this proposal.
- President Obama May Have an Unlikely Ally in this Fight
Eight years ago, House Speaker John Boehner, the Ohio Republican who was the chairman of the House Committee on Education and the Workforce at the time, led the charge to overhaul the campus-based aid formula. In legislation he drafted to reauthorize the Higher Education Act, Boehner proposed phasing out the base guarantees and shifting the money to colleges that enrolled larger shares of low-income students. “Phasing in a ‘fair share’ formula is a responsible way to restore fairness to these programs by targeting funds based on the financial needs of students,” he said at the time.
It’s unclear, of course, whether Boehner, who failed in this pursuit, will be willing to come behind any of Obama’s budget proposals. But this is a rare case in which he and the president appear to see eye to eye.
- President Obama is Bringing Money to the Table
Unlike past efforts to reform campus-based aid, the president’s plan calls for a huge expansion in funding for these programs. Under the proposal, spending on the Perkins Loan program would increase from $1 billion to $8 billion a year. The administration is also proposing to double the number of jobs available through the work study program over the next five years.
In addition, the president’s proposal may offer colleges the last, best chance to save the Perkins Loan program, which is set to expire in 2014. Will college lobbyists and leaders fight as hard to block an effort that would not only keep the Perkins Loan program alive but massively expand it?
- Colleges that Don’t Deserve the Money Won’t Get It
The president’s plan has a fundamentally different aim than prior efforts. In the past, policymakers have focused exclusively on trying to make the campus-based aid funding formula more equitable, by shifting funds away from elite private colleges and public flagship universities to institutions that enroll the largest share of low income students. In contrast, President Obama’s proposal would move funds away from colleges that fail to keep their net prices low and toward institutions that keep their prices down, provide good value to students and their families, and do a good job of enrolling and graduating Pell-eligible students. In other words, institutions would not only have to serve low-income students, but serve them well to benefit from this proposed change.
This shift in emphasis is not only good policy, but it takes away one of the most effective lines of attack that supporters of the status quo have used in the past — that a more equitable funding formula would waste campus-based aid dollars on poorly-performing community colleges and unscrupulous for-profit schools. Under Obama’s plan, only institutions that meet the administration’s high standards will qualify for the aid — no matter in which collegiate sector they belong.
For these reasons, President Obama has got a better shot than his predecessors in changing the funding formula. But he still has a major fight ahead of him, and his victory is anything but assured.