Hurley also cited his concerns about the potentially detrimental polarization within the legislature.
“As we’ve been hearing for a couple of years about increased polarization at the national level, so too might be the case in state political circles,” said Hurley. “Republicans gained 113 legislative seats in the South while Democrats gained 117 seats in the East, so [polarization is] happening at the state level and regionally.”
In the past four years, the Obama administration had pushed forward regulation proposals and provisions regarding the for-profit sector’s practices. Most of the provisions referenced taxpayer and student protections, though multiple “gainful employment” rules were proposed that required for-profit institutions to offer more transparency and data regarding their program’s ability to prepare students to succeed in the job market. Many of these regulation provisions, however, were struck down by a federal court.
“I think [the Obama administration will] probably try to amend those and reapply those,” said Hurley.
AASCU projects that the House Committee on Education and the Workforce will focus heavily on the reauthorization of the Higher Education Act (HEA) that is set to expire at the end of 2013. This represents a slight shift in agenda for the committee, which previously focused mostly on college access and affordability in the 112th Congress.
“As Congress begins to work on [reauthorizing the HEA], its efforts will include a comprehensive review of student financial aid programs, assuring quality in higher education, and boosting measures of student success,” the report said. “Given the focus on college affordability, one key aspect of this debate for public institutions will be on strengthening the current ‘maintenance of effort’ provisions contained in the HEA.”
The AASCU report points out that many higher education issues are hugely dependent on the outcome of the fiscal cliff debates. Proposed changes to both tax policy and appropriations will remain in limbo until a decision is reached. Similarly, the Pell Grant program is expected to face an estimated $5 billion funding shortfall.
“The Pell Grant is exempt from across-the-board cuts, but how the fiscal cliff is addressed will have an impact on the mid-range or long-term sustainability of the Pell Grant program,” said Hurley.
“In fiscal year 2015 and beyond the shortfall is projected to increase significantly,” the report said. “Given the atmosphere in Washington, it will be difficult to secure funds to overcome the shortfall. Discussions of program reform have begun and calls for implementing cost-reducing policy reforms in the program will grow louder in the months ahead.”
The reports clarifies that the recently extended 3.4 percent interest rate on subsidized student loans through mid-2013 will come to a head next June, when the rate will revert back to the 6.8 percent rate paid by borrowers receiving unsubsidized loans.
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