I didn’t catch all of the post-election press conferences last week (kind of busy dotting i’s and crossing t’s on college applications and early action CSS Profiles right now). But from everything I did see (and read) it’s abundantly clear that it makes no difference whether Washington leans to the Left or to the Right, Higher Ed remains front and center.
And even though as a general rule I try not to talk too much about politics (OK, this is Jill’s rule), I can’t ignore how a shift in the legislative balance of power inside the Beltway might affect higher education policy a lot closer to home.
So, here are some higher ed highlights from last week’s election results(followed by my take on whether, how and to what extent (if any) I think these changes might have on our lives.
– It is very likely that Senator Lamar Alexander, the current ranking member of the Senate Education Committee, will become its Chairman. Why this might matter…
Sen. Alexander is a former U.S. education secretary and university president. He is well known (at least to people like me) for his positions on federal regulation of colleges (reduce them), on the FAFSA(simplify it) and on the Higher Education Act and the massive regulations it contains that govern federal student aid (dump it and ‘start from scratch’).
– The current administration’s higher education policy initiatives, and in particular, a proposal to tie Federal financial aid funding to a new nationally-based Department of Education-developed college ratings system (an outline of which is expected to be made public in the next few weeks) won’t go very far in the new session. Which is why…
I expect Secretary of Education Arne Duncan to remain in his post (he’s said as much), but many of his department’s positions will likely face more scrutingy. This could include the pressure that’s been applied to for-profit schools to justify their tuition with graduation outcomes, a push to regulate tuition hikes, and potential student loan rate reduction/relief. In their place we might see more emphasis on ROI with an emphasis on rewarding colleges with high graduate employment rates and salary levels commensurate with degree. This last point is already being implemented in Florida, with some controversial results — as in it is overly punitive to schools where a large percentage of its graduates go on to medical or law school or for some other advanced degree.
– Funding caps on academic research and Federal Financial Aid set by the Budget Control Act are likely to remain through the next budget cycle. What this could mean…
With a new budget dynamic in Congress and another round of automatic budget cuts set to take effect in the 2016 fiscal year, Financial Aid advocates are expecting to have to fight to just to keep Federal student aid funding levels for Pell Grants flat.
The first, biggest challenge that the Obama Administration and the new Congress will face is the much changed dynamic in budget negotiations. For Higher Ed, this is a bit of a double edged sword. On the one hand, with sequestation cuts likely to remain in place, there is also an increased likelihood that the Government will roll back much of the federal oversight and regulation in higher ed (which educators generally find burdensome). On the other hand, there is also a very real possibility that funding will be further reduced for academic research and student aid programs such as the Pell Grant, the Supplemental Educational Opportunity Grant and federal work-study.
So, what does this mean for your college-bound student and how will any of this impact your family?
For most middle class families, the answer is: not that much.
That’s because most of the Beltway conversation and nearly all of the Federal-based funding for financial aid programs is ear marked for low-income students. For a student to qualify for a Pell Grant, for example, her parent’s expected family contribution (EFC) must be less than 6000. Fact is Pell Grants (which are the primary source of Federal Financial Aid) are rarely awarded to the middle class. But that’s not as horrible as it may sound. You see, while the Federal Government is the largest single source of need-based financial aid, the lion’s share of grants available for middle class families come from university endowments. In addition to legislated federal aid, colleges and universities award their own need-based grants (and merit/talent based scholarships) to middle class students, which includes families earning up to $250,000 in adjusted gross income. And these amounts may greatly exceed the maximum Pell Grant of $5,645 by 4x or much more. But these awards are very much school dependent… which is why for most of my readers, getting great grants and scholarships has far more to do with where his/her student applies to school than it does with which party is in the majority.
This much I know: College sticker prices will still seem absurdly expensive ‘on paper’ and the $150 billion federal financial aid system will remain largely intact; regardless of which side of the aisle has the most seats. But it’s not the sticker price and Federal Financial aid policy that you need to focus on.
For most middle class families, it’s not what politicians and pundits say about how much college costs … it’s what percent of that cost your family should expect to bear that counts. Institutional endowments aid can neutralize the sticker price for most middle class Americans — by a large margin.
But having success with college finance only happens with proper Admissions planning, and by knowing the rules… both as they relate to properly positioning your finances and your student. In other words, to make college affordable, you need to have an Admissions plan that identifies the right colleges for your family — which are ones that meet your student’s academic and social aspirations and have admissions and financial aid policies that will meet your family’s financial objectives at the outset. And then you have to execute on that plan… well before your student has actually applied and certainly before they’ve been accepted.
To make sure that you maximize your student’s chances at need and merit-based endowment awards, you should have a funding plan in place prior to the end of your student’s junior year – -and ideally beforeJanuary 1st of that year (your financial aid look-back year). If you’re the parent of a college-bound high school student, I’ll be teaching two new College Planning Workshops in January (one in Miami and one in Broward), This class is open to the public,100% free and completely updated for New Year with latest numbers on Admit & Graduation Rates, legislative changes to FL Pre-paid, new higher ed regs and scholarship requirements. I’ll also cover the financial aid formulas, the applications required to be considered, the mistakes parents make when reporting their financials, how students should compile their college lists, why for many families going to a ‘pricey’ private university can cost the same as a ‘less expensive’ public one…and much more.
It’s already November, which means that parents of 11th graders have less than two months to make adjustments to their financials before the look-back year begins… and 12th grade parents are just two months away from being able to file financial aid applications (Jan 1). Institutional awards are often doled out on a first-come; first-served basis.
It also means it’s time for 10th and 11th grade parents to pay very close attention. Once the new year begins, 11th grade parents are “on the clock” – your actions could have implications for eligibility of aid. The best of intentions during your look back period could result in severe, unintended and costly consequences.
I invite you to register for one my free January workshops. I think you’ll be glad you did.