- The Senate Health, Education, Labor and Pensions Committee is taking a step towards reauthorizing the Higher Education Act with a hearing today, which will focus largely on FAFSA simplification. A full draft of the new bill is expected by the end of December.
- Ahead of this announcement, the Committee for Economic Development released 13 recommendations for the new bill, which focus largely on three key areas: fostering innovation, improving affordability, and increasing accountability and transparency in higher education.
- The committee favors full authorization of competency-based education and emphasizes a need for the new bill to be structured in such a way to promote, rather than hinder, a free market and innovation in higher education. Recommendations also touch on how to handle student loans and FAFSA simplification, the idea that colleges should have some "skin in the game," as President Donald Trump has said, on student debt, and the structure of the current accreditation system.
Monica Herk, the committee's vice president of education research, highlighted three of the recommendations in particular for Congress to consider. First, she echoed a proposal to establish Lifetime Learning Accounts, which would replace 529s and similar state-sponsored plans and serve as a singular destination for all grants, scholarships, student loans and family contributions to allow families to see all available funding in one place.
Second, Herk pointed out, student loan portfolios should be managed by the Department of the Treasury, not ED. "It's more in Treasury's DNA than it is in Education's DNA," she said, noting not only the sizable portfolio but the ability of the Treasury to potentially intervene and provide families with more information earlier in the process.
"When a family who has dependents who are about the middle school age, if there could be a nudge" triggered by three years of income to get families thinking about college and suggest how much they should save each year, Herk believes this could have a tremendous impact on access.
However, she said that even though "it makes imminent policy sense," getting Congress to decide to move the portfolio to another agency "becomes more of a political issue, because the committees that oversee Treasury are different than the committees that oversee education."
Herk also emphasized the importance of writing the law "in such a way that it's not blocking innovations." This includes fully authorizing competency-based education, re-examining apprenticeship programs and other education programs, revisiting the provision which says only students at Title IV schools are eligible for federal financial aid, and revamping accreditation to keep everyone accountable. Instead of regional accreditors, she said, the governing bodies should oversee schools with like profiles.
"Right now, small liberal arts universities are reviewed by the same entities that evaluate the major research institutions, and they're totally different business models," she said.