Sept. 19, 2005

Few Funds for Higher Education

The federal government’s vision of how to provide relief in the wake of Hurricane Katrina began to take shape on Friday, with various government agencies and members of Congress unveiling proposals for responding to the natural disaster.

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In general, college officials and some of their supporters on Capitol Hill were unhappy with the initial flurry of proposals related to higher education, which they perceived as inadequate to the needs of evacuated students and of institutions in the Gulf Coast region and those that have enrolled the affected students. But some college lobbyists also counseled patience, noting that the process is just getting under way.

Crises like Katrina tend to provoke a frenzied flurry of policy making (with not a little politicking mixed in), compressing into hours and days what at its best is a deliberative process of weeks and months, in which lawmakers and government officials collect ideas and then carefully craft legislation to fix a perceived problem.

The overwhelming needs in New Orleans and the public perception that the government responded too slowly in the storm’s aftermath have put enormous pressure on Congress and the Bush administration to quickly put together a massive package of aid — and fast. It promises to be a messy, confusing process, layered with great uncertainty about where the money to pay for it will come from, given the country’s already large budget deficits.

Unfortunately for college officials, the needs caused by Katrina are many, and from the initial proposals offered by the Bush administration and leaders in Congress, the perceived urgency of the needs of colleges and students don’t rate particularly high, even compared to those of elementary and secondary education.

Thursday night, Sens. Michael B. Enzi (R-Wyo.) and Edward M. Kennedy (D-Mass.) introduced legislation (S 1715) that would give Education Department officials broad powers to waive rules that require colleges and students to repay federal financial aid funds that they’ve received and make a range of other regulatory changes that would ease many potential financial aid penalties on students and colleges alike.

But the proposed legislation from Enzi and Kennedy, who are the top Republican and Democrat, respectively, on the Senate Committee on Health, Education, Labor and Pensions, would provide nothing in the way of direct payments to colleges or students, which higher education associations have sought, including money to rebuild the infrastructure of damaged colleges and to make up for their lost revenue, extra financial aid for students and families who attended the closed institutions, and funds for institutions that have taken in evacuated students to help defray those costs.

On Friday, Education Secretary Margaret Spellings announced the Bush administration’s own package of $2.6 billion in education-related Katrina relief, the vast majority of which was aimed at rebuilding elementary and secondary schools and (controversially) covering most of the costs for displaced families to send their children to private schools.

Spellings said that the $227 million that the administration would provide for higher education included about $100 million in federal financial aid already distributed to closed colleges and students at those institutions that the government would allow the affected institutions and aid recipients to keep. The Education Department also said it would provide $1,000 per student to colleges and universities that had taken in students displaced by Katrina, “to help meet the unexpected costs” of educating those students.

Lastly, the administration said it would forgive six months of interest on all student loans for borrowers in the severely affected areas of Alabama, Louisiana and Mississippi.

Several college lobbyists complained about the comparative dearth of funds for higher education, and their supporters in Congress expressed their concerns, as well. Rep. George Miller of California, the top Democrat on the House of Representatives education committee, questioned whether the administration’s proposal “adequately addresses the critical need to help impacted colleges retain and recruit students and faculty to their institutions. Institutions of higher education play a critical role in strengthening the Gulf Coast economy. If these colleges are unable to re-open their doors, the area economy will suffer.”

Miller noted, as college officials have emphasized, that funds from the Federal Emergency Management Agency, which has already committed tens of billions of dollars to rebuild businesses in the Gulf region, are restricted from going to nonprofit institutions.

As some of his colleagues fumed over the Senate and administration proposals, higher education’s top lobbyist, Terry W. Hartle, senior vice president for public and government affairs at the American Council on Education, struck a more cautious pose. Higher education has huge financial needs in a range of areas, “and we would all like to see every bit of that [money] right now, but that’s unrealistic,” Hartle said.

“This is the start of a process, and while we’re not happy with what we’ve seen so far, this is going to take some time, and we need to be patient as these press releases are turned into a broad legislative package.”

That process is expected to unfold over the next few days, and as it does, college officials and others will be watching to see how it intersects with Congress’s consideration of the Higher Education Act and the federal budget reconciliation process, amid concerns that some lawmakers might seek to use savings from the Higher Education Act to pay for Katrina relief.

It is not clear how the Katrina situation will affect the possible enactment of the Higher Education Act this year, but it is almost certain to slow it down. With that in mind, Congress is expected this week to consider legislation that will extend the higher education law, which is due to expire September 30, until March 31, 2006. Without such an extension, the federal loan programs would be endangered because lenders would not be assured of receiving payments for loans they guarantee.

— Doug Lederman

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