Higher Ed Act Reauthorization

Committee on higher ed accreditation composing its final report

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Federal panel appears to have rejected idea of decoupling accreditation and financial aid eligibility, favoring less-dramatic changes to quality assurance system.

Time for a Wartime Higher Ed Tax Policy


Memorandum to:
The Honorable Max Baucus (D-Mont.), Chair
The Honorable Charles Grassley (R-Iowa), Ranking Member
U.S. Senate Committee on Finance

Wartime Higher Ed Tax Policy:
Make Increased Student Aid Revenue Neutral


Perhaps it’s time for the nation to admit we are at war and to act accordingly. The immense Iraq war spending is the answer, not the obstacle, to helping millions of low-income students attend and finish college now. Via tax policy for donations and endowments alone, our nation allocates $18 billion in benefits to higher education. In a commendable bipartisan spirit, the Senate, this year and last, has moved to reallocate billions in federal funds for student-loan subsidies from banks to students. The Tax Code offers the same opportunity.

Executive Summary:

  1. Until the end of the Iraq war, eliminate tax deductions for new campus construction. Institutions are free to raise money and build away. I am only shifting the tax policy. How can we reconcile tax-deducted student centers with U.S. troops, the same age as college students, in Afghanistan and Iraq sleeping outdoors and eating meals out of plastic MRE bags? And being shot at.
  2. As evidence that I am for education, make donations to endow need-based scholarships for families with income under $50,000 tax deductible at a rate of 115 percent. Allow those endowing whole scholarships to write off the gift as fast as their income permits. Now, the write-off is at least three years. Donations to endow scholarships create funding in perpetuity. Buildings only create ever-increasing operating expenses in perpetuity.
  3. No tax deductions for any donations to institutions spending less than 5 percent of endowment income for student aid, not capital costs. The National Association of College and University Business Officers, NACUBO, reports an average endowment return of 10.7 percent. Note: I am not proposing federal mandates on endowment spending. My point is wartime tax policy. Yale had a 22.9 percent endowment increase, to $18 billion, for 2006; for this fiscal year Yale will spend 3.8 percent of the endowment; Yale has launched a $3 billion fund raising campaign; and Yale raised tuition and fees 4.5 percent to $43,050. Why the tax breaks in wartime?
  4. No tax deductions to institutions with endowments greater than $250,000 per student that raise tuition or fees. My own Williams College, for example, has an endowment of $750,000 per student, just raised $400 million more, raised tuition by 5.9 percent, all while using tax-deducted dollars to tear down a sound student center and build a new one. I don’t propose seizing funds, only shifting future federal focus to low-income students for as long as Iraq War spending constrains funds for social programs.
  5. Ask the federal Office of Management and Budget (OMB) to fast track proposals for formulas that would determine institutional tax status as a function of enrollment, endowment per student, percentage of full Pells, application of Work Study funds, and need-based scholarship aid. National tax policies for individuals and corporations derive from wealth and income. Why not for colleges and universities? Too complicated? Well, consider higher education and federal sponsored research. I have heard no complaints about the 35,000-word, 123-page Federal Office of Management and Budget Circular A-21, which governs formulas for research funding. Higher education wades through this play book without complaint each year for the $27 billion in federal research dollars.
  6. Save time in the public hearings and invite to testify only the chairs of the trustees of colleges and universities. The trade groups protect the presidents, and the presidents, many my heroes for what they must endure, take the public hits for their trustees. Lobbyists and presidents can’t give you straight answers. What’s the fun of subpoena power if you are just going to talk with lobbyists?
  7. Reclaim your Constitutional responsibilities over federal spending. Columbia University, Cornell, Yale and other colleges and universities have multi-billion-dollar fund raising campaigns under way. These, in turn, cause billions in forgone federal tax revenues. College and university trustees, elected by no one, then, are making decisions about billions in federal spending. Why is your Finance Committee ceding this responsibility to college and university trustees?

Discussion, Exhibits and Photographs

No, I do not propose wholesale plunder of higher education. My lunatic premise is that this $18-billion subsidy is a public good, a public trust. The $18 billion are not funds owned by colleges and universities. The $18 billion are resources that we, the people, allocated to higher education. If national circumstances change, we can review the allocation. What higher national priority can our nation have than helping students through college?

Dining at Harvard.


The Finance Committee must revise higher education tax policy to recognize wartime spending without further denying access to millions of low-income students. Reallocation of even $1 billion could create 240,000 new Pell Grants for students deciding today between groceries and books.

Your inquiry to Treasury Secretary Paulson to review college and university tax status in light of high institutional salaries and increasing student need is way too narrow. The Finance Committee can create wartime tax policies that free up funds and narrow the nation’s focus to educating low-income students.

Dining in Iraq. For more images, click here (YouTube video) or here (PowerPoint).


Higher education federal tax policy discriminates against low-income students. Our one-size-fits-all policy treats the poorest colleges the same as mighty Harvard with its $30-billion endowment. Is this fair?

In your Iowa, Senator Grassley, Grinnell College has an endowment of more than $1 million per student and revenues totaling 181 percent of expenses. Senator Baucus, for your alma mater, Stanford University, recent reported revenues were $4.5 billion with expenses of $2.6 billion, for a surplus of $1.9 billion. Stanford undergraduate tuition and fees this fall are $45,608, up 5.17 percent, and Stanford is boasting about another surplus. Grinnell -- $1 million endowment per student remember – will charge $42,422 this fall. Shifting tax policies is not seizing assets from colleges and universities. It’s deferring gratification until the troops are home. During wartime, do these institutions, however well managed, need tax benefits for gyms and student lounges and golf nets at the expense of single mothers who can’t qualify for any Pell Grant at all?

The duchies of Dupont Circle trade associations and the higher education lobbies will howl. Invite those who disagree to make their case on television in your stately Dirksen 215 committee room. Let them make their complaints eyeball to eyeball to a panel of wounded Iraq soldiers and veterans, and a few community-college students holding two or three jobs just to go to school part time.

Every year in a special section on executive compensation, The Chronicle of Higher Education also includes institutional revenues and expenses. See for yourselves below. Ask your staff to run the numbers on the federal Integrated Postsecondary Education Data System (IPEDS). This list goes on. Let these institutions raise and spend money as they wish. In wartime, why the tax breaks at the expense of low-income students?

Higher Education Positive Cash Flow Numbers      
  Revenue (000s) Expenses (000s) Profit (000s) Profit as %
of revenues
Ratio of revenues to expenses
Grinnell $165,000 $91,000 $74,000 44.8% 181%
Stanford $4,500,000 $2,600,000 1,900,000 42.2% 173%
Yale $3,400,000 $1,900,000 1,500,000 44.1% 179%
Harvard $5,000,000 $2,800,000 2,200,000 44.0% 179%
Princeton $1,900,000 $1,000,000 900,000 47.4% 190%
Williams $242,000 $160,000 82,000 33.9% 151%
Amherst $257,000 $133,000 124,000 48.2% 193%
Cornell $2,500,000 $2,100,000 400,000 16.0% 119%
Brown $776,000 $621,000 155,000 20.0% 125%

Source: Revenue and expense totals from IRS tax forms, via The Chronicle of Higher Education, November 2006


I calculate my $18 billion per year by the forgone revenue to the U.S. Treasury at a 30 percent tax rate for the $28 billion in tax-deductible donations and the tax-free income on $300 billion in endowments. Reasonable analysts may derive different numbers. None can dispute that even at the scale of federal budgeting, real money is at stake.

Your Finance Committee colleague, Sen. John Kerry, when he visited our class at Bunker Hill Community College, noted that proposed tax breaks for students and families are expensive, given the funding needed to finance the Iraq war. I have considered how to address the concern. Aren’t the proposed breaks expensive if they are in addition to the current tax policy? Modest, reasonable tax-policy adjustments, for the duration of the Iraq War, can increase desperately needed federal aid to low-income students facing soaring tuitions without breaking the Iraq-strapped Treasury.

On spending, remember, Senators, that Article 1, Section 8 of the U.S. Constitution provides to Congress, not university trustees, the “Power To lay and collect Taxes, Duties, Imports and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.” My Constitutional reading, constructionist or liberal, finds no spending power granted to college and university trustees.

For the hearings, when higher education piles in to tell you the U.S. economy will crumble with any shift in tax policy, do swear in the witnesses, for form if not for necessity. The trustees set the fiscal decisions. Invite, for example, Burton McMurtry, the chair at Stanford, Nordahl Bruce from Grinnell, James Houghton from Harvard, Jide Zeitlin from Amherst, Robert Lipp from Williams, Stephen Oxman from Princeton, Thomas Tisch from Brown, and Stanley Gold from University of Southern California. Your ambrosial lagniappe for this hearing, Senators, is the Senior Fellow of the Yale Corporation, Roland Betts, lifelong friend of President Bush. The Michael Brown or the Socrates of education? Trustees are the people to explain to Iraq and Afghanistan veterans and to community college students why a tax deduction for a fitness center is more important than more Pell Grants. Let these chairs explain why all the tax policies should stand when the total G.I. Bill benefits of $50,000 wouldn’t pay for a single year, including books, pocket money, and travel, at their colleges, let alone four years.

This column began gathering in my mind on Sunday of Memorial Day Weekend. That afternoon my friend Rich Morales telephoned from Dulles Airport. Rich, a U.S. Army Colonel, and his wife were leaving for Germany. From there, Rich would leave for his fifth combat tour in the Mideast since Gulf I. Rich, a graduate of West Point and Yale and a White House Fellow, has a three-year tour commanding a 600-soldier tank battalion.

U.S. higher education leaders will scoff at any policies that curtail their ability to spend money. These leaders believe the U.S. has the finest higher education system in the world. We end-users of this great education, though, are not doing well by the world -- pollution, poverty, and war thrive. What does that say about the work of U.S. colleges and universities? Why, for example, is Rich returning to Iraq?

Wick Sloane
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Wick Sloane’s column, The Devil’s Workshop, appears as needed. He was recently awarded a fellowship from the Hechinger Institute on Education and the Media to write about community college finance and equity issues.

Swiftboating Higher Education on P2P

Remember Ronald Reagan? During the primary campaign in 1980 and later his presidential debates with Jimmy Carter, Reagan would offer an admonishing “there you go again” whenever his opponents made statement he deemed to misrepresent his positions.

Clearly we need someone to offer a very public, very stern, and clearly admonishing “there you go again” to Cary Sherman of the Recording Industry Association of American and Dan Glickman, the former Congressman and cabinet secretary who now serves as president of the Motion Picture Association of America. Sherman and Glickman, along with the MPAA and RIAA, have successfully “swiftboated” higher education on the issue of P2P – the illegal downloading, “peer to peer,” of digital content. They have continually and successfully portrayed college students as digital pirates and campus officials as unconcerned about and unresponsive to the use of campus networks for the illegal P2P downloading of copyrighted content, specifically movies and music.

Of course, ample data clearly indicate that illegal P2P downloading is a really consumer market problem, not limited to college students and college campuses. For example, college students accounted for less than 4 percent of the more than 8,400 John Doe lawsuits for illegal P2P downloading filed by the RIAA in 2004-25. Data from my annual Campus Computing Survey confirm that the vast majority of colleges and universities have campus policies to address illegal P2P and to inform students about appropriate use issues related to their access to and activities on campus networks. Moreover, colleges and universities are far more conscientious and concerned about illegal P2P activity than are the consumer broadband providers such as AT&T, Comcast, Earthlink, and TimeWarner, that, at times, implicitly promote P2P downloading as a reason to upgrade to higher speed consumer broadband services.

The latest episode in the MPAA/RIAA swiftboat campaign on P2P unfolded on November 9, via the long awaited legislation to reauthorize the Higher Education Act of 1965. Buried in the legislation, now called “The College Opportunity and Affordability Act of 2007,” are Congressional mandates on illegal P2P activity that take dead aim at colleges and universities.

Section 494 of the bill (on page 411 of the 747 page document) offers provisions to address “Campus-Based Digital Piracy.” In current format, the bill would require any college or university participating in federal student financial aid programs -- meaning almost all, from the nation’s elite research universities to local community colleges, as well as the vast majority of for-profit colleges -- (a) to “make publicly available to their students and employees, the policies and procedures related to the illegal downloading and distribution of copy-righted materials” and (b) to “develop a plan for offering alternatives to illegal downloading or peer-to-peer distribution of intellectual property as well as a plan to explore technology-based deterrents to prevent such illegal activity.”

Give them due credit: Glickman and Sherman deserve points for persistence. As drafted, Section 494 reflects the key points Mr. Sherman pressed in a letter to college presidents distributed by the American Council on Education earlier this year: Buy a subscription service and acquire a “technology solution” to deter illegal P2P activity. And yet these provisions are, in essence, extortion: the message to campus officials, initially in Sherman’s letter and now in the provisions of Section 494, is that you can buy your way out of the P2P quagmire.

Earlier this year I described Mr. Sherman’s letter to college presidents and the March Congressional hearing on P2P that followed as evidence of the media association’s “Spring Offensive.” We now see that the Spring Offensive has new energy and impact in Fall 2007.

Rather than address the proliferation of P2P activity in the consumer market, often aided and abetted by consumer broadband service providers, the MPAA and RIAA have opted to focus on college students, campus networks, and college administrators – admittedly easy (and often unsympathetic) targets. In an era of digital media, are consumers understandably confused by the Supreme Court’s 1978 BetaMax decision that said they could use VCRs (and today, by extension, TIVO and similar technologies) to record “over the air” content for personal use? Probably so. But while the real, long-term solution on illegal P2P activity should focus on user education, the MPAA and RIAA apparently feel that legislation offers a quicker remedy.

Glickman and Sherman have successfully moved the Congressional activity on P2P from public hearings to draft legislation. While at face value these three requirements - to inform students and employees about illegal downloading, to develop plans for offering alternatives (i.e. subscription services) to P2P illegal downloading, and to explore technology deterrents -- seem reasonable, they are really the soft glove that hides the steel fist of federal enforcement. The legislation would implicitly require campuses to spend money for music subscription services such as Napster or Ruckus, and also spend significant sums for “technology-based deterrents” to prevent illegal P2P that experts in both the campus community and the corporate sector have deemed ineffective as a solution to address the problem of P2P in both the campus and consumer market.

(Speaking at a June 5 Congressional hearing on illegal P2P downloading, Vance Ikezoye, president Audible Magic, one of the firms that provides a “technology deterrent” for illegal P2P activity, acknowledged that “technology will never be the entire solution [to P2P piracy] … just one of the tools.” Adrian Sannier, CIO at Arizona State University, told members of Congress assembled for the June 5 hearing that his campus had spent approximately $450,000 on P2P technology deterrent software over the past six years. Sannier described P2P as an “arms race.”)

Moreover, the draft legislation authorizes (but does not appropriate) funds, controlled by the secretary of education, “to develop, implement, operate, improve, and disseminate programs of prevention, education, and cost-effective technological solutions, to reduce and eliminate the illegal downloading and distribution of intellectual property.” These grants may also be used for the “support of higher education centers that will provide training, technical assistance, evaluation, dissemination, and associated services and assistance to the higher education community [on matters of P2P piracy] as determined by the Secretary and institutions of higher education.”

Come on! Is this really a top policy priority for the Department of Education? Should the Department really be underwriting campus centers to conduct research and develop user education programs at the behest of the music and movie industries?

In current format Section 494 is, in essence, a set of unfunded federal mandates that will provide substantial subsidies to the music industry and to the firms that claim to offer successful “technology-based deterrents” intended to stem illegal P2P activity on campus networks. Of course the cost of these unfunded mandates will be passed on to students, either as increased tuition or as supplemental student fees. And then Members will, of course, complain loudly about the rising cost of higher education, a concern that forms the underlying premise of the overall Higher Education Act bill!

As drafted, Section 494 reflects the continuing efforts of the MPAA and RIAA to seek Congressional remedy for market shifts. For example, more than a dozen years ago Congress enacted a small tax on blank media –think of blank cassette tapes – because consumers were buying and copying music cassettes, perhaps one for their car, perhaps one for a friend. Note that the music industry did not complain to the manufacturers who, beginning in the mid-1970s, flooded the consumer market with dual deck cassette players. Rather, they went to Congress for redress, remedy, and revenue, rather than pursue other avenues toward resolution.

Interestingly and unfortunately, students have been MIA in the public discussions (or public posturing) about illegal P2P on campus networks. Yes, several surveys of full-time undergraduates confirm that students are in many ways ambivalent, apathetic, or uninformed about copyright and P2P issues. They have come of age with VCRs and TIVO and see little difference between recording a television program and downloading music. This has left college officials in the difficult position of condemning illegal P2P activity on campus networks, while arguing that their institutions should not be required to police this activity or provide the names of students allegedly engaging in illegal P2P downloading.

Students should get involved in this issue. If they are unhappy about the RIAA and MPAA lobbying efforts which would lead to Congressional mandates that could result in increased tuition because of the pass-through costs of subscription services and “technology-based deterrents” intended to stem illegal P2P, they can vote with their wallets. For example, what if students deferred their rush to the multiplex when new movies open each weekend? As it happens, the split in box office revenue between studios/distributors and local exhibitors (the companies that manage the multiplex in the mall) shift over time: distributors/film studios get more of the up-front money (i.e., during the first weeks of a release). So if students deferred their rush to the box office from the opening weekend to the third week, the net revenue (box office) might be the same over time, but they could affect the revenue that goes to the studios.

Illegal P2P downloading is a messy issue. But the swiftboating efforts of the RIAA and the MPAA to portray college students as the primary source of digital piracy will not resolve this problem, in either the campus or the consumer markets. Neither will federal mandates that ultimately will mean pass-through costs for students. The long-term solution lies in an aggressive mix of user education and new market models for digital content. The MPAA’s and RIAA’s efforts to secure remedy in the courts and Congress will neither provide resolution nor generate revenue in the market place.

Kenneth C. Green
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Kenneth C. Green is the founding director of the Campus Computing Project and a visiting scholar at the Claremont Graduate University.

Real Progress (Finally) on College Affordability

After a decade and then some of commissions, studies and stern warnings, Congress is poised to finally take concrete action to hold down the rising cost of a college education. A notable consensus has emerged among lawmakers of both political parties and major elements of the higher education community that sunshine and transparency are the best first steps to empower consumers and address the college cost crisis. While agreement among these parties is a feat in itself, this achievement is even more extraordinary considering the staunch objections of a few short years ago.

Today, the U.S. House of Representatives will vote on the College Opportunity and Affordability Act, a bill that will lift the veil on rampant tuition increases and hold individual colleges and universities accountable for their role in pricing students out of the dream of a higher education. The legislation couples strong consumer-driven disclosure with meaningful data comparisons so that higher education consumers and policy makers alike will be able to better understand the phenomenon of rapidly rising tuitions.

After shining a spotlight on the problem, the bill encourages solutions by requiring institutions with the greatest tuition increases to form Quality Efficiency Task Forces, whose purpose is to identify what is driving the cost increases and what can be done about them. The bill also calls on states to do their part, recognizing that for public institutions in particular, state support plays a critical role.

Keeping college affordable has been a priority of mine since I came to Congress. I earned my degree later in life, an experience that has helped keep higher education at the forefront of my agenda throughout my political career. And in the 15 years I’ve spent in the U.S. House of Representatives, rising college costs have consistently topped the list of “what’s wrong” with higher education, at least in the view of American students and families.

Even the most casual observers of American higher education recognize that there are no easy answers to the college cost crisis. The quality of our institutions has long been linked to institutional diversity, consumer choice and academic autonomy. At the same time, public and private colleges and universities alike are heavily subsidized by the public in the form of taxpayer-funded financial assistance. There has always been a tension between postsecondary independence and public accountability, a balancing act that is particularly tenuous when it comes to the question of appropriate federal intervention into hyperinflationary college prices.

In the lead-up to the 1998 Higher Education Act reauthorization, I thought the most appropriate solution was to enlist higher education experts. In doing so, we established the National Commission on the Cost of Higher Education. In simplest terms, the Commission recommended that colleges be required to disclose more detailed financial information, while also self-examining to identify strategies that would hold down costs. These seemingly modest recommendations were given a cool reception, to put it mildly.

After swiftly rejecting the Commission’s proposed reforms, the higher education community pledged to deal with rising tuitions independently. Lawmakers were given assurances that colleges and universities recognized the pressing need to hold down costs, and would act accordingly, without intervention. Unfortunately, it seems the college affordability gap has only grown wider in the decade since.

When we began the current HEA reform cycle in 2003, I knew colleges could no longer go it alone. Congress needed to do something. Building on the recommendations of the Commission, I proposed a College Affordability Index to help students and families better understand and compare tuition increases. Five years later, the details have been refined but the principle remains the same -- thanks to the bill we are about to consider, higher education consumers will finally be given the information they need to start exercising their power in the marketplace.

Luckily for students and families, Congressional action has not occurred in a vacuum. Colleges and universities have begun to recognize that the college cost crisis is not a figment of Congressional imagination, but a serious threat to educational equality and American competitiveness. The higher education community has also come to the conclusion that while congressional action is inevitable, institutions can still be the primary drivers of reform if they step up to the plate now and take a leadership role, rather than forcing Congress to intervene more aggressively.

Some in the higher education community continue to bury their heads in the sand and reject the very existence of a college cost crisis. Others acknowledge the problem, but spend more time criticizing our proposed solutions than offering creative responses of their own. Neither of these stances is acceptable.

Late last year, the Education and Labor Committee unanimously approved legislation that takes meaningful steps to keep college affordable. The bill will receive strong, bipartisan support in the House this week, and later this year our efforts to solve the college cost crisis will become law. College costs have dominated the 1998 and 2008 HEA reforms. Let’s hope that in another 10 years we will have finally changed the subject.

Howard P. (Buck) McKeon
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Rep. Howard P. (Buck) McKeon of California is the senior Republican on the House of Representatives Committee on Education and Labor.

Ensuring That States Support Higher Ed

As summer reaches its mid-point, selected high ranking U.S. House and Senate members continue to work on finalizing massive legislation to renew the Higher Education Act, which has already gone through seven extensions this year. One of the few primary issues still being debated is the “State Commitment to Affordable College Education Amendment,” commonly known as the “Maintenance of Effort” provision. The provision seeks to hold states accountable for maintaining certain levels of tax support for higher education, and I believe it is essential for the future of public higher education.

The maintenance of effort provision, which was advanced by Rep. George Miller of California, Rep. John Tierney of Massachusetts and supported by members of both parties on the U.S. House Committee on Education and Labor, is premised on the fact that the most significant factor impacting the rapidly rising cost of college education for nearly 80 percent of the higher education population has been the relentless decline in commitment on the part of most state governments to maintain requisite levels of public funding. The result of this long-term decreasing commitment has been that in many states, as state appropriations have dwindled, public university tuition and fees have skyrocketed. This trend has effectively shifted the burden of funding higher education from the general public to the student.

What Representatives Miller, Tierney and other bipartisan members of the House Education and Labor Committee have figured out is that billions in new student aid dollars will have little effect on the expansion of educational opportunity if state legislatures continue to consistently reduce their fiscal commitment to higher education. Essentially, MOE is a first step in holding states accountable for retaining given levels of appropriations for their own students. The perversity of the present system is that as state legislatures lower their fiscal effort or do not provide adequate support for increasing student populations, tuitions and fees subsequently rise, and as a result most federal student aid programs are tapped at higher levels further indebting ever more students and with greater average debt.

Many state officials have become savvy about the process. In fact, I was told by a very high ranking member of the state legislature in Kentucky a couple of years ago that he did not need to provide additional tax support for public universities since the institutions themselves had the ability to increase their own student tuition and acquire the funds through the federal tuition-based aid programs. This “supplanting” of state support with federal tuition-based program support occurs more readily when state economies are bad or simply when legislators, by whim or fancy, refuse to provide the appropriate levels of public tax support, knowing full well that public universities will in response raise student tuition and fees to provide essential funds.

As a consequence, additional fiscal burdens are placed directly on students and indirectly on the federal government to offset what states fail to provide. This has been a pattern over the last three decades as increases in state legislative appropriations have been unreliable and state institutions are sent scrambling for needed revenues. The maintenance of effort provision has the potential to place pressure, through the secretary of education, to better stabilize state appropriations by means of federal disincentives through the use of Leveraging Educational Assistance Program funds and other programs, or incentives when new federal funds are made available in the future.

Supporters of the MOE provision include the American Association of State Colleges and Universities, which represents the majority of public universities nationwide, and numerous national student organizations. Opposition to the inclusion of the MOE Amendment is spearheaded by the National Governors Association and Council of State Governments, who have the obvious interest in seeing that billions in funding should continue to flow freely without strings. This no-strings approach is, of course, extremely attractive to states that continue to reduce their commitment to public higher education by shifting the financial responsibility away from themselves.

Strong opposition also resonates from the “states’ rights” element that insists that the federal government should not have such fiscal leverage over states. Leading this charge is Sen. Lamar Alexander of Tennessee, who as U.S. secretary of education favored the elimination of the Department of Education and represents a state that is constantly last, or near last, among the 50 states in its tax effort to support public education at virtually all levels.

Legislators, such as Senator Alexander, who argue that states should receive federal funding without a corresponding fiscal commitment to higher education actually perceive that this anti-state tax effort strategy is good public policy. Unfortunately, in this system, the students are the ultimate losers as college affordability declines and federal direct student aid dollars are increasingly rendered less effective.

Many opponents of this amendment also insist that the MOE provision is precedent setting and represents a new dimension of federal encroachment in state sovereignty. In fact, concerns about the federal government holding states fiscally accountable is not new and has been a staple of education and welfare legislation for many decades. In 1965 the Elementary and Secondary Education Act carried with it a maintenance of effort provision that forbade states to supplant their own funding with federal dollars. Over the last four decades, these supplanting provisions have been upheld and enforced by federal courts on numerous occasions. Medicaid, and other federal funding measures operate in similar fashion making it difficult for state legislatures to cut funding without federal fiscal consequences.

In summary, maintenance of effort is an essential component for ensuring that states are held accountable for their funding of higher education. This amendment, if used effectively by blending both fiscal disincentives and incentives, will make states think twice before cutting higher education appropriations and should have an attendant effect of better stabilizing state higher education finding. The true winners will be, of course, the students, but in the broader context the spillover beneficiaries from state fiscal stabilization and enhancements to higher education will be the entire social and economic system.

F. King Alexander
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F. King Alexander is president of California State University at Long Beach.

A Crowning Indignity

At one time a faculty was viewed as more than just a group of teachers. Faculty members were the essence of a college or university. They set the intellectual tone of the school, and as a result, the institutional agenda was centered on ideas, learning, values and bringing students into the realm of the mind.

A college education was once intended to bring about a comprehensive transformation of the entering high school graduate, yielding an incipient scholar four years later. Students at a college were expected to absorb its culture and attitude and identify, however subliminally, with its mission. Those majoring in a department established a sense of identity with the field, and professors exhibited a sense of responsibility for their welfare and progress. Even in larger institutions, majors were viewed as individuals, and sometime as colleagues, not just numbers. Full time faculty members became advisers, confidants, and sometimes, friends.

It's different now. In many institutions the faculty is viewed as another cost center, to be judged in terms of "productivity," rather than as the reason students come to the college.

People seem quite enthusiastic about the further savings that can be squeezed out of this cost center. Writing articles suggesting eliminating tenure, laying off faculty, increasing class size, and replacing full timers with adjuncts has become the new cottage industry.

Yes, a full professor teaching an advanced seminar to a group of 10 students is very expensive. But didn't we benefit from this relaxed, thoughtful and expensive kind of learning?

Are we ready to deny it to the vast number of students from a different demographic who are first appearing on our campuses? If we are serious about access, shouldn't we be prepared to pay for it?

The adjunct, often without office quarters, and with a heavy travel schedule associated with multi-campus commitments, rarely has time for this intellectual hand holding. S/he has been hired to teach a course, and as hard working as s/he is, as dedicated and caring -- the outcomes are simply not what they would be were the same individual to be hired on a tenure track.

By now, about half of America's full-time, tenured faculty has been replaced with adjuncts. There is an immense cost savings inherent in this, but the change speaks to something far more fundamental than cost. Everyone seems to agree, yet the replacement process grinds on.

The next instance of injury to the status and role of faculty takes place at the policy making council of most colleges. The nature and number of areas that appear on a college president's agenda is large and growing. Richard Vedder reports that "the number of non-teaching professional staff has doubled in relation to enrollment over the past generation. Universities have added scores of public relations specialists, wellness coordinators, diversity czars, international program administrators, assistant deans, associate provosts, and the like" and concludes that "some paring of the bureaucratic army will become necessary" in the months and years ahead, given budget realities. I'm not so sure.

The complexity of today's university ensures that there will be many voices clamoring for attention. Maintenance, security, human resources, development, must all be heard. The lights must go on and students must be safe. Student placement, housing, the registrar and all of the other necessary centers of activity in a postsecondary school are not likely to disappear. The result is that the voice of faculty, of scholarship, of ideas is necessarily muted at the decision making administrative levels, and the tenured voices calling for a more rigorous curriculum, or modifications (and extra costs) associated with an exploding knowledge base become more remote.

In many colleges, the thought that a faculty member might pick up the phone and exchange ideas with the president would be viewed as quaint. The passion, the concern, the stimulating ideas, and the debates regarding content and curriculum, now take place at a level far below the decision making.

The irony is that without the Sage on the Stage, students would simply sit home. There are enough books and online courses to provide every student with the knowledge needed to earn a degree on his/her own. Yet the young people keep coming, filling up our classrooms, competing for good seats -- and not because the student center's food is excellent, or because the counseling center is competent and concerned. The voice of faculty members, of learning and scholarship, is as essential to the school as ever. But it is being drowned out.

The crowning indignity for professors was the publication in the Federal Register of the list of constituencies identified by the U.S. Department of Education as "having interests that are significantly affected by the subject matter of the negotiated rulemaking process" for carrying out the revisions Congress made last year in the Higher Education Act. Over 30 different categories are listed, encompassing everyone -- except the faculty.

There is no point entering a debate as to which of the 30 groups are as relevant to the discussions as professors. Nor does it help that some of the participants will also happen to have faculty rank at a postsecondary institution.

Regulations will be promulgated in the absence of the English professor who knows, first hand, how a regulation will play out in a classroom of first generation English speakers. Or the biology professor who knows what "cost saving" could mean to the effective teaching of a laboratory course. There will be no voices pressing the case for the liberal arts, for critical thinking skills, for the education of a perceptive, thinking citizenry, and no first-hand advocates for graduate education and the need to replace an aging professoriate.

Who will help create a sense of balance in the discussions so that an occupational mindset does not capture the thinking of all concerned?

Every change, every nuance, every new regulation will play itself out, in one way or another, in the classroom. And if the process doesn't benefit from the passion and presence of classroom faculty, it is at risk of being flawed.

Omitting faculty from the list was surely an oversight. At the same time, someone might want to jot down a reminder for negotiated rulemaking in 2015, when the Higher Education Act will next be reauthorized: Even if only for appearances' sake, "faculty" should be added to the list of people interested in education.

Bernard Fryshman
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Bernard Fryshman is an accreditor and a professor of physics.

Variable Rate for Loan Consolidation 'Viable,' GAO Says

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The Education Department's proposal to start charging a variable interest rate instead of a fixed, low rate to borrowers who combine multiple federal student loans into one is a "viable option for reducing federal costs" in student loan programs, the U.S. Government Accountability Office said in a February letter to Republican lawmakers, who had requested the review.

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Rep. John Boehner told a group of college presidents Tuesday that members of Congress are tired of hearing from constituents who can't figure out why their children can't transfer credit from one institution to another.

"We hear about it nonstop," Boehner (R-Ohio) said. He said that both of his daughters were "caught up" in the issue, thinking that they were taking courses that would transfer -- only to find out that wasn't the case.

2004 Reauthorization, Take Two

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House Republicans unveiled their proposals for renewing the law that governs federal financial aid programs, which mirror the bill introduced last year.


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