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Trusteeship Magazine

Public Policy: Similar Issues, Similar Challenges

By Emily M. Dickens and Lane Trotter
November/December
2015

What's on Boards' Minds in the U.S.?

By Emily M. Dickens

As we in the higher ed community anxiously await the reauthorization of the Higher Education Act (HEA), there is still a lot of intrigue for us to sink our teeth into. Is it worth it to fight the Department of Education’s College Scorecard, or is it better to use our energy to force improvements? Will the department’s new efforts to use prior-prior year data to streamline the financial-aid application process result in more students attending college? Will the House Ways and Means Committee force the Department of Education to regulate how institutions with large endowments save and spend their funds? Will the House and Senate come to an agreement on a sexual-assault bill, and will that bill be passed as standalone legislation? Will Congress begin antitrust exception discussions for the NCAA? Will Sen. Lamar Alexander’s regulatory reform agenda pass as a standalone bill? And finally, what will be the long-term impact of Speaker of the House John Boehner and Rep. John Kline’s unexpected retirements?

These are just a few questions facing us in the remainder of the 114th Congress. And we haven’t even addressed how the 2016 presidential campaign is having a direct impact on what is and isn’t up for consideration in this HEA limbo. So here are some quick thoughts on these burning questions.

Is it worth it to fight the Department of Education’s College Scorecard, or is it better to use our energy to force improvements?

Shortly after the College Scorecard was released, I found myself around a table with a group of higher ed experts trying to answer this question. The consensus was that there would be at least one more scorecard under this administration and, depending on which party wins the White House in 2016, possibly five more under Democratic administrations. So, for now, the scorecard is here to stay. Our efforts should focus on working with the Department of Education to improve its data and its marketing. First, the department should make it clear which students are included in the scorecard—Pell recipients only, or those who receive loans, too? And, secondly, the department should provide a disclaimer that these numbers relate only to the students they can track—such as first-time, full-time students or those receiving some sort of federal aid— leaving out a large percentage of those enrolled in college.

Will the department’s new efforts to use prior-prior year data to streamline the financial-aid application process result in more students attending college?

Speaking of financial aid, we were all surprised with the department’s announcement in September that prior-prior year tax information (i.e., two-year-old tax returns) will now be used in the application process. The IRS Data Retrieval Tool (DRT) allows automatic population of a student’s financial-aid application with tax return data and decreases the need for additional documentation. The data most readily available for timely submission are from two years prior. For months, education policy groups have been advocating for a simplified application process, but expectations for movement on this were low. So imagine our surprise when the department moved forward on this. It remains to be seen if the expected outcome— more of our country’s neediest students applying for aid and thus receiving access to higher education—will come to fruition.

Will the House Ways and Means Committee force the Department of Education to regulate how institutions with large endowments save and spend their funds?

This provides a nice segue to the other end of the financial-aid spectrum. Colleges and universities build endowments to supplement financial aid, among other things. Some institutions have endowments in the billions, and some members of Congress have a big problem with that. At the time of this writing, Rep. Tom Reed (R-NY) was working on a bill that will require the Department of Education to regulate the percentage of money spent annually from these large endowments and earmarked for financial aid. This bears watching, as these efforts fall outside the HEA process.

Will the House and Senate come to an agreement on a sexual-assault bill, and will that bill be passed as standalone legislation?

Another area likely to see some resolution before HEA reauthorization is campus management of sexual-assault issues. The chambers have differing visions that are very far apart. But, in an effort to show that Congress can work together, the two sides may conference in hopes of putting something on the president’s desk for his signature. The administration has much to gain from this issue. They’ve spent a lot of resources on it, and, more recently, Vice President Joe Biden has become the White House voice on the subject. In September, at the celebration of National HBCU Week, he implored the administrators and faculty gathered to play a bigger role in this important campus safety issue.

Will Congress begin antitrust exception discussions for the NCAA?

The NCAA remains on Congress’ radar. As with the endowment issue, whenever there seems to be too much financial gain, people have concerns. In addition, at some point, lower-tier Division I and Division II institutions are going to tire of trying to compete with the five conferences that can provide full cost of attendance and other perks. Without increased charitable giving, these institutions will continuously lose out on the top players. Poor play doesn’t lure large donors, so the stakes are high. Don’t be surprised if these institutions start engaging their congressional delegations for some relief.

Will Sen. Lamar Alexander’s regulatory reform agenda pass as a standalone bill?

Regulation is a recurring theme and will remain in the forefront if Sen. Alexander (R-TN) drops a bill based on the recommendations of the Task Force on Federal Regulation of Higher Education. There is agreement that many of the recommendations just make good common sense. The issue will be how the savings from deregulation are allocated. Will there be a regulation for that?

What will be the long-term impact of Speaker Boehner and Rep. Kline’s unexpected retirements?

Finally, let’s take a look at some of the people impacting our work. House Education and the Workforce Committee Chairman John Kline’s (R-MN) announcement that he won’t run again leaves him free to focus on getting HEA complete. There may be some pushback because of his lame duck status, which could forestall his efforts to put his stamp on HEA. However, the biggest surprise was the resignation of Speaker of the House John Boehner (R-OH). No matter your opinion on his post-Papal-visit declaration that he woke up that Friday morning and decided it was the day to step down, his unexpected departure leaves a veil of uncertainty in the long run. The naming of his replacement— Rep. Paul Ryan of Wisconsin— the impact of a budget shutdown, and whether or not House Republicans can unify will have a direct impact on the 2016 elections. Voters may think the government is better off when the two chambers are controlled by different parties and give the Senate the votes they need to take back a small majority in that chamber.

As you can see, there is still quite a bit to keep us intrigued and interested in the goings-on on the Hill. Let’s hope that, in the end, those responsible for governing higher education will see the best-case scenarios as outcomes.

America's Neighbor to the North

By Lane Trotter

Canada is a federation in which 10 provinces and three territories have constitutional responsibility for education. The constitutional structure has resulted in the evolution of 13 similar but slightly different postsecondary systems, publicly funded primarily through the provincial or territorial governments and with students paying most of the rest of the educational cost through tuition. The amount of tuition is often pegged to inflation or cost of living adjustments, and it varies by province and territory and by type of institution and credential.

In addition to the publicly funded institutions, there is also a broad array of private for-profit and private nonprofit institutions. The former tend to be career-focused institutions with shortterm training programs, and the latter tend to be denominational. However, there are exceptions based on jurisdiction and varying legislative frameworks.

The federal government is the largest taxer, and it transfers funds to pay for social programs such as healthcare and education delivered by the provincial governments. Each province and territory can then redistribute the allocated funding as it deems appropriate without any discussion or approval from the federal government.

All 13 jurisdictions have legislation that defines the role of the publicly funded colleges, institutes, and universities, and their rights and responsibilities, as well as the structure for private institutions. British Columbia (BC) tends to be the most permissive system, with the greatest variety of colleges and universities, both public and private. The BC postsecondary system was envisioned to be like the University of California system, with different types of colleges, universities, and polytechnics and an integrated and articulated credittransfer system.

In contrast, the system in Ontario has a clear divide between the role of universities and colleges, with no credit transfer envisioned. The colleges were created specifically to support regional economic development and provide the education and training needed for employment.

Current Issues Facing Postsecondary Education in Canada

The major issues in higher education in Canada are similar to those in the United States. They include:

An overall decline in public funding. Funding has become a major issue in Canadian postsecondary education, just as it is in America. In seeking to increase the number of students participating in higher education, provincial governments are allocating more money in general to higher education. Ontario, for example, has set an attainment level of 70 percent participation—the highest level in the Organisation for Economic Co-operation and Development. In fact, more people of all ages, not just the traditional age group of 18 to 21, are accessing postsecondary education.

To control the system’s growth in funding, Ontario has implemented a competitive model. Within this model, if system growth is at 2 percent annually, then to maintain the previous year’s grant, an institution has to grow at that same average growth. If an institution grows faster than the system’s average growth, then it receives extra funding by the amount it grows. Conversely, institutions that grow less than the system average are penalized by the percentage amount by which they do not meet the target.

In all three cases, however—growing faster, maintaining parity, or growing less—the funding per student has decreased. In addition, over the last three years, total funding has been cut by 1 percent annually as part of Ontario’s strategy to reduce the year-over-year provincial budget deficits.

British Columbia uses a cost-containment model wherein all institutions are funded by a block grant based on the total number of full-time equivalent (FTE) seats. Colleges or universities that exceed the target do not receive any additional funding. There is an expectation that institutions will achieve their target or they could be subject to a clawback in funding equivalent to the number of FTEs not achieved, although this has never happened. Like Ontario, BC has reduced operating funds over the last three years to achieve a balanced budget in FY 2015–16.

While both Ontario and BC have reduced appropriations, they have also prevented institutions from recovering lost operating funds through offsetting tuition increases. Tuition is capped in both provinces.

Access and affordability are issues that get raised during election cycles and by various advocates during and between the election cycles. In both BC and Ontario, the colleges act as access institutions to the general population, while the universities tend to be competitive based on a set number of seats for first-year admission. The GPA requirements for admission vary depending on whether an institution is rural or urban and its ranking and reputation.

In British Columbia, students can do their first two years of university studies at a college and then transfer to a teaching or research university into their second or third year to complete a degree. That differs from Ontario, where there are limited transfer options because the colleges and universities were set up to be discrete systems. Ontario is attempting to remedy this situation and committed $75 million three years ago over a five-year period to develop partnership pathways between colleges and universities to improve transfer opportunities.

Accountability. Both BC and Ontario use key performance indicators at a system and institutional level. Key data points are: student satisfaction, graduate satisfaction, employer satisfaction, and graduate employment rates by program, institution, and system. Each institution also collects other data it deems valuable to be used for a variety of purposes, such as supporting the marketing and recruitment cycle.

As an example, one of these data points for colleges in BC is the transfer rate from college to university. The public can access the collected data and review the information at the program, institutional, or system level, and parents and students can use the information to decide which institution meets their needs.

Campus safety has become a major concern of colleges and universities, as well as the public. In Ontario, the premier mandated that all 44 colleges and universities would have policies in place on campus security, in particular those dealing with sexual assault. Almost all of the institutions already had some form of campus-safety policies, but this directive provided an opportunity to review and update the current ones.

The Council of Presidents of the 24 Ontario colleges has developed a common policy framework for campus safety and sexual assault at a system level that each college then individually approved. The Ontario universities have used a similar approach. All BC institutions have safe-campus policies in place, but the Council of Presidents of BC colleges has reviewed the materials from Ontario and recommended that individual institutions evaluate and update their current policies as appropriate.

Data privacy and cyber security have become major issues as the use and dependence on information and communication technologies (ICT) have increased. ICT systems have become embedded in all aspects of the modern college and university, from student information systems to the delivery of courses and programs. ICT has become a required infrastructure tool that allows students to have more self-service and easier access to the college or university, but it has created other challenges in maintaining the security of personal data.

In Canada, a variety of federal and provincial regulations require that institutions ensure that students’ personal data are protected and not released without their permission. Breach of data protection and disclosure can result in censure from government oversight bodies or legal action from students impacted by the breach. The challenge for all institutions, but especially smaller ones like the colleges, is ensuring that appropriate IT structures are in place to prevent data breaches and data hacks from groups using phishing or other malware attacks.

Legislation and funding are the main drivers affecting construction and deferred maintenance in both BC and Ontario. Colleges require provincial- government approval for any new facilities. Universities have more latitude than the colleges as long as they are not borrowing to build new facilities. Even with secured funding, provincial-governmentapproval is required to initiate a construction project.

On the maintenance side, current depreciation accounting rules require that facility replacement costs be offset in institutional budgets. For both universities and colleges, this represents a major challenge. Building life cycles can be extended, while government funding is minimal and generally insufficient to pay for annual maintenance costs on existing facilities.

In sum, the Canadian postsecondary education system, like America’s, is facing many challenges in funding, enrollment, technology, and infrastructure, while dealing with higher government and community expectations. A good orientation for new board members on these issues is essential, given the rate of change and the need to ensure that boards are prepared to guide their institutions through it.

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