Higher Education Reform Difficult : It's The Money, Stupid

Law makers talk about the benefits of federal loans in their districts, but what they seem to forget is the system is in debt for more then a trillion dollars and growing. I wonder what they will have to say when the school systems in their districts find out the money is no longer available? The government is broke!

How will the cities and states fund these huge money holes that are now holding their collective hands out to the local taxpayers pay the exurbanite salaries of the professors and care for all of the new buildings bought with the federal student aid monies? But wait, the taxpayer is broke as well. What now?

Politics of Higher Education Reform
Source: Andrew Kelly, "The Thorny Politics of Higher Education Reform," Forbes, March 31, 2014.
April 4, 2014

While reform efforts in the K-12 arena have made great progress, from charter schools to digital learning, higher education policy is "less hospitable to reform," says Andrew Kelly, founding director of the Center on Higher Education Reform at the American Enterprise Institute.

Every congressional district benefits from federal student aid, so lawmakers are disincentivized to put those dollars at risk.

• In 2011-2012, every single congressional district had at least one two- or four-year college that participated in federal aid programs within its district. The median district had 11 schools; 387 districts had more than five colleges.
• Most people do not think of student aid as being distributive in the way that Farm Bill subsidies are, but that distinction is just semantics. While federal aid dollars might initially go directly to students, that money ultimately winds up at colleges.
• Looking at all Pell Grant and federal loan money that went to undergraduates at U.S. colleges, the median congressional district received more than $167 million in aid in the 2011-2012 year. In 160 districts, colleges received $200 million at least.
• To put that $167 million into perspective, $13.8 billion was spent on the federal program that funds disadvantaged students in K-12 education in 2013. If you were to divide that figure by the number of congressional districts, including D.C., it equals out to just $31.7 million per district.

Colleges rely on these funds. One 2013 study found that two-thirds of college revenue comes from federal student aid. On top of this, colleges employ hundreds and sometimes thousands of local residents -- pulling funds away from those schools threatens local jobs.
But K-12 schools that receive federal funding are also found throughout these congressional districts, so why are the politics of higher education so different?

• Federal spending on K-12 schools is smaller, both proportionally and absolutely, than spending on grants and loans.
• Additionally, the Republican-Democrat divide that tends to dominate the K-12 education reform debate is not as visible in higher education. Democrats like the federal loan subsidies, and Republicans like the federal aid voucher system and the role of the private sector.

Whether these politics change may depend largely on the public -- Americans are increasingly skeptical of the value of today's college education. If public perception continues to change, lawmakers may be more willing to support higher education reform.