"Maybe the entire federal student financial aid system should be nuked."
Charles Miller, Chair, Secretary's Commission on the Future of Higher Education

"The arguments for public subsidies of higher education are, at the very least, highly debatable. A better than decent case can be made that perhaps government should, in general, largely get out of the higher education business, ending state subsidies and tax advantages for private donations. Moreover, the evidence is pretty persuasive that massive governmental infusions of funds, along with tax-sheltered private contributions, have contributed to the upsurge in higher education costs."
Richard Vedder, Commission member

"Consolidation and simplification will undoubtedly yield more accurate data about who is accessing federal financial aid…and what effect those programs have on access, retention, and debt burdens. In sum, why not have one federal grant program, one federal loan program and one uniform tax benefit schedule…"
Commission Issue Paper, Eliminating Complexity and Inconsistency in Federal Financial Aid programs for Higher Education Students: Toward a More Strategic Approach

Last September, the Secretary of Education appointed a commission to engage in a study and issue a report with findings and recommendations in less than 12 months to assist in "developing a comprehensive national strategy for postsecondary education that will meet the needs of America's diverse population and also address the economic and workforce needs of the country's future".

The Commission is now at the stage where it is sifting through the ad hoc reports it commissioned to outside consultants from think tanks and universities during the past nine months on topics ranging from accountability, accreditation, student financial aid, college costs, affordability, access, 21st century workforce development, adult learning needs, program quality, federal regulation, and cost benefit issues related to the nation's postsecondary education system.

The reports are available on the Commission's website at www.ed.gov/about/bdscomm/list/hiedfuture/about.html.

On May 18th, the Commission completed its final two-day meeting during which it began to establish a handful of broad topics taken from the 200 plus recommendations included in its 23 commissioned reports to incorporate in its final report to the Secretary.

However, agreeing on specific topics and recommendations was difficult, causing the Commission to agree only to give itself another month to complete its report (late September), and to agree to include language in the final report that would stress a general idea that America's education system must be K-16 at a minimum; that education is a lifelong endeavor; and that every segment of society (public and private) must work in partnership to promote K-16 education and beyond. The Federal Advisory Committee on Student Financial Assistance (ACSFA) has advocated this approach to promoting access to postsecondary education with a federally funded partnership between the state and federal governments and the private sector. Unlike the Secretary's Commission, the ACSFA is a permanent advisory body established by the Congress in 1986 whose membership is appointed by the Congress and Secretary of Education.

In terms of issues related to student aid, access, affordability, etc., Sara Martinez Tucker of the Hispanic Scholarship Fund and Louis W. Sullivan of Morehouse School of Medicine, and Gerri Elliott of Microsoft have been prime advocates of the Commission including strong recommendations concerning the participation of members of minority groups and women.

While the state of the Commission's work is still, at this late date, a work in progress, with no firm obvious direction on how the final report will treat student financial aid, what can be assumed is that the Commission's visibility and influence in shaping federal student financial aid policy may be greater than some thought last fall. Because of the Congress' delay in reauthorizing the Higher Education Act (HEA) and the direction of the past two Congresses in increasingly moving to reduce mandatory and discretionary spending, the recommendations put forward by the Commission which will propose to affect the country's higher education policy and save money, the report may very well impact the 110th Congress' reauthorization, appropriations, and budget deliberations in 2007.

It appears that the reauthorization of the HEA — already three years behind — will not be completed during the 109th Congress. The federal budget picture will likely not improve over the next year. The November 2006 general election will likely change the makeup of the Congress so that the new 110th Congress which convenes in January 2007 will be much different than the 109th. The nonpartisan Cook Political Report, which tracks Congressional races, recently increased its number of toss-up Congressional races from 24 to 36-all Republican incumbents. The partisan Democracy Corps has the competitive district number at 75 seats.

A new Congress convening in January beginning a new budget process with the HEA reauthorization process beginning all over again, may very well use the Commission's new report as a source for developing a reauthorization bill and/or its cost savings recommendations during the FY 2008 budget/appropriations process.

Another factor to keep in mind is that if the Commission's report does include a proposal to restructure the federal Title IV programs, and the 110th Congress takes up the HEA reauthorization, there is every reason to believe that the two major student loan programs reauthorized as a part of the 2005 Deficit Reduction Act (currently under challenge in the courts) will be reopened as a part of the new reauthorization process. The Senate and House Democrats are anticipating that the student loan programs will be reopened and have already filed their initial 2007 HEA reauthorization legislative vehicle in S 2573/HR 5150 which proposes to reverse the July 1st interest rate change to 6.8 percent to 3.5 percent for subsidized student loans and from 8.5 percent to 4.25 percent for Parent Loans, fully funds the Pell Grant programs to allow a $5,800 annual grant, restores the ability for students to consolidate their student loans, and repeals the single holder loan consolidation rule.

In summary, it would be wise to keep an eye on what follows from the Secretary of Education's Commission on the Future of Higher Education.

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