RELEASE: Report Highlights the Next Big Challenge in Higher Education Policy

Higher-Ed Quality & Affordability

July 8, 2015


Education Reform Now Releases Report Highlighting the Next Big Challenge in Higher Education Policy

Report, Resources and Reform: The Obama Administration’s Higher Education Legacy and the 45th President’s Challenge, details the Obama legacy in higher education policy and how higher ed debates will soon mirror those on K-12 education policy

WASHINGTON, DC (July 8, 2015) – Nearly 3 million more working-class students now attend college with the help of Pell Grants than did in 2008, thanks in large part to the Obama Administration’s massive and unprecedented investment in college financial aid. A new report entitled Resources and Reform: The Obama Administration’s Higher Education Legacy and the 45th President’s Challengelays out the policies and hardball political tactics behind the Obama-era investment in financial aid. But the authors delve further and reveal that the deeper, conceptual higher education legacy is actually how Obama extended the policy paradigm beyond simply addressing college access and affordability to also focus on college completion and college quality.

Record resources in the form of more and bigger Pell Grants, better student loan repayment benefits, and substantially increased higher education tax benefits have boosted college access – particularly for the 700,000 additional underrepresented minority students now enrolled in college immediately after high school – and stemmed the effects of increased tuition, according to the new report.

For years, policymakers—and therefore the law—assumed that higher ed institutions were providing quality instruction in exchange for taxpayer and private dollars. This meant that the battle often fought was over dollars—access and affordability. But Obama’s legacy goes further and sets the stage for the next big policy debate: what reforms are needed to ensure quality higher education as well as access to it?

“Obama’s expanded focus was controversial, given that traditional Democratic allies – college leaders – are now on the hot seat for addressing issues they’ve never had to confront publicly before – issues of college progression, completion, and post-graduate outcomes,” said Michael Dannenberg, director of strategic policy initiatives and a co-author of the report.

“The concern now is how the larger electorate and the 45th President will respond to the expanded debate. Will we go back to square one where leaders retreat to support simply more resources for higher education or will the 45th President rise to the challenge of meeting the need for increased resources AND reform?  Affordable, quality college education may seem like an easy thing to support, but it’s as politically complex as the K-12 debate.”

Obama has used virtually every lever at his disposal – including the American Recovery and Reinvestment Act, the Health Care and Education Reconciliation Act, and executive authority – to make increased investments in student financial aid. He:

  • Nearly doubled annual Pell Grant funding for low-income students, from $18.3 billion to $33.9 billion – supplying a cumulative increase of over $100 billion over the last seven years. The maximum Pell Grant award increased by 25 percent from $4,731 to $5,830.
  • More than tripled tuition tax credits for the middle class,with creation of the American Opportunity Tax Credit (AOTC) that replaced the HOPE tuition tax credit established under the Clinton administration. AOTC extends HOPE tax relief from a maximum of $3,000 over two years to a maximum of $10,000 over four years; $4,000 in benefits is now refundable for those with incomes so low they have no tax liability.
  • Capped student loan monthly payments, with the creation of Pay As You Earn and the improved Income-Based Repayment plan for new borrowers. Both plans lower minimum federal student loan payments from 15 percent to 10 percent of a borrower’s discretionary income and make federal loans forgivable after 20 instead of 25 years.

Beyond financial aid, Obama went further in approaching issues of quality and accountability through regulation, the bully pulpit, and legislation. Among his regulatory efforts, two areas of work are particularly notable:

  • Gainful employment, which established benchmarks related to debt and earnings for graduates of career colleges and trade schools. Following Obama scrutiny and efforts, graduation rates at four-year, for-profit colleges increased by nearly 40 percent from 23 percent in 2009 to 32 percent in 2013. One of the largest and worst providers of for-profit postsecondary vocational training – Corinthian Colleges – has closed.
  • Teacher preparation, which has established draft outcome-oriented quality indicators by which States must rate their postsecondary teacher education programs. Following threatened regulation and tough rhetoric out of Obama’s Education Department, 22 states now link information on how teachers perform in the K-12 classrooms back to their teacher preparation programs. Additional states and the main teacher education accrediting agency now make new teacher skill levels and success in boosting K-12 student achievement a factor in program approval and renewal.

But where the Administration fell short was in its efforts to drive reform through legislation. “It’s not surprising given the gridlock we face in Congress and a Tea Party-led environment to clamp down on government spending,” said Mary Nguyen Barry, policy analyst and co-author. “The proposals themselves, however, were groundbreaking in their scope and in conceptually trying to leverage federal dollars to push large State and institutional action in support of college access, affordability, and success.  Most federal financial aid long has been distributed through a voucher system.”

With little movement on the legislative front, the Obama Administration did not bend the college cost curve and the college degree attainment rate among young adults has only inched up from 38.8 percent to 40.9 percent between 2009 and 2013. The next President, regardless of party, should double down on the new higher education policy paradigm of tying resources to reform, and use the report’s policy recommendations as a guide down that path.

Recommendations include:

  • Establish minimum performance standards for colleges to access federal financial aid.
  • Cap student loan debt for students, colleges, and states that meet their shared higher education responsibilities; and,
  • Set the stage for the next big policy movement around student learning outcomes. It’s time for a “Higher Ed NAEP.

Full report is available here. For a preview of the report, watch the following video.

For more information on Education Reform Now, please visit and follow @EdReformNowUSA.