GOP Looks to Put Its Mark on Higher Education

The Chronicle of Higher Education
November 12, 2004

With the re-election of President Bush last week and the Republicans expanding their majorities in the U.S. Senate and the House of Representatives, the GOP will have almost a free hand to put its stamp on national higher-education policy for at least the next two years.

In the short term, the agenda will probably be more friendly to for-profit colleges and student-loan companies. Proposals to relax certain rules that proprietary colleges must follow to participate in federal student-aid programs and changes in the government's loan-consolidation program that would make it less attractive to borrowers are expected to move forward. As just one indication of what the election results mean for the loan industry, the day after the vote last week, the price of shares in the loan giant Sallie Mae rose 10.3 percent.

In the long term, the Bush administration and its allies on Capitol Hill are planning to make permanent a number of temporary tax cuts that, along with the war in Iraq, will continue to squeeze domestic programs, including student aid and research-and-development spending.

The election "will definitely strengthen the president's push to rein in federal spending, including education," said Edward R. Kealy, executive director of the Committee for Education Funding, which represents more than 100 education groups. "It is going to put education advocates to the test."

With ardent conservatives replacing more moderate members in the House and Senate, it is also unlikely that Congressional leaders will confront the president over his policy restricting federal funds for embryonic-stem-cell research. And with strong backing from its conservative base -- 2 in 10 voters told pollsters that "moral issues" mattered to them more than any other -- Republicans may feel emboldened to reignite the culture wars of the early 1990s by flagging controversial projects at the National Endowments for the Arts and the Humanities and mounting campaigns against perceived bias on college campuses and against certain programs, like gay and lesbian studies.

"I do think the folks on the religious right have reason to believe, at the moment, that the wind is at their backs," said Michael Berube, a professor of English at Pennsylvania State University at University Park who frequently writes about academe for The Chronicle and other publications. "Things will be significantly more difficult for certain faculty in certain controversial areas."

The work of the Bush administration and Congress on Mr. Bush's agenda will begin almost immediately, with legislation extending the Higher Education Act, which governs most federal student-aid programs, probably coming early next year. That is where for-profit institutions and the loan companies may see gains. On the campaign trail, Mr. Bush promised that he would push Congress to relax a rule that requires a for-profit college to receive at least 10 percent of its tuition and fee revenue from nonfederal sources.

Bruce D. Leftwich, vice president for government relations at the Career College Association, the major lobbying group for for-profit institutions, said the results of the election were "very positive" for proprietary colleges. President Bush "understands the mission of for-profit institutions," he said. "We're graduating students in fields that the marketplace is demanding."

'Nervous' About Kerry

The student-loan industry was "very nervous" about the possibility that Sen. John Kerry would win last week, said John Dean, special counsel to the Consumer Bankers Association. The industry feared that if Senator Kerry were elected president, his administration would push Congress to overhaul the guaranteed-loan program to reduce lenders' profits, as the Massachusetts senator had proposed on the campaign trail this year. At the very least, lenders suspected that Mr. Kerry and his running mate, Sen. John Edwards of North Carolina, would have tried to reinvigorate the competing direct-loan program, which provides federal loans directly to students through their colleges.

Eileen K. O'Leary, chairwoman of the National Direct Student Loan Coalition, said she expected the Bush administration to continue "its policy of benign neglect" of the direct-loan program. The president, she said, "has not been doing anything proactive to strengthen or increase participation in the program."

Although President Bush is a big fan of the bank-based guaranteed-loan program, it is unlikely that he will call for eliminating direct lending anytime soon because doing so would be costly. Federal budget officials consider direct lending to be a moneymaker for the government because of the interest that borrowers pay to the Department of Education on their loans.

Mr. Bush may need that money. It is unclear how the president will continue to pay for higher-education programs as he tries to reduce an enormous federal budget deficit, finance the escalating costs of the war in Iraq, and cut taxes.

College lobbyists seem most concerned about how the government's need-based student-aid programs would fare if the Bush administration and Congress got serious about tightening their belts. Many of those college advocates were alarmed when they learned, in May, of a White House memorandum that suggested that the president would try to reduce the budget deficit in the 2006 fiscal year by proposing cuts in student aid and most other domestic programs. Democratic lawmakers warned that if the administration stuck to its preliminary budget figures, Congress would have to reduce the maximum Pell Grant by $75, to $3,975.

Few, if any, lobbyists now believe that Mr. Bush will propose cuts in Pell Grants, considering that he touted his support for the program in his acceptance speech at the Republican National Convention and during the final presidential debate. Still, they do not believe that the president will request a large enough increase in Pell funds to raise the maximum grant significantly or to eliminate a $3.7-billion deficit in the program's budget.

Over the past four years, Mr. Bush has asked Congress to increase spending on Pell Grants, the government's primary source of aid for students from low-income families, by 47 percent. Still, the maximum grant has remained at $4,050 for two years because the appropriations have not been enough to keep up with an unexpected surge in demand for the awards. The top grant is likely to stay at that level for 2005. At the same time, the administration has not sought increases in the government's other major student-aid programs, although the president promised on the campaign trail to provide $5,000 grants to financially needy students who agree to study mathematics or science in college.

Sen. Charles E. Grassley, a Republican from Iowa and chairman of the Finance Committee, is expected to reintroduce legislation making permanent several measures from President Bush's 2001 tax-cut legislation, including tax preferences for prepaid tuition plans, deductions for interest paid on student loans, and increased limits on contributions to federal college savings plans.

A more substantial Republican majority could help give the measure needed momentum, but Mr. Grassley is also expected to separately introduce a bill that would retain a $4,000 tax deduction for tuition, which will expire at the end of 2005. Also expected to advance: a measure permitting several charitable tax breaks, including tax-free withdrawals from IRA's for contributions to collegesand universities.

"It frees up a lot of money for colleges and universities," said Karin Johns, director of tax policy for the National Association of Independent Colleges and Universities.

Return of Culture Wars?

Spending constraints will also make it unlikely that Congress will finish doubling the National Science Foundation budget by the 2007 fiscal year, and could mean cuts for space science and agricultural research, lobbyists warn. Even the National Institutes of Health, which saw its budget double between 1998 and 2003, is expected to see more moderate increases over the next four years, though its biodefense account could continue to grow. Spending on the National Endowment for the Humanities will probably remain flat, or increase only slightly, observers predict.

"With luck, we won't get a decrease, but it's going to be hard to get more money," said John Hammer, director of the National Humanities Alliance, a lobbying group.

What worries some academics more is that a conservative Congress will scrutinize research financed by the federal government that does not mesh with its ideology. What's more, lawmakers could push forward in adopting the "academic bill of rights," proposed by David Horowitz, president of the California-based Center for the Study of Popular Culture. It enumerates several principles that colleges should follow, such as fostering a variety of political and religious beliefs when making tenure decisions, developing reading lists for courses, and selecting campus speakers.

"The election is a big boost for the academic bill of rights, no question," Mr. Horowitz said in an interview last week.

Stanley Fish, dean emeritus of the College of Liberal Arts and Sciences at the University of Illinois at Chicago, said liberals are ill-prepared to challenge Mr. Horowitz's efforts.

"There doesn't seem to be any organized energy coming from the cultural left that would act as a counterweight," he said.

Debate Over Science Policy

Social issues are also expected to play a greater role in science policy. With President Bush's victory, the continuing discussion over federal financing for stem-cell research is only going to get more intense, some research advocates predict. Because scientists must destroy embryos left over from in vitro fertilization to obtain colonies, or "lines" of stem cells, abortion opponents find the practice immoral. In 2001 Mr. Bush issued an executive order that offered federal funds only for research on stem-cell lines existing at the time. Senator Kerry had pledged to reverse that order as president.

The stem-cell issue could soon pit Mr. Bush against some powerful members of his own party. Two Republican senators who have led the charge to broaden stem-cell financing -- Arlen Specter of Pennsylvania and Orrin Hatch of Utah -- predicted before the election that at least 60 senators would vote for such a change (Republicans will control 55 seats in the Senate come January). Under Senate rules, at least 60 votes are needed to overcome procedural roadblocks and bring controversial measures to a vote. But with the new Senate more conservative than the current one, leaders may not want to risk a vote, especially as they try to move forward on other priorities.

"We have more than enough votes to overturn his policy in Congress," said Anthony J. Mazzaschi, associate vice president for biomedical and health-sciences research at the Association of American Medical Colleges. "The question is, would the leadership allow us to have a vote?"

Meanwhile, the Bush administration is expected to continue to face accusations from researchers that it has manipulated or ignored scientific findings and overruled federal scientists to comport with the president's policy preferences. Criticism of Mr. Bush among scientists has simmered since a report -- issued in February by the Union of Concerned Scientists, a nonprofit group that opposes nuclear power and genetically engineered crops -- accused the administration of misrepresenting the consensus of scientific opinion on a wide range of policy issues, including climate change, forest management, and air pollution.

The Bush administration has dismissed the complaints as a series of overgeneralizations motivated by partisan politics. But the controversy has not abated, as scientists have cited additional examples. During the campaign, a large number of academic scientists endorsed Senator Kerry. While federal financing for science has been strong throughout Mr. Bush's first term, there is concern among researchers that if the president pursues his plan to halve the federal deficit in five years, some areas of federal research support could suffer.

Officials in the Bush campaign have insisted that those worries are unfounded and that the president will continue his commitment to increase government spending on scientific research. But many research lobbyists were unhappy with the president's latest budget requests, for the 2005 fiscal year. Mr. Bush's proposed increase for basic research in 2005 would slow to just 0.6 percent. The National Institutes of Health would do only slightly better, with an increase of 2.7 percent.

"There is a sense that Congress has bent over backwards to provide money [for the NIH] and that we should be happy with minimal increases," Anthony P. DeCrappeo, associate director of the Council on Governmental Relations, said at a meeting of research administrators here last week.

Jeffrey Brainard, Stephen Burd, Kelly Field, Karin Fischer, and Jeffrey Selingo contributed to this article.


WHO AND WHAT TO WATCH IN WASHINGTON: 6 KEY PEOPLE

Roderick R. Paige, Secretary of Education

It is uncertain whether Mr. Paige will be asked to stay on for a second term. There was speculation this year that the White House was unhappy with him, especially after he came under fire from teachers for referring to the National Education Association as a "terrorist organization." Still, some advocates for education question the assumption that he's leaving, given the prominent role he played at the Republican National Convention. Some college leaders and lobbyists wouldn't mind seeing him go, as they would prefer an education secretary who would provide more leadership on higher-education issues.

Tommy G. Thompson, Secretary of Health and Human Services

Mr. Thompson told reporters before the election that he would not stay on in a second Bush administration. The secretary oversees the National Institutes of Health, the largest single source of funds for academic research. Mentioned as a possible successor is Mark B. McClellan, a former commissioner of the Food and Drug Administration, who is now administrator of the department's Centers for Medicare and Medicaid Services. Mr. Thompson is seen as having helped persuade President Bush to provide some federal funds for research on human embryonic stem cells. However, academic scientists complain that his office appeared to use ideological criteria to choose nominees for federal scientific-advisory committees.

Sen. Arlen Specter, Republican of Pennsylvania

Mr. Specter, who held off a pair of challengers in his home state this election year, will face another tough fight next year as he continues his efforts to increase federal funds for the National Institutes of Health in an increasingly dismal budget environment. In addition to his role as chairman of a Senate Appropriations subcommittee on labor and education, Mr. Specter is in line to assume the helm of the Senate Judiciary Committee, a role that could leave the onetime district attorney pulled in multiple directions. Still, higher-education lobbyists are counting on Mr. Specter and his Democratic counterpart on the subcommittee, Sen. Tom Harkin of Iowa, to continue their cooperative efforts to increase spending for Pell Grants and biomedical research.

Sen. Michael B. Enzi, Republican of Wyoming

Mr. Enzi is the leading candidate to become the next chairman of the Senate committee in charge of higher-education policy. Its current leader, Sen. Judd Gregg of New Hampshire, plans to leave the panel in January to take over the Senate Budget Committee. Mr. Enzi is expected to support the efforts of Republicans in the U.S. House of Representatives to phase out the portion of the financial-aid formula that distributes student aid on the basis of historical allocations, a change that Mr. Gregg opposed. Mr. Enzi is also a strong supporter of for-profit colleges and is expected to help lead the charge to relax certain rules that those institutions must follow to participate in the federal student-aid programs.

Sen. Thad Cochran, Republican of Mississippi

Mr. Cochran is all but certain to become the next chairman of the Senate Appropriations Committee, taking the gavel from Ted Stevens of Alaska, who is barred from continuing as chairman under a term limit. As a leader on agricultural issues, Mr. Cochran has been a backer of money for land-grant institutions, channeling research dollars from the Department of Agriculture to those universities. He is given high marks for his support for the National Endowment for the Arts and is viewed as generally sympathetic to higher education. Still, some college lobbyists worry that he will face a learning curve as he settles into his new job, a task that is likely to be exacerbated by the limited federal budget.

Rep. Ralph Regula, Republican of Ohio

While seniority rules in the Senate, Mr. Regula, the second-longest-serving member of the House Appropriations Committee, is not a shoo-in to assume leadership of the panel. The current chairman, Rep. C.W. Bill Young of Florida, faces a term limit in that post. Mr. Regula is jockeying with fellow committee veterans Harold Rogers, of Kentucky, and Jerry Lewis, of California, for the slot, which will be decided by Republican leaders. Mr. Regula, who leads the subcommittee that finances higher education, has called for more funds for biomedical research and student aid. But the 16-term representative has been cool to the practice of earmarking funds for specific projects or institutions, including colleges and universities.

Compiled by Jeffrey Brainard, Stephen Burd, and Karin Fischer

WHO AND WHAT TO WATCH IN WASHINGTON: 5 HIGHER-EDUCATION ISSUES

* Student loans: President Bush's victory could spell trouble for the direct-student-loan program, which provides money to students directly through their colleges. Although the administration is unlikely to try to kill the program, it is not going to take any action to discourage colleges from leaving it. And with Republicans having strengthened their control of Congress, they will probably support the loan industry's proposal to make the federal loan-consolidation program less attractive to borrowers by preventing them from being able to lock in low interest rates for up to 30 years.

* Stem-cell research: President Bush is expected to continue his policy restricting federal funds for academic studies of human embryonic stem cells. The passage of a ballot measure in California providing $3-billion in state funds for such research could ease the pressure on him to liberalize his policy. Leaders in Congress, where the Republican Party expanded its majority in last week's election, are not expected to confront him on the issue.

* Regulation of for-profit colleges: On the campaign trail, President Bush promised that he would push Congress to relax certain rules that proprietary colleges must follow to participate in the federal student-aid programs. Those include the "90/10 rule," which requires proprietary institutions to receive at least 10 percent of their tuition-and-fee revenue from nonfederal sources. Lobbyists for public and private colleges oppose the proposed change because they fear it could expose the government's student-aid programs to fraud and abuse.

* The culture wars: In exit polls, 2 in 10 voters said "moral issues" mattered to them more than any other. That is likely to get academics nervous about the return of the culture wars of the early 1990s and a shift toward more-conservative scholarship. Congress, for instance, may pass legislation creating an advisory board that would monitor what is taught at federally financed international-studies programs at American colleges. Critics say the material is biased against U.S. foreign policy.

* Taxes: Election-year conflicts held up consideration of legislation offering new tax breaks for charitable donations, including tax-free withdrawals from individual retirement accounts for contributions to colleges and universities. It enjoys broad bipartisan support and should easily win approval. In addition, look for a push to make permanent a number of temporary tax breaks included in a 2001 law; they include eliminating the tax on interest earned in state prepaid-tuition plans, and permitting students or their parents to deduct up to $4,000 of college tuition from their taxable income.