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Here’s how Washington could shape higher education in 2018

Significant changes in the federal government’s role in higher education could loom in 2018. (Carolyn Kaster/AP)

The year ahead could usher in significant changes in the federal government’s role in higher education. Events set in motion in 2017 will loom large, though resolutions may be years in the making. Here are a few things worth watching in the coming months:

Senate higher education bill: Universities, families, lenders and anyone with ties to higher education should be interested in how the Senate addresses the reauthorization of the Higher Education Act of 1965. House Republicans took the first major step in December by introducing legislation to overhaul the federal law governing almost every aspect of higher education. Chief among the proposed changes is the consolidation of loan programs, caps on the amount of money parents and graduate students can borrow, and the end of loan forgiveness for public sector workers.

“Getting rid of the loan forgiveness program would be a dramatic policy shift from what we’ve seen for the past few decades,” said Mary Clare Amselem, an education policy analyst at the conservative Heritage Foundation think tank. “It’s so politically contentious, but there is an appetite for it.”

House GOP higher ed bill moves ahead, despite cries to slow down

The 590-page bill has already cleared a key committee in the House and could receive a floor vote early this year. Sen. Lamar Alexander (R-Tenn.), chairman of the Senate education committee, has said he would like to have a Senate version ready for debate and amendments in March. Policy experts anticipate Alexander will work with ranking member Sen. Patty Murray (D-Wash.) to craft legislation, given their bipartisan approach to reforming K-12 education.

But after several years of lawmakers promising to tackle the higher education law, which has remained largely untouched for nearly a decade, some are skeptical much will be accomplished this year.

“Senate reauthorization discussions will continue inconclusively, since current law will be vastly superior to anything the GOP could offer for students,” said Barmak Nassirian, director of federal relations and policy analysis at the American Association of State Colleges and Universities, a trade group.

Borrower defense and gainful employment: The U.S. Department of Education is in the early stages of rewriting two regulations the Obama administration said were needed to protect students who rely on federal funding to pursue a degree. It took years to produce the gainful employment rule, which withholds student aid from career-training programs if too many graduates cannot earn enough money to repay their loans. For-profit colleges have fought the mandate, claiming it unfairly targets their sector. Student advocates suspect the Trump administration, which has already delayed enforcing the rule, will hastily create a watered down version — to the benefit of the for-profit industry.

Many anticipate a similar approach to the borrower defense to repayment statute, which erases federal loans for students whose colleges used illegal or deceptive tactics to get them to borrow. The decades-old rule was revised last year to simplify the claims process and shift more of the cost of discharging loans onto schools. Education Secretary Betsy DeVos said the revision created a muddled process that put taxpayers on the hook, and as a result, policy analysts suspect the new rule will limit loan forgiveness. The department is already moving in that direction by granting partial debt relief to people who have filed claims under the existing law.

Betsy DeVos takes action on backlog of student debt relief claims

“I think they will write a gainful rule that only has disclosures and no accountability, and a borrower defense rule that makes it basically impossible for anyone to ever get relief by requiring victory in state court. And will be quickly sued on both” regulations, said Ben Miller, senior director for postsecondary education at the left-leaning Center for American Progress.

DeVos and the department are already being sued by multiple state attorneys general over the handling of both regulations.

Pell Grant funding: The federal program hit a high note last year when Congress agreed to award grants to low-income students throughout the year, instead of just the fall and spring semesters.  That way, students can take a full load of courses year-round, earn a degree faster and avoid taking on a lot of student debt. But lawmakers nevertheless sapped billions of dollars out of the program’s reserves, a trend that education organizations worry will continue this year.

Pell Grant award to rise, but program reserves remain in jeopardy

Michelle Asha Cooper, president of the nonprofit Institute for Higher Education Policy, said she hopes the forthcoming Senate higher education bill will take some steps to strengthen the Pell program.

“By enriching the Pell Grant, improving its purchasing power and indexing annual increases to inflation, federal policymakers can help our neediest students afford a college education without shouldering costs through burdensome loans,” she said.

State investment in higher education: Policy analysts anticipate that some states will flatten or dial back funding for higher education in anticipation of lower tax revenue because of the new federal tax law. Though the impact of the law may not be felt for another year in some cases, the cap on state and local tax deductions could eventually place a strain on state budgets and, in turn, state schools

Critics of the tax overhaul say it could raise taxes overall for people in high-tax states such as New York and California, placing pressure on states to hold the line or cut their own taxes to compensate. Less revenue means less appropriations. Cutting funding to public colleges and universities has been a popular solution in times of revenue constraints because schools can raise tuition to offset the loss of state dollars.

Public service loan forgiveness: Congressional Republicans and the Trump administration are determined to end this federal benefit for future public sector workers. The GOP higher education bill took a page out of the 2018 White House budget by calling for the elimination of the loan forgiveness program, which wipes away federal student debt for people in the public sector after they have made 10 years’ worth of payments. Though the bill is a long way from becoming law, Congress could take other steps to scrap the program through budget reconciliation for fiscal 2019.

The Senate can pass a bill that affects mandatory spending with a straight majority instead of the typical 60 votes to overcome a filibuster. That matters because the public service program is funded out of mandatory money that Congress could eliminate or reduce with a simple majority, Miller said. So far, Congress has not produced reconciliation instructions for higher education and the Senate has shown no interest, but it is not out of the question as the process could play out in the spring.