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 AACC 2013 Federal Public Policy Issues 

1/11/2013

Dear AACC Member:

What follows is a discussion of some of the major issues in which AACC’s government relations staff expect to be engaged in 2013. It should be a busy year.

Although this document is far from comprehensive, we hope that it will help you better understand some of the major public policy issues that will be discussed in Washington, DC, this year that could affect your campus. We surely will be asking for your help as we work on these and other issues in the coming months.

Thanks for your continued involvement with AACC.

David Baime
Senior Vice President for Government Relations and Policy Analysis

PELL GRANT PROGRAM

The Pell Grant program remains the single most important federal program for community college students, and hence their colleges. In recent years, Pell’s importance has grown as budget cuts have pushed tuitions upwards and many students have found themselves with fewer resources. In the 2011–2012 award year, 3.35 million community college students received Pell Grants, totaling $11.2 billion. In the 2009–2010 award year, 48% of all full-time community college students received a Pell Grant—a stunning figure.

Pell Grant program funding increased by 106% between FYs 2006 and 2010 and now consumes more than one third of the U.S. Department of Education’s (ED) total budget. For the most recent award year, however, program costs declined by about 6%, or $2.2 billion. Part of this was due to congressional and regulatory activity, particularly concerning the for-profit industry, whose students’ overall share of funds dropped from 25% to 21%. In any case, these reduced expenditures are a relief to congressional appropriators and others who are concerned about the fiscal health of the program.

Those who follow the program know that in the last 2 years, Congress has cut Pell Grants to lower program costs. These changes have been driven in part by Congress’s desire to maintain the maximum appropriated grant, both for political reasons and because doing so triggers an automatic inflationary increase provided through mandatory funding. Unfortunately, the program changes have negatively affected community college students. The cuts include eliminating the year-round Pell Grant (a program feature that AACC was in the forefront of advocating for in the first instance), terminating eligibility for ability-to-benefit students, and limiting to 12 semesters, from 18, the period during which a student can receive a Pell Grant.

Pell Grants are a success story, with strong bipartisan support, but they are now the subject of intense scrutiny, in large part because of their cost (even in Washington, $35 billion is a lot of money). In the upcoming HEA reauthorization, program changes will be advanced that would negatively affect the least-well-prepared students, and, possibly, the institutions that serve large percentages of them. Community college advocates will need to be vigorous in explaining and, wherever possible, documenting the critical role that the grants play in the success of their students.

HIGHER EDUCATION ACT REAUTHORIZATION

The Higher Education Act (HEA) is the single most important piece of legislation affecting community colleges and their students. The legislation authorizes (as opposed to funds) Pell Grants, Stafford Loans, Federal Work-Study, and an array of hugely important institutional grant programs, including TRIO, GEAR UP, Title III-A, Title V, predominantly Black institutions, and international education. The HEA was last reauthorized in 2008. The next reauthorization is scheduled for completion by 2014, assuming an automatic 1-year extension. The reauthorization process, at least in the form of hearings, will get underway next year.

It seems extremely likely that the reauthorization will involve a broad critique of higher education, as well as major program changes. In a way, this is simply because policymakers realize that college has become too important and faces too many challenges and changes for the HEA to be left as is. Also feeding the likelihood of significant modifications to the HEA is increasing public awareness of the role of higher education in economic well-being, along with skepticism about the system’s performance; the broad political popularity of student aid funding, with ongoing pressures in some quarters of Congress to reduce that funding; large and growing amounts of student debt, which has become a prominent national issue; and the strong sentiment in many think tanks and prominent foundations that the student aid programs should be used to leverage better results from higher education, however they might be defined. The committees with jurisdiction over the HEA asked many tough, but fair, questions about colleges and universities in hearings held in 2012. And so, the higher education industry is most definitely in Congress’s cross-hairs.

But it also should be recognized that, by design, the federal government does not have an easy route to becoming involved with the actual provision of higher education. Historically, the federal government’s primary role is in providing financial assistance to students, and over 90% of HEA funds are spent on this purpose. Clearly, the federal government has an obligation and interest to ensure that taxpayer funds are spent appropriately. But AACC may devote a good deal of its energies in pursuit of policies reflecting the fact that the delivery of education by community colleges is primarily a state and local responsibility, and that institutional autonomy has played a key role in the success of American higher education.

WORKFORCE INVESTMENT ACT REAUTHORIZATION

The Workforce Investment Act (WIA) was initially enacted in 1998 and has never been reauthorized. Its first reauthorization was scheduled for 2004. Since that time, a variety of legislative vehicles have been proposed, and some have cleared their respective chambers, but conference legislation has never been hatched. This lack of success is curious given the fact that the programs are relatively small and that their manifest purpose—to adequately prepare the American workforce—is a goal that all can agree to (even if they do not necessarily agree what the federal government should do to foster that). Past measures have been sidetracked by tangential policy debates, such as disagreement over funding for religious institutions that use faith as a hiring criterion. Impetus for reauthorization has also taken a blow with Senator Mike Enzi (R-WY), ranking member of the Senate HELP committee and a vocal champion of WIA reauthorization, having to give up that slot because of Republican term-limit rules.

The overriding shortcoming of the WIA system is thoroughly inadequate funding. The core WIA programs receive barely more than $2 billion annually, about 6% of what is spent on the Pell Grant program alone. In fact, Pell Grants fund far more job training, particularly at community colleges and for-profit institutions, than WIA can ever hope to provide. The fundamental effectiveness of the WIA framework, which is a curious mix of decentralization within some highly prescriptive centralized requirements, simply cannot fairly be judged with such anemic resources.

Insufficient funding also makes it that much harder for the many stakeholders in the WIA system to reach consensus on how existing resources should be directed. Funding increases of any magnitude seem quite unlikely. The only significant infusion of funds in the WIA programs occurred in the American Reinvestment and Recovery Act, a one-shot deal.

Despite the continued gridlock over the WIA reauthorization, there is much common ground over how the law should be altered. This includes the desirability of reducing the number of job training programs, a long-standing goal of conservatives but one gaining support among a broader array of lawmakers. Simplifying governance is also broadly supported. More effectively incorporating business in the WIA system is a common priority. Enhancing training within the system is also popular.

AACC has a detailed WIA reauthorization position, although it is clear that the law’s benefit to individual community colleges and their students varies widely from place to place, sometimes at colleges that serve contiguous areas. In any case, much of the proposed legislation has reflected at least some of AACC’s priorities, which include the following:

• Authorizing President Obama’s $8 billion Community College to Career program.
• Reduction or elimination of eligibility requirements for community college career and technical   education programs.
• Use of existing community college services wherever appropriate.
• More emphasis on contractual training, in part to provide full cost recovery for colleges and to ensure more stable funding.
• Expedited training referrals where indicated.
• A strong and guaranteed role for community colleges in WIA governance.

CARL D. PERKINS ACT REAUTHORIZATION

The Perkins Act’s current authorization expires at the end of September, and Congress is expected to start, but not likely finish, the process of reauthorizing the legislation this year. The last reauthorization, completed in 2006, was a bipartisan process, and hopes are that the upcoming reauthorization will be bipartisan as well. Support for Perkins funding has been relatively bipartisan, at least in comparison to WIA program funding, which bodes well for reauthorization.

The most significant development in the Perkins reauthorization discussions to date is last April’s release of ED’s Investing in America’s Future: A Blueprint for Transforming Career and Technical Education. The blueprint lays out a number of recommendations categorized under the themes of alignment, collaboration, accountability, and innovation. Throughout the document, there is a significant emphasis on extending the development of many concepts that were stressed in the last reauthorization, such as stronger collaboration between high schools and postsecondary institutions and a sharper focus on high-demand occupations. Two of the recommendations that have received the most notice include the proposal to distribute funds within states on a competitive basis only to consortia of institutions and for a state matching fund intended to drive stronger business involvement with CTE programs.

Whatever the congressional reaction is to the particulars of ED’s proposal, many of the issues and themes that ED has identified in its blueprint will be at the center of discussions moving forward. AACC will continue to advocate for a robust Perkins program that serves the needs of all types of CTE students and maintains the flexibility that allows community colleges to creatively and effectively deploy their Perkins funds. In the early months of this year, AACC will continue the work of developing a detailed set of Perkins reauthorization proposals.

DOMESTIC DISCRETIONARY SPENDING: PROTECTING FEDERAL INVESTMENT IN COMMUNITY COLLEGES

AACC endeavors to provide funding for programs of interest to its members through advocacy focused on the broader federal budget. In this context, it is important to keep in mind that, in many respects, the federal government has two discrete budgets. The first and largest covers mandatory spending. These are programs such as Social Security and Medicare that operate indefinitely according to specific statutory criteria, unless Congress acts to change them. The other budget consists of discretionary—or annually appropriated—programs, which  fall into two categories—defense programs and non-defense discretionary (NDD) programs. The latter represent about 15% of the federal budget and include virtually every program of interest to community colleges. They also include the broadest range of investments at home, including housing, mass transit, environment, health research, justice administration, and energy assistance.

In the budget battles of the last few years, NDD spending has fared poorly relative to other components of the budget. In particular, the 2011 Budget Control Act (BCA) dramatically reduced the amount of NDD spending that Congress could appropriate over the next 10 years through the imposition of a statutory cap. In the BCA, Congress simply lowered the overall amount of appropriations that could be provided for this purpose over the next 10 years without naming which individual programs would be cut, leaving the 12 appropriations subcommittees to do the messy work. From a policy perspective, AACC believes that reducing funding for the category of spending that includes higher education and job training is extremely short-sighted. Things could get even worse: In FY 2011, NDD spending represented 3.1% of U.S. GDP; President Obama has proposed reducing that to 1.7% by FY 2022, and last year’s House budget resolution set a target almost as low.

Community colleges have a vested interest in making domestic discretionary spending a priority. AACC has joined in with a broad coalition advocating for this spending. A broad budget deal, unlike the fiscal cliff deal that focused primarily on taxation, could ultimately free up some funds to provide for the critical category of NDD spending. But it will have to be made a priority by congressional leaders and the president for this to be accomplished. A likelier outcome is sustained pressure on annual program appropriations that are spent on AACC priorities.

VOLUNTARY FRAMEWORK FOR ACCOUNTABILITY AND BROADER POLICY IMPLICATIONS

The community college Voluntary Framework for Accountability (VFA) will soon be ready for broad institutional participation, lending urgency to creating greater consistency between that system and other accountability and reporting frameworks. Forging better alignment between the VFA and other accountability systems is also a high priority for one of the implementation teams of the report by AACC’s 21st-Century Commission on the Future of Community Colleges, Reclaiming the American Dream: Community Colleges and the Nation’s Future.

The work to be done is daunting, although steady if incremental progress continues to be made. At the federal level, AACC has been active in providing input to ongoing ED panels that are considering changes to the student graduation and progress measures reported via IPEDS. These changes include incorporating part-time students in the required reporting and in creating a new cohort for transfers-in. In addition, Congress will undoubtedly be modifying the student right-to-know completion rate calculation and the related IPEDS reporting requirements concerning the reporting of student completion rates. The latter were extensively modified in the most recent 2008 HEA reauthorization, but, oddly, the Student Right-to-Know and Campus Security Act has not been modified in any significant way since it was initially written in 1990. The law is antiquated and needs to be changed.

The full shortcoming of the student right-to-know calculation is illustrated in a recent report issued by the National Student Clearinghouse (NSC). NSC’s data show that 6 years after students entered a 2-year public institution, graduation rates for community college students were much higher than commonly perceived or reported: More than half (52.6%) of all full-time community college students graduated from a postsecondary institution within 6 years, and another 4.1% were still enrolled. This is dramatically better than the official student right-to-know graduation rate of 22.3% and certainly a more accurate reflection of the performance of community colleges. It also illustrates why the stakes are so high for the new graduation and completion rate calculations.

Federal policymakers also must play a more active role in ensuring that more labor market data, particularly those on the earnings of former students, are made available to community colleges through one means or another. More colleges are gaining access to these data, but the overall system has substantial shortcomings. Until this gap in the overall accountability framework of higher education is addressed, community colleges and other institutions will be hobbled from adequately assessing their performance. Addressing this situation remains a top AACC priority along with promoting more comprehensive longitudinal tracking systems.

AACC will also encourage accreditors to rely on the VFA measures where appropriate. Accreditation will inevitably receive careful scrutiny in reauthorization and the accountability metrics that are part of the VFA may figure in any standards accreditors are asked to uphold. At the same time, AACC will continue to emphasize the importance of accreditation’s basic function as a voluntary self-regulation.

STUDENT BORROWERS

Community college officials have long sought to make borrowing a last resort for students. However, increasing tuitions and the greater availability of loans has led to greater borrowing. Approximately 36% of all associate degree awardess have taken out loans, at an average amount of $9,160. Nevertheless, only 11% of all new subsidized Stafford loans go to community college students.

The nature of community college student borrowers—often low-income and statistically at risk—combined with a relatively small usage of loans compared to students in other sectors has long made it challenging for AACC to effect federal loan policies tailored to its sector. AACC continues to hold that institutions should have the discretion to lower loan amounts for broad categories of students, such as first-time students in need of developmental course work. Also, AACC believes that the percentage of students borrowing should be directly factored into default rates and that appeals under the statutory participation rate index (which give colleges a break if they have relatively few borrowers) should be easier to access and better publicized.

None of this changes the disturbing reality of high default rates among community college students, which continue to rise. For the most recent cohort, the official 2-year cohort default rate was 13.3%, which fails to capture many defaulters and so is artificially low. The 3-year rate, which also overlooks many defaults because of its limited window, was 18.5%—almost one out of every five borrowers. This figure is unacceptable, and AACC is committed to seeing it lowered. The Obama administration's Pay as You Earn Repayment Plan provides borrowers with readily accessible means of avoiding default, but the framework can result in large amounts of interest being paid as capital accrues. Furthermore, the program provides massive subsidies to relatively affluent, high-volume borrowers, particularly for graduate and professional education, and is being questioned by prominent analysts.

NURSING

Nursing education at community colleges continues to match the nation’s evolving health-care workforce needs. This now often includes pressure from employers, predominantly in urban areas, for registered nurses (RNs) who either hold or are working to attain a bachelor’s degree in nursing (BSN). In August of last year, AACC and four other major organizations, including those representing 4-year institutions as well as the Association of Community College Trustees, endorsed a statement strongly supporting academic progression in the nursing profession. AACC supports relevant academic progression for all community college students, but in the case of the nursing continuum this is particularly important, given the increased demands for BSN nurses. At this point, 19 community colleges confer the BSN.

At the same time, AACC continues to emphasize the value of the associate degree in nursing (ADN), for which basic policies and approaches will remain unchanged in 2013. From AACC’s perspective, the ADN should remain a benchmark academic credential necessary for practice as an RN throughout an individual’s career. There remains no compelling evidence that RNs practicing with an ADN are less competent than those holding a BSN. Therefore, AACC will continue to devote significant resources to helping members address proposed policy changes relating to this issue, and in generally defending the integrity and value of the ADN.

AACC also will continue to work to generate greater federal support for community college nursing and allied health programs. Community colleges have long been shortchanged in the competition for resources, particularly those available through the Public Health Service Act programs.

IMMIGRATION/THE DREAM ACT

The national political debate over immigration was dramatically altered with the November elections. With President Obama capturing 71% of the Hispanic vote in his reelection victory, there is broad agreement that the Republican Party needs to change its stance on immigration and related issues in order to compete more effectively at the national level.

Shortly after the elections, two prominent Republican legislators, outgoing Senators John Kyl (R-AZ) and Kay Bailey Hutchison (R-TX), proposed a version of the DREAM Act called the Achieve Act. While their bill was less far-reaching than previous legislation in this area, it marked a break from the Republican Party's recent approaches to the issue. In addition, Senator Marco Rubio (R-FL), a possible 2016 presidential contender, also proposed his own version of the DREAM Act earlier in 2012. On the other hand, at least some congressional Republicans remain staunchly opposed to any such reforms to immigration policy, so a transformation of the party’s approach to this issue will not come easy.

On the Democratic side, President Obama has indicated that comprehensive immigration reform is a top priority for his second term. This commitment may derive in part from loud dissatisfaction in some quarters about a perceived lack of commitment to this issue in his first 4 years. A strong version of the DREAM Act would almost certainly be a part of any such comprehensive legislation. In summer 2012, President Obama issued an executive order that defers deportation of DREAM Act–eligible students, but that could always be reversed and does not offer the path to citizenship that the DREAM Act would.

It remains to be seen whether the stark differences on immigration policy can be surmounted and comprehensive legislation agreed to. If this turns out not to be the case, the DREAM Act would be a logical second-best proposal for parties to agree to, as it has long been seen as the most politically viable of all the major immigration proposals.

TRANSFER/ARTICULATION AND FEDERAL POLICY

Despite areas of progress, the overall state of articulation for many community college students is lacking. Improving this situation is more important than ever, given the increasing value in many occupational areas of academic credentials that go beyond the associate degree. The loss of credits when students enroll in other institutions has not just substantial human costs but also badly damages higher education’s credibility.

National policymakers have been frustrated in their desire to create smoother pathways for students to progress between institutions, given that transfer policy largely falls within the domain of states. (Program articulation between individual colleges or sets of colleges remains of critical value.) The HEA does have an unfunded grant program to support state transfer efforts, as well as an unenforced requirement that states develop articulation agreements for their public institutions.

A major development in transfer came with the introduction of ambitious legislation in this area by Rep. George Miller (D-CA), ranking member of the House Education and the Workforce Committee, in July 2012. Miller’s legislation, H.R. 6135, the Transferring Credits for College Completion Act, was designed to draw attention, and in that it succeeded. Miller’s legislation would require each public institution to have a common general education core curriculum consisting of not less than 30 credit hours or the equivalent course work, fully acceptable in transfer at any public institution in the state; common course numbering for substantially similar courses in such common general education core curriculum; and a guarantee that an associate degree in an academic major in the arts or sciences that is awarded by a public institution in the state shall be fully acceptable in transfer and credited as the first 2 years of a related baccalaureate program at other public institutions in the state. Noncompliance is met with the “death penalty”— the loss of all Title IV student aid.

Although Miller’s legislation raises many practical and policy questions, including how it might be enforced, it illustrates the degree of frustration with the current state of transfer. While not endorsing the legislation, AACC’s board of directors was encouraged that the chief Democratic policymaker in the House was willing to consider dramatic steps to improve the state of transfer. Because of Miller’s interest and other factors, the issue of transfer can be expected to stay front and center in the coming months, including in the upcoming HEA reauthorization.

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