The U.S. Needs a New (and Improved) Higher Education Act

(Bloomberg View) -- There's little doubt that the Higher Education Act, which affects more than $120 billion in annual federal spending, needs an update. Less clear is whether Republicans' proposed reforms will do more harm than good.

The law, last revised a decade ago, sets the conditions under which federal student financial aid is disbursed. It is the government's primary tool for preserving access to higher education, holding universities accountable and ensuring that taxpayers receive a return on their investment. Since 2008, the college student population has grown by more than 1 million -- while Americans' federal student-loan debt has doubled. College students are older and more likely to attend part-time or enroll in online programs, yet federal policy remains geared toward a narrowing slice of the population.

So the revised legislation needs to meet some core objectives. It should make applying for financial aid simpler and easier for low-income students. It should broaden the range of programs eligible for federal financial aid, to include more non-traditional, skills-based programs that provide an alternative to a four-year degree. And it should create a system for aggregating student-level data on the salaries and debt levels of college graduates, broken out by school and major, and make that data available to the public.

In December, the House Education Committee approved along party lines a Republican-drafted bill that contains some useful innovations. It doubles funding for work-study programs, increases support for apprenticeships and streamlines the notoriously complex Free Application for Federal Student Aid (FAFSA).

Other aspects of the bill, however, don't count as improvements. Among other things, it ends the loan-forgiveness program for college graduates who enter public service. It also would accelerate the ill-advised rollback of regulations on the for-profit college industry. When the Senate considers the bill, it should remove or scale back these provisions.

The prospects for a bipartisan deal may seem slim: Democrats are loath to give the White House legislative victories in an election year, while Republicans are showing increasing antipathy toward institutions of higher learning. But both parties have an interest in creating a post-secondary system that's more equitable, accountable and cost-efficient -- and in showing voters that lawmakers can still work together for the common good.

--Editors: Romesh Ratnesar, Michael Newman.

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