Higher Ed Stimulus, Accountability, Affordability, and Enrollment:

with Dr. Drumm McNaughton and Ted Mitchell | Changing Higher Ed Podcast 072

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Higher Ed Stimulus, Accountability, Affordability, and Enrollment

The higher ed stimulus package is finding its way through Congress, and it is a bellringer for accountability, affordability, and enrollment challenges that are on the way. While the main issue the college and university presidents and boards face will remain COVID-19 relief for the near future, the Biden Administration is focused on helping higher ed institutions with critical funding for COVID-related items and students, as well as unraveling some of the policies created by the Trump Administration. The podcast features Dr. Ted Mitchell, president of the American Council on Education and former undersecretary of education for postsecondary education policies and programs in the Obama Administration.

Higher Ed Stimulus and COVID Relief

The Trump Administration provided important assistance to support higher education in relation to COVID. The Biden team also has created a higher ed stimulus and COVID relief package that is projected to bring $40 billion to higher education, as well as providing funds to state and local governments. This combination is important to consider because a large portion of money available to state higher education comes through state governments, which are currently struggling. State policymakers face outlays of funds for healthcare, including testing, providing PPEs, and supporting essential workers, that are over and beyond their normal expenditures.

While the relief package will provide a large amount of funding to higher education, many think more funds need to be made available. Some believe that the funding that is really needed by colleges and universities is approximately $100 billion. Without this higher level of funding, there will be expenses and debts that will need to be paid far into the future.

The lack of sufficient federal funding could exacerbate the tenuous financial situations that many colleges and universities are currently facing. Many institutions who were already struggling financially now are faced with moving instruction online, thinning out and/or closing residence halls, increasing COVID testing, and providing PPEs to faculty, staff, and students. On the other side of the equation, the longer that higher education institutions are closed or remain semi-closed, the longer institutions’ financial crisis will continue.

At least 75% of higher education CFOs are quite concerned about their institution’s finances. In ACE’s monthly poll, CFOs said their top concern is the physical safety of their community while the second is the mental health of the community. The third issue that they identified is finding the money to pay for all the support that will be needed going forward.

Mental Health is an Issue

Mental health has become increasingly important to deal with. COVID-19 has created stress on individuals both in their private and work lives.  People who are sequestered at home are facing increasing pressures to try to navigate their lives.  

There also has been a disproportionate impact on the mental health and lives of women in the United States. Many have withdrawn from the workforce to do the heavy lifting for their families. For some women who are single mothers, the situation has been extremely detrimental to their ability to participate in the labor force and has significantly increased their stress.

Students who are 21- or 22-years-old also are facing the stress of being thrown back into their homes of origin. This creates a tough road for these students as they try to deal with family issues while pursuing their studies and trying to find internships or jobs after graduation.

Many institutions, such as Texas A&M University, Paul Quinn College, and Amarillo College, have bent over backward to help students during the pandemic. Many of these institutions have made their mental health resources available 24/7. When the story of this pandemic is told, many heroes in both large and small higher colleges and universities will emerge who have focused on supporting students. It is important for each institution to recognize these individuals who are making a heroic effort.

Affordability and Access

In other critical higher education policy news, the Biden Administration is planning numerous initiatives addressing student affordability and access. For example, free college continues to be discussed and has the support of the First Lady, Dr. Jill Biden. The administration also is considering doubling Pell Grants to assist more low-income students so they can pursue a college degree at a lower cost. If the Pell Grants are doubled, this would essentially make community college free.

Debt relief also is on the table. People are struggling economically during the pandemic, so student loan debt relief could be helpful. Many individuals who default on student loans share two characteristics—they never graduated from college and they owe less than $10,000. Therefore, a means test for student loan relief could alleviate a lot of pain for many people without the moral hazard of giving away free money to those who may not need it.

Accountability and Transparency

Accountability and transparency also are high on the new administration’s radar. The idea of the college scorecard was first introduced during the Obama Administration. The Trump Administration wanted to add program information to the scorecard. The Biden Administration also may support this metric’s inclusion to support students who have a broad range of choices of where to attend college.

Metrics should include graduation rates, the length of time to finish a degree program, and the average income that graduates once they finish their degree and enter the workforce. These measures are easy to collect and should be made available to students as they approach college. However, other data can be difficult to gather since this information is stored in departments across the federal government and is subject to different regulations.

Additionally, the Biden Administration may reintroduce the metric of gainful employment, which is both a department regulation and in statute. This metric is based on the belief that career colleges should provide an education that allows students to pay back their loans. A ratio of income to student loan balance is one of the ways that the U.S. Department of Education calculates this metric.

Diversity, Equity, and Inclusion

The new administration is considering changes to DACA, which will help the Dreamers. Additionally, there may be a push to focus on disaggregating results to get a better idea of what is happening in an institution. For example, a university’s graduation rate is one number, but disaggregating that measure to assess how each race, ethnicity, and income group is doing academically will help leaders ensure that students finish their education in an equitable manner.

However, equity’s definition should not be limited to race, ethnicity, and income group. Higher education is becoming much more diverse. The average student is no longer an 18-year-old who is dropped off by parents and then picked up four years later with a degree. Instead, the average college student today is 26. Numerous students are turning to education to retrain and retool for employment reasons, often due to the current turbulent economy. Many are attending community colleges and often these are single moms or returning veterans.

These changes require opening the higher education system up wider to bring in people from a more diverse set of backgrounds. Important changes in Pell Grant and the student loan program are needed to better serve students who are not attending a residential, traditional time-bound program.

American higher education also needs to rethink the idea of lifelong learning. While opportunities exist at the higher education level to retrain and retool to get a higher-paying job happens, the U.S. or individual states do not have a robust retraining program. While small pots of money exist in various U.S. federal departments, this is a drop in the bucket when compared to many European countries that have a retraining track. This is where the Biden Administration’s proposal that increases the importance of community colleges is heading.

To be able to create this retraining track, community colleges need to have a strong conversation with those in their local labor market to start to create a win-win environment.  Community colleges need to know which jobs are leaving town and which are coming into town. They need to work in partnership with industry to promote the skills that are going to be needed, not the ones that were needed for yesterday’s jobs.

Additionally, community colleges need to be in discussions with four-year institutions to help make the transition process smoother for students who wish to pursue a bachelor’s degree. There needs to be a real emphasis on transfer so that community college courses will count for a bachelor’s degree.

Preparing for the Enrollment Cliff

Higher education still faces an enrollment cliff based on the downward trend in the number of 18-year-olds. However, it is important to note that only about half of these individuals opt to attend college.  Therefore, institutions can employ numerous strategies to boost enrollment, including:

  • Deepen the college-going rate among high school graduates. Keep the lid on college costs, work with the government to increase student aid, and simplify the application processes to support low-income students. Communicate better with high school guidance counselors.
  • Look at college retention rates. Only 50% of those 18-year-old students who go on to college finish their degree. Many of these students do not develop a strong personal connection to a faculty member, mentor, coach, or tutor. Institutions need to develop efforts to support persistence, which include nurturing mental health through showing caring, support, and the ability to listen.
  • Many Americans do not fit into the traditional college student profile but need and want a higher education. Thirty-eight million Americans have some college but no degree. Institutions should go back to these individuals and help them finish their degrees.

Other Federal Issues

Over the next two years, Negotiated Rulemaking (Neg Reg) and HEA will be the subject of discussions; however, this work is expected to be at a lower policy level. The Biden Administration also is expected to make changes to gainful employment and Title IX.

Three Recommendations for Higher Education Leaders and Boards

  • The pandemic has demonstrated the importance of in-person, personal attention. College presidents need to remember the need for this type of attention when students return to campus. This includes prioritizing the non-classroom experience for all students.
  • The calls for social justice that were amplified in 2020 need to remain front and center. Colleges are pivotal to creating the muscle that will help society become more diverse.
  • There are some things that can be done better with technology. Higher education has learned that using technology, including online classes, does not ruin the world.


Dr. Drumm McNaughton provides strategy and change management consulting for higher ed institutions. 

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