Washington Update Focuses on Funding and Policy Changes:

with host Dr. Drumm McNaughton and guest Tom Netting | Changing Higher Ed Podcast 081

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Washington Update Focuses on Funding and Policy Changes

The Washington update, as U.S. policymakers continue to maintain a frenetic pace as the new administration passes the 100-day mark, has significant ramifications for higher education. These include additional federal relief funding and a focus on using these funds wisely. Accountability, student loan debt, and online education remain on the docket. In addition, the U.S. Department of Education’s top roles are slowly being filled and the department has announced new rounds of Negotiated Rulemaking.

Pandemic Relief for Higher Education

Congress is focused on the passage of the Build Back Better plan, which is the Biden Administration’s proposal to deal with the coronavirus and the economy.  This plan includes three initiatives:

  • The American Rescue Plan, which was enacted in March, offers $39.6 billion in new funding for higher education, including significant new funding for the Higher Education Emergency Relief programs for both institutions and students. Congress continued to provide the higher education community with institutional and student grants, while students at proprietary institutions received emergency grants. Congress originally was not going to providing funding for students, but discussions that pointed out the pandemic’s impact across the entire college student population led Congress to agree that students needed continued protection. When this package is included with the two previous financial support projects, over $100 billion in additional funding has been earmarked for higher education.
  • The American Jobs Plan, which has not passed yet, also may provide funds for colleges and universities. The pandemic has caused significant job losses across the economy, so many individuals are using this time to re-hone or acquire new skills. This plan focuses on workforce investment as well as targeted investments at community colleges and minority-serving institutions of higher education. This plan also would allocate significant funding for dislocated workers as well as infrastructure funding to help community colleges increase their bandwidth if they are at capacity, as well as for facilities to expand capacity into emerging vocational areas.
  • The American Family Plan, which also may provide funds for colleges and universities, would provide significant funding–$63 billion—that would be used to support student outcomes, retention increase, free community college, and other targeted funding priorities.


With respect to higher education policy, both the House and Senate are focused on workforce issues and recovery from the pandemic. This approach examines where jobs exist currently as well as emerging areas where individuals can reengage / reemerge in the workforce. Much of this discussion involves certificate, diploma, and credential-level programs, instead of the traditional associates and baccalaureate degree programs. These shorter-term programs are believed to help students access the workforce more readily. Higher education leaders can use this funding to expand their institutional foci to include workforce training through creating certificates, diplomas, and credential-level programs.

While policymakers are not jettisoning traditional college degrees, they are discussing extending Pell Grant eligibility for short-term programs while supporting considerable funding for community colleges and a broader group of individuals. Policymakers also want to provide additional STEM funding for institutions that traditionally serve minorities.

Investment in Higher Ed

Policymakers’ decision to create these emergency funds does not suggest the country is moving toward socialism. Education has been underfunded for a while and this investment is needed. Having said that, there never has been $100 billion in emergency spending for higher ed before, but there has never been a pandemic like this one.

Some question whether this money will be well spent. There will be intense scrutiny into how this funding is used, especially in that they also need to use this money to create a new vision instead of returning to the previous way of operating.

However, this is a departure from previous thinking, in that this funding focuses on institutionally-driven spending as opposed to student-driven access to funding, i.e., funds that enable students to choose the institution and program that best meets their needs.

Additionally, the funding does not span the entire spectrum of higher education. While community colleges benefit, others – such as a large number of private, non-profit institutions – will not see the same type of benefit.

The proprietary sector also is set aside in a number of these proposals. The American Rescue Plan created reforms on the 90-10 Rule that will potentially limit these institutions’ ability to serve the U.S. military and other populations.

Online Education

Higher education has reached a tipping point for online education, now that institutions had to adopt hybrid methods of education delivery during the pandemic. The pandemic has forced many entities the opportunity to consider what hybrid or online education looks like. This evolution includes areas such as the skilled trades, which have not considered this approach before but are ripe for innovation.

Moving forward, an increased emphasis on online education, innovation, and adaptability will continue. Regulations and statutes need to support this direction as institutions begin improving the actual delivery.

Relief Funding Accountability

Congress’s current focus is helping the nation emerge from the pandemic. However, oversight and review of the funds allocated through upcoming legislative relief packages will increasingly be viewed through a lens of accountability.

The first year of Higher Education Relief Funding is concluding while two more rounds are starting to come forward. These funds will run for another two years, giving time for policymakers to oversee these funds to ensure that they are used as an investment instead of frivolous expenditures.

Education Appointments

The Education Department’s top officials – Dr. Miguel Cardona as secretary and Cindy Marten as deputy secretary – are in place. However, numerous key positions have not been appointed yet. For example, a nominee has not been named for the department’s Office of General Counsel. This is a key position since all regulations must run through this office; without this individual in place, the department is in a precarious position to try to move forward.

Additionally, James Kvaal has been nominated to serve as the undersecretary for higher education, and currently. He has a deep history on Capitol Hill, the Biden team, and the private sector. He is going through the Senate confirmation process and is expected to be confirmed this week or next.

However, a contentious hearing process may be expected for Catherine Lhamon, who is nominated for the assistant secretary for civil rights. She is a strong advocate for the positions she believes in; however, her strong will and presence have previously ruffled feathers among Republicans. There is a question about whether she can move forward in the policymaking role in a way that crosses the partisan divide, especially in the current climate of heightened race relations and cultural divisions as well as with potential changes being considered for the Title IX regulations.

Regulatory Updates

The Department of Education has announced two sets of Negotiated Rulemaking, including one focused on Title IX. This involves four-day virtual hearings to seek feedback through virtual hearings on current regulations and what is proposed. A great deal of interaction is expected in relation to the Title IX virtual hearings. From a school perspective, the proposed policy changes could involve a total about-face on the Trump Administration’s previous rules, especially in relation to protecting victim’s rights.

Additionally, numerous issues around broader Title IV financial student aid are being reviewed. These areas include student loans, public student loan forgiveness, disability protections, numerous accountability provisions on the proprietary sector, and additional information on outcomes and institutional quality indicators.

Many think tanks note that for far too long, data was not available to gauge the quality of education beyond “gainful employment” and cohort default rates for student loans. Now that the outcomes data is available, the College Scorecard gives the Department the capacity to assess all institutions, especially when CS 2.0 comes into existence. This could be included in accreditation at some point.

Three Recommendations for Higher Education Leaders and Boards

  • Loan debt cancellation is on the table. This is the proverbial football that is being pushed between Congress and the Biden Administration. This could potentially relieve at least $50,000 in student debt although Biden’s original proposal was $10,000. Many economists wonder whether this relief would truly help people in low socio-economic circumstances.
  • Institutions need to focus on cybersecurity. The Biden Administration will carry forward the Trump Administration’s work in this area to protect student information. This will require institutions to have a much broader and in-depth IT protection system at the institution.
  • In 2023-24, the FAFSA simplification legislation will go into effect. This policy change involves limiting questions on the FAFSA application and changing determinations of how estimated family contributions and needs analysis will be done. This move will change—and expand—Pell eligibility. Additionally, this new system will have to develop eligibility criteria in the future.


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

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