Washington Update: Implications of the 2024 Elections on Higher Ed — Part 1:

Changing Higher Ed® podcast 237 with host Dr. Drumm McNaughton and guest Tom Netting

Transcript: Changing Higher Ed Podcast 237

 Washington Update with Drumm McNaughton and Tom Netting – Pt 1

Introduction to Changing Higher Ed Podcast

David: Welcome to Changing Higher Ed, a podcast dedicated to helping higher education leaders improve their institutions. With your host, Dr. Drumm McNaughton, CEO of The Change Leader, a consultancy that helps higher ed leaders holistically transform their institutions. Learn more at changinghighered.com. And now here’s your host, Drumm McNaughton.

Guest Introduction: Tom Netting

Drumm: Today, we welcome back one of my favorite guests, Tom Netting, president of TEN Government Strategies. Tom has worked in the public policy arena for over 30 years, advocating before Congress, federal agencies, and state governments on behalf of private institutions of higher education and post-secondary education companies.

Tom is a leader in strategic policy development and advocacy, and he joins me today to talk about the implications of the 2024 elections, what we can expect out of a Trump administration and a Republican Congress. Tom, welcome back to the show.

Drumm McNaughton: Tom. Welcome back to the show.

Tom Netting: Drumm I’m happy to be back with you.

Drumm McNaughton: I am glad to have you back. It’s been a very eventful month or so in Washington and I suspect it’s going to get even more eventful as time gets closer to the inauguration.

Tom Netting’s Background and Experience

Drumm McNaughton: So, before we get into all this fun stuff, give our listeners a little bit of background. You’ve been doing this for what, 30 years now?

Tom Netting: Over 30 years since 1989, but who’s counting? Been involved in higher education policy, literally, since the late 80s early 90s. Both from the accreditation side, which is where I started working for one of the accrediting bodies, visiting and reviewing institutions of higher education.

And then prior to the 92 reauthorization of the higher education act in 1991, I started doing advocacy, having worked for Senator Hollings from South Carolina for a period of time. I was tapped to be the junior lobbyist for an organization in higher ed policy back in 1991 and have been doing higher ed policy in one form or fashion ever since.

Drumm McNaughton: Wow, I didn’t realize you’d worked for one of the accreditors.

Tom Netting: I did. I worked for, what at that time was the National Association of Trade and Technical Schools it’s now ACCSC, but it’s one of the now I guess former national accrediting bodies seeing as how we don’t have those monikers of regional or national anymore. But worked for one of them and my aspirations were law school, but I found a passion for representing institutions of higher education and it stuck.

Drumm McNaughton: Well, it’s kind of interesting because that is a really good segue. Law school, elections, all the different things we’re going to talk about today.

Discussion on 2024 Elections and Trump Administration

Drumm McNaughton: So, we have a new, actually it’s not a new, we have an old, and had nothing to do with age, president elect. He’s been in this position before. Donald J. Trump.

Tom Netting: 45 and 47

Drumm McNaughton: So, if we add those, that means 92, which is getting closer to his age. I probably.

Tom Netting: I hadn’t thought about that. That’s a good one Drumm.

Drumm McNaughton: Every once in a while, a blind squirrel gets an acorn. What can we say?

Tom Netting: There you go.

Drumm McNaughton: So, we’re already hearing lots of interesting things. What are we gonna see? What are some of the implications? You’ve been involved with this stuff for 35-40 years now. I didn’t think you were that old, by the way,

Tom Netting: Thank you. I appreciate that

Drumm McNaughton: From an insider perspective. What are you seeing? What is going to happen?

Tom Netting: Very good question and I, like everybody, can’t give you all the answers because I don’t think all of the answers are in front of us yet. But what I can tell you is certainly we’re already seeing a President Trump elect administration that is moving much quicker than they did after the first election, to move forward from 2016 to now 2024.

The opportunity for individuals in the transition team, individuals as nominees to fill the cabinet level agencies, as well as other positions across the entire spectrum of the administration are being announced and moved much quicker then was the case the first time around under the 45th president.

The handling team is a different team. Many people are saying a more seasoned and mature team of individuals that are assisting the President elect the second time around in the establishment of a number of those individuals that are being nominated.

There is, yet again, an interesting set of circumstances around the confirmation process. There are some that suggest that the President will try and circumvent the confirmation process. I’m one that doesn’t believe that the Senate will allow that to happen. One of many prestigious opportunities of the Senate, among others, is the ability to have the confirmation hearings and help ensure the appointment of individuals. So, I truly do believe the confirmation process is going to go through, but as we’ve previously established, he is moving much quicker to put individuals from the Hill and elsewhere, in new places.

Drumm McNaughton: Leading up to the election? We didn’t hear anything out of a transition, period. We didn’t hear anything out of a transition team. And all of a sudden, we’re getting all these names dropped within a month. Yeah, more experienced, but they couldn’t have been doing this, they couldn’t have just started at the election. They had to have been doing this a long time leading up. Does that make sense?

Tom Netting: It does. And you’re right. It was established, Drumm, that there was an inner circle of individuals that was working with the President elect and former President. And I think that team was working quite extensively on looking at how some of this was going to unfold if he were to be elected. You have the transition teams external and then you have the transition team internal.

What I mean by that is there are several different transition teams working, I won’t say independently because they do confer with one another and a lot of the names that you see are on everybody’s docket, if you will. But you know, there were different levels of preparation and planning that went into this with the President Elect. And I think you’re seeing the results of much of that. I will also state that I don’t think, that as stated, I do not believe this was as a result of, the Heritage Foundation’s 2025 agenda. Because you look at a lot of the names, and they are drastically different than the individuals that were there.

Do I think that some of the 2025 strategy is certainly going to be part of the President Elect’s strategy? Of course, some of it is kind of rote. You would expect it coming out of any Republican, GOP incoming President to do some of the planks that are part of that document. But I also do think that, once again, he has a more seasoned group of individuals around him? You look at the announcement of the chief of staff with Susie Wells right off the bat and the Alex’s and some of the other individuals. He’s got a group around him that are looking to and have done a lot of planning and preparation for this.

Drumm McNaughton: You’re also seeing at least one or two people who were authors of sections of Project 2025 being named to various posts. I gotta ask this question, and it’s, probably too broad for this particular thing.

Implications for Higher Education

Drumm McNaughton: Should higher ed be scared about changes coming down the line, or do we want to defer that?

Tom Netting: I don’t think we defer it. I don’t think they should be scared. I think they should be ready to embrace, potentially some significant change, not all of which I think is going to be something that is not receptive of all of higher education. What. I mean by that, Drumm, is we’ve had some stumbles over the last couple of years in the Department of Education, the administration of the past. But yeah, sorry, I was trying to be, I was trying to be polite.

But the reality is that, FAFSA form, the ability to get that information out, the ability to do the fundamental, one of the fundamental jobs of the Department of Education, which is the proper administration of funds to students, i.e., borrowers, has been wanting, and so much so, that for the first time we saw a 9% reduction, year over year, of individuals actually applying for the Federal Student Financial Aid.

That’s not good for any of higher ed. The ability to get that back on track, I think, is something that you’re going to see the new administration focus on and, let’s be honest, something that’s probably needed.

Drumm McNaughton: Well, I have absolutely, having this enrollment drop because of the FAFSA Preceding the enrollment cliff or the demographic cliff, which is going to continue to have less traditional age students there, certainly doesn’t help. There’s legislature that I think Biden has signed already to make sure that FAFSA is ready by October 1st. This is a symbolic, symbolic thing, but is it needed?

Tom Netting: You know, good question. Again, the fact that a polarized Congress, in a polarized nation, unanimously, in both the House and Senate, moved forward with legislation on the October 1st deadline, is, I think, a telling indicator that everybody is looking for some more stability coming forward out of the Department of Education, especially when it comes, in this particular instance, to the ability for both students and families as borrowers, and the institutions they’re looking to go to, to have the tools and the resources they need to determine what institution they want to attend.

Drumm McNaughton: Absolutely. And so what changes do you think we’re gonna see out of a Trump administration with education?

Changes in the Department of Education

Tom Netting: Well first of all, one of the major questions I thought you were going to ask was whether or not we’re going to abolish the Department of Education. I don’t have a crystal ball, but Tom Netting thinks that the answer to that is no. Do I think that there is going to be significant change within the Department of Education? Most definitely. The fact that you have a nominee in Linda McMahon, brought forward as the new potential Secretary of Education, with her business as a former cabinet member in the prior administration under small business, I think is a tell to the fact that they are going to look to run the Department of Education more like a business and more like an administrator of fiscal responsibility to deliver financial aid at the post secondary level, with changes.

I think you’re going to see some efforts to rescale or retool things like public service loan forgiveness and the amount and the types of individuals that are eligible. You’ve heard from both Republicans on The Hill as well as the incoming administration of issues around reconfiguring grant assistance, whether that be FSEOG and Pell being combined or other types of changes.

At the elementary and secondary level, I think it’s important to note and paying attention on the campaign trail, that it’s been reminded many, many times that 90 percent of funding for elementary and secondary education comes from the states and only 10 percent comes from the federal government. I think that aligns with what you’ve heard President Elect say with regards to giving certain things back to the states. Do I think the federal government’s going to get out of elementary and secondary education? Absolutely not. But do I think that there is going to be some, again, reconstruction of how this all plays out? Yes.

Drumm McNaughton: Could you see, and this just popped in my mind, could you see the Department of Education being split into two separate departments.

Tom Netting: I don’t think so, Drumm, but what I do think you’ll see is under the leadership of Ms. McMahon, I think that you can look very directly to what happens as the appointments of the Deputy Secretary and the Undersecretary as the two key determinants of the way elementary and secondary and higher ed in particular are likely to unfold.

Those two positions, the Deputy Secretary has responsibility over elementary and secondary traditionally and much more. The Undersecretary has post-secondary education in the past. In the past is prologue, I think that the people that fill those two positions are gonna have a significant impact on the way in which it goes.

I think that things to look at, give me half a second here, is for the Deputy Secretary, individuals that have had, at the state level, major reforms in elementary and secondary education. Redoing the state level system, could be prime candidates. And at the higher ed level, it’s individuals that have backgrounds and a pedigree within the lending community, as well as higher ed policy,

Drumm McNaughton: that makes a lot of sense and the secretary designee, for lack of a better word, has experience sitting on the board of a higher education institution. But other than that, what education experience either post-secondary or elementary secondary has she had?

Tom Netting: Very little. Again, but if you look at their goals and objectives, that might be again, a tell to the fact that the policy will be driven by the ability to meet the objectives of delivery and administration of the aid and the programs. Again, think of it almost as Miss McMahon has served in several different capacities as leader and the CEO with individuals underneath her, in various different positions, to then be the one to bring about the changes or the directives that are decided upon.

Drumm McNaughton: What do you see changing in the Department, post-secondary? I can imagine title IX is going to get huge changes, the office of compliance, et cetera. What? I’m asking for a crystal ball, which may or may not come true, but you’ve been doing this a long time. You’ve got a real good sense of what potentially could happen.

Tom Netting: Well, I think a lot of things are right for, again, revisiting. And this is partially because of the pendulum that we all know that when different administrations comes in, the pendulum swings from one side to the other, but some of this goes beyond pendulum swings. I do think that there’s going to be a hard look at Title IX, as you brought up.

We have a set of circumstances, as you and I talked about briefly before we got on the actual recording, to have 26 states basically blockading the Title IX regulations as put forward, and 24 states trying to implement them in the new iteration or the new form, is cause for chaos and cause for problems. Nobody knows exactly how to do this.

So, I think that there’s going to have to be a meeting of the minds or at least some type of temperance of where schools are right now in trying to navigate a very complex and very chaotic set of circumstances. I can see the new administration coming in and saying, we’re going to pump the brakes, which candidly after some of the court decisions, many in the higher ed community had hoped they were going to do anyway, and see where that takes us.

With regards to many of the other regulations, we’ll talk later at a probably at a different time about all the court rulings that are out there, but you know, all of those court decisions are yet to have an impact, but we have a lot of regulations that went into effect that are being successfully challenged, whether it be by the lending community, whether it be by sectors of institutions of higher education or others. How the department looks to address those is one of the crystal ball questions I wish I had an answer to. I’m going to be quite honest with you. But things that I think that are also going to be subject to early review are some of the deadlines.

We have a lot of deadlines coming up for the regulations that are in effect, not the ones that they were looking to bring into effect, but things like the gainful employment and financial value transparency regulations. All institutions, not just proprietary or those subject to loss of eligibility, but all institutions are supposed to submit to the Department of Education by January 15th, information on all of their student cohorts. The completers list that have been sent to all institutions have been problematic and the deadline for that comes just before the incoming administration.

You will recall, and we shared with your audience in the past, that Congress, The Senate, in particular 20 bipartisan senators, asked for that reporting deadline to be July 1 of 2025. The fact that it’s January 15th and not July 1, I think that Congress has and will continue to put pressure on the outgoing administration to maybe pump the brakes on that as well, lest we get a lot of information that may or may not ever be utilized and who knows who does what with it in the interim?

Drumm McNaughton: Yeah. There’s so many different changes that need to happen. As an outsider, you’re far more of an insider than I am, but as an outsider when I look at the different Neg Regs that have happened and I have to wonder, “why”? Why? Why did these move forward?

Tom Netting: Well, again, because I think that the people that were entertaining them and pushing for them had counsel that believe that these were important things to achieve. Whereas there are others that tried to tell them throughout the negotiations and subsequent to that, that this may be farther than the interpretation and the rules of the federal government are allowed to do, in terms of interpreting the statute and making regulations based on that statute. And we’re left to see where all of that takes us.

We could go on a whole nother conversation about Chevron and how the changes with Loper Bright and the Chevron case could have a significant impact on some of the regulations that we’re talking about that are in place, as well as those are in the courts, may be a proving ground or a testing ground for that.

But back to your question, the ones that I see that are going to be, and the issues that are going to be forthcoming, are things like gainful employment.

I do think that they’re going to take a look at Title IX.

I do think that another thing that they’re going to take a look at, very early on, potentially in the process, are the income contingent based repayment plans.

The repay program, and now the Save program, and the continuation of attempting to provide for the relief through those programs is going to be very important when we have the deadline coming up next year of when students are going to have to start repaying their loans. They were supposed to start it last October. They were given deference for a period of time. Sooner or later, repayment of loans is going to have to start happening, and the way in which it does, and the manner in which it does, is something the incoming administration is going to have to tackle in a very big way.

Drumm McNaughton: Why? And this is just a curiosity thing on my part. Why is there such a difference in opinion between Republicans and Democrats on student loan repayment?

Tom Netting: If I had to answer that one, I could have a whole new cottage industry, but I think a lot of it has to do with the determination of the value of the education received, and then therefore the ability, the return on investment of that, to repay those loans.

What becomes a major issue here is whether or not that information and that responsibility resides with the individual or family who signed the loan or the individual institution at which they attended or some combination of both.

And I think if you were asking me to give a delineation, that’s the difference. The Democrats want to protect the interest of the borrower and their family, and the acceptance of that responsibility, but then the ability to absolve that responsibility depending on the outcome.

Whereas Republicans are more interested in saying that, “if you have taken that responsibility and we can show that based on outcomes, that there is a viable opportunity for you to excel or achieve that responsibility is your own, not somebody else’s.”

Drumm McNaughton: That makes a lot of sense. You just brought up a term that you’ve used before. Return on investment.

Return on Investment in Higher Education

Drumm McNaughton: What does that look like for a revamped education department?

Tom Netting: Man, you teed that one up for me nicely. One of the things that recently came out and you heard and saw in my emails through CSPEN was that the higher education community got together with the Department of Education and with the Biden administration under their Raising the Bar program and came up with a definition of what they determined to be exemplary institutions of higher education, broken down into two categories.

One being those offering certificate and associates degree level programs, and one being those coming from bachelor’s programs or higher. Bachelor’s programs but limited below master’s degrees.

And what they did, Drumm, was they put together an equation that is, interestingly enough, very similar to the gainful employment metrics. They wanted to assess, based on whether or not individuals saw an increase in their earnings potential post-graduation and successful completion.

The major differences, however, were this new equation methodology gave recognition for a 10 year window, not a 3 year window of earnings potential. It gave recognition to the institutions of the population served. So if you had a large population of lower socioeconomic or impoverished individuals, i.e., a high number of Pell grade individuals, your calculation methodology is shifted as a result of those factors and others.

Those are the same type of criterion that have been argued in literally all four Negotiated Rulemakings around gainful employment as factors that should be taken into consideration. The fact that they weren’t in the regulations that determine eligibility for private nonprofits, for profits, and schools offering certificate and credential programs, but are now used for exemplary institutions in this other format, are something where I think that there might be some opportunity for discussion there between those two and what really then this should be used as a determinant for.

Drumm McNaughton: And if I’m looking at a crystal ball, if you’ve got these quote, exemplary organizations who meet these criteria, those would be the ones to receive funding from the government or Pell Grant, et cetera.

Tom Netting: Or at least include all sectors of education in the assessment using the same criteria. Again, what you’ve heard a lot of people ask for is never for preferential treatment, nor deferential treatment, but just equitable treatment.

And the fact that this new calculation has come out really opens the door again to say, okay, we’ve got two rivaling calculations, both attempting to determine ROI, return on investment. Both using outcomes as the benchmarks for that, and very similar outcomes, but the definitions matter, and the different editions are where you change that from potentially exemplary to potentially ineligible.

Drumm McNaughton: That makes perfect sense. And you and I have talked about this before, especially with relationship to, as it relates to gainful employment, I’ve always felt it should be across the board. Why target just for-profit universities?

Tom Netting: Well, and I think that’s one of the things you’re going to see this administration focus very heavily on is potentially an assessment across all sectors of higher education. Again, the financial value, transparency notion, and the fact that by 2026 we were supposed to see this information published for all programs at all institutions is a segue for that.

Again, and that came from hard fought negotiations from both detractors and believers in all forms of education.

Drumm McNaughton: I’m getting into things that I’m just curious about and I’m not thinking about the audience who’s going to be listening to this, so I’ll apologize to everybody right now, this is fascinating for me. I probably in another lifetime, was a policy geek like you, Tom.

Tom Netting: I’m a wonk. I’ll take full credit for those four letters.

Future Considerations and Conclusion

Drumm McNaughton: So, other things about the Department we ought to be thinking about.

Tom Netting: I think that once again, we talk about it looking at, not only Ms. McMahon as the potential appointee, yet to be confirmed, but also again, that Deputy Secretary and the Undersecretary. I do think that there are several other positions that are going to be instrumental in this too.

Drumm, you talked about this, the CFO position. Cordray’s prior position and several others are going to be very, very important. I will tell you that, again, I’m putting more focus than ever on the liaison positions, liaison between the White House and the Department, as well as the liaison between Congress and the Department of Education. Those two positions, I think, are going to have a lot of responsibility in this interplay between the various different facets.

And let’s be honest, ideas. Not all the ideas, even within the Republican side of the aisle, are going to be synergistic. There’s going to be some things that they’re going to have to work out amongst themselves. And then work out with their Democratic colleagues as well. So it’s going to be interesting to see how some of this all unfolds.

The other things that are heavy on my radar; I believe that, yet again, whichever Department was in charge are going to have to do what we’ve talked about before as well with your community and that is implement the National Institute of Science and Technologies, 800- 171 regulations. This is a significant increase in the platform system responsibilities of IT at all institutions across the country.

Drumm McNaughton: And just for folks who don’t understand what that means, what is that regulation?

Tom Netting: The NIST regulations are the responsibility under IT for the protection of federal fiscal funds. And it requires a great deal of your information platform, basically your computer systems and platforms, to have not only encryption, but a lot of other standards and responsibilities in order to protect the data, both personally identifiable information, as well as the federal government’s funding aspects.

And as a result of that it’s another one of the things you’re going to hear me probably Drumm at some point in the future, talking to you about this coming back around, because. It was something that the prior Bush administration, the prior Trump administration, as well as the Biden administration have all been looking at. So, again, this is something that I see that is long since been in place for judiciaries, meaning our banking and lending communities in the, other worlds, and it’s coming to us and it’s going to be something we’re going to have to have some challenges with.

Drumm McNaughton: Yeah I think you’re absolutely right.

Folks, this ends part one of my conversation with Tom Netting. Please tune in next week for the conclusion of this fascinating conversation. Thank you.