After the election, many Americans woke up to new representatives in Congress. These freshly elected lawmakers campaigned on a wide range of issues—from tax reform to national security—and they now have an urgent need to fill in their knowledge gaps on a host of other topics.
Most newly elected members of Congress do not arrive on Capitol Hill with a deep understanding of the higher education landscape, particularly from a business office perspective. Even candidates who ran on issues related to higher education may not be deeply familiar with the rules, regulations, and challenges that colleges and universities navigate in their day-to-day business operations.
This is an ideal time to establish a relationship with your representatives so that they can better serve your institution, students, and community. As you get to know your new lawmakers, here are three insights on higher education to share with them.
I. The Student Aid Need
Most Americans understand that higher education is a worthwhile investment. In 2017, workers with a bachelor’s degree earned nearly $22,000 more per year than their contemporaries with just a high school diploma. Workers with a graduate degree or higher earned more than $40,000 more per year. The door to these high-paying jobs should not be closed to students because they cannot afford to attend college, but the reality is that not all students can easily afford the tuition and fees associated with obtaining a degree. Student aid—from federal grants and student loans, to state and institutional aid—helps ensure that there is a pathway to higher education for students of all economic backgrounds.
A significant portion of students rely on at least one kind of student aid to afford college. In the 2015–16 academic year, more than a third of undergraduates received Pell Grants, while roughly the same share received federal student loans. In addition to this government support, many schools offer institutional aid, often using their endowments to lower the costs for a significant number of students. Taken together, these grants, scholarships, and loans fill an important gap.
In many cases, this aid makes it possible for students to enroll in college rather than entering the workforce directly after high school.
By funding federal student aid programs and setting tax policies that make institutional aid sustainable, lawmakers have the power to create an environment that gives low- and middle-income students greater access to higher education and the economic opportunities associated with it.
II. Tax-Exempt Status Matters
The tax-exempt status of public and private higher education institutions benefits students. Colleges and universities could not offer the same services, at the same cost to students, without the ability to operate as a nonprofit organization. Public and private nonprofit institutions are driven by a shared mission to help students achieve their academic goals and succeed postgraduation; many colleges also have research and public service missions. A tax-exempt status helps schools accomplish these goals, which are beneficial to both the institution and the public.
Providing a quality education is expensive. Among other things, colleges need to heat facilities, operate extensive IT infrastructure, buy and maintain costly research equipment, pay faculty and staff, comply with federal and state regulatory requirements, and provide the increased amenities students need and have come to expect. Tuition covers just a fraction of these costs. The rest of a school’s operational expenses are covered through a mix of fundraising, investment earnings, other revenue streams, and, at public institutions, an increasingly scarce amount of state funding.
With tax exemptions, schools can stretch their dollars further—passing the benefits directly to students—by lowering their operational costs and improving the overall quality of the education that they provide by funding capital projects, increasing institutional student aid, or retaining and recruiting talented faculty.
III. Regulatory Burdens Are Real
Over the past few decades, federal and state regulatory agencies have imposed increasingly complex rules and requirements on higher education institutions. Given the scope of the public’s investment in postsecondary education, it makes sense that the government holds schools accountable for the funds that they receive and the quality of the education that they provide. At the same time, it is important for lawmakers to consider the economic impact of regulations on institutions and, ultimately, students. When drafting new rules, therefore, it is crucial to take into account the value of the benefits gained by creating new regulatory burdens.
Just as tax savings are passed on to students, so too is the price of compliance. Institutions must often invest significant resources to meet regulatory requirements. In many instances, schools need to hire, reassign, or train campus staff. Institutions might also need to set up costly systems, policies, and procedures for reporting. Occasionally, colleges and universities might even have to recalibrate the way that they operate to meet new regulatory standards. These efforts divert resources that would otherwise be used for education, research, or institutional aid.
Of course, not all regulations are bad. If rules are clearly articulated, protect the public’s investment, and benefit students, then even costly regulations can be worthwhile. However, regulations become particularly burdensome when they are vague or contradictory. It can be equally onerous when costly rules have no meaningful impact on safeguarding public funds, making college more accessible, or enhancing the quality of the education that institutions provide. Lawmakers should aim to create a regulatory framework that fosters institutional accountability without overwhelming schools with unreasonably expensive reporting requirements and red tape.
Bottom Line
Incoming representatives are barraged with new information from several constituencies in a variety of sectors. It is important in the coming weeks and months to make sure that your school’s voice is heard. Seize this opportunity to enlist your senators and representatives as cheerleaders in Congress for your institution. Taking the time to help your new lawmakers understand the obstacles that your institution faces, and the value it adds to society, will yield dividends down the road.
The deeper their understanding of the higher education landscape, the better your lawmakers will be able to serve your institution, your students, and your community.
NACUBO CONTACT Kat Masterson, policy analyst