Insights

Implications of the 2024 Election on Risk Management in Higher Education

  

Peek into what a new administration may be focusing on starting in 2025                                                                                                                                                                                                        

Insights from the American Council on Education’s Government Relations Staff

The results of the 2024 election and the subsequent Republican majority in Congress, alongside the Trump administration’s return to power in January 2025, raise important considerations for risk managers in higher education. This topic was the focus of a recent URMIA webinar, where Sarah Spreitzer, vice president and chief of staff for government relations at the American Council on Education, outlined potential legislative and policy shifts that may impact the sector.

Election Outcomes and Higher Education

The 2024 presidential election was not as close as many anticipated, with Donald Trump securing both the Electoral College and the popular vote. This decisive victory provides the administration with a clear mandate. Voter demographic analysis highlighted an increasing education gap between parties. Republicans are more likely to consist of individuals who have never attended college, while Democrats have a higher proportion of voters with advanced degrees. The election results reflect this divide, with higher education becoming a ballot issue and beliefs about the value of a college degree influencing voter choices.

Despite the Republican control of both the Senate and the House, their very slim majorities present challenges. In the Senate, Republicans lack the three-fifths supermajority required to close debate on legislation or nominations, which may limit their ability to advance sweeping changes.

The Trump Administration’s Potential Impact on Higher Education Policies

There was a prevalence of anti-university rhetoric among Republican leaders before the election which raises questions about the extent to which these sentiments will translate into actionable policies. The administration’s clear agenda and rapid pace of cabinet nominations, comprising MAGA loyalists, traditional conservatives, and former Democrats, suggest a more organized approach than Trump’s first term.

Key policy areas to watch:

Title IX and Civil Rights Regulations

The Biden-era Title IX regulations are expected to be rolled back and replaced with Trump-era policies. Additionally, there may be an increase in civil rights investigations by the Office for Civil Rights (OCR) and the Department of Justice (DOJ).

Department of Education Restructuring

While eliminating the Department of Education would require congressional approval, the administration could downsize the department by redistributing functions to other agencies. For instance, the OCR might move to the DOJ, and student loan programs could shift to the Department of Treasury or the private sector.

Higher Education Agenda

The administration is likely to advance initiatives such as expanding short-term Pell programs, investing in artificial intelligence, reinstating the travel ban, increasing deportation actions, and intensifying Title VI investigations.

The Project 2025 agenda offers additional insight into potential reforms, as it includes the privatization of federal student loans, elimination of Public Service Loan Forgiveness (PSLF) and PLUS loans, replacement of income-based repayment plans with less affordable plans, and state-level accreditation of institutions.

What to Expect in a New Congress

Leadership changes in Congress will significantly shape higher education policy. Senator John Thune, the new Senate Majority Leader, is recognized as a staunch conservative with a pragmatic approach to bipartisan cooperation. Senator Bill Cassidy, the incoming chair of the Health, Education, Labor, and Pensions (HELP) Committee, has shown marked interest in topics such as artificial intelligence, short-term Pell programs, and other educational issues, marking a departure from the prior chair’s lack of focus on education.

The House of Representatives Committee on Education and Workforce's current chairwoman will be termed out next year. Two possible replacements are Tim Walberg (MI) and Burgess Owens (UT). Congressman Owens would likely continue to advance the proposed College Cost Reduction Act and the Workforce Pell Act.

The House of Representatives will likely prioritize funding and tax reform, with reconciliation processes potentially targeting student loan programs, Social Security, and Medicare/Medicaid. While the proposed College Cost Reduction Act (CCRA) has not had sufficient support to pass as a bill, its elements could be added to the funding package and passed through the reconciliation process which requires only a simple majority in the Senate. These elements include:

  • Elimination of Grad PLUS and Parent PLUS loans
  • Cap on federal student loans
  • End of PSLF
  • Introducing a risk-sharing mechanism requiring institutions to repay portions of defaulted loans

The House may also reintroduce Title VI and diversity, equity, and inclusion (DEI) riders to funding bills, and intensify scrutiny of international partnerships, particularly with China, focusing on technology transfer and security risks associated with Chinese students.

Questions and Conclusion

When asked about the most disruptive changes to expect relative to higher ed, three were called out by Spreitzer during the webinar:

  • The College Cost Reduction Act
  • An expansion of the endowment tax or requirements around how the endowment is used
  • Immigration, specifically the duration of student visas which will impact international student enrollment

Thanks to Spreitzer for this enlightening, if sobering, information. We should all proactively prepare for the potential shifts in policy and legislation highlighted during the webinar. While some changes may require congressional approval, others could be implemented through executive orders or administrative action. Monitoring these developments and adapting strategies to address evolving risks will be critical for institutions to navigate the uncertain political landscape effectively.





12/17/2024

By Carol Rehnberg, Director, Risk Management, Western Washington University


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01-01-2025 12:51 PM

Great summary of the webinar!