ICYMI: The End of an Era: Obama, Higher Education, and Legacy He Leaves Behind

By Brittany Hackett, Communications Staff

The close of 2016 also signals the end of President Barack Obama’s time in office, after spending eight years in the White House. Much has changed in higher education since he took office in January 2009, from the implementation of a direct lending system for federal student loan borrowers to new consumer tools to help students and families navigate college decisions.

It is notable that the Obama administration, when compared to other presidencies in the last 50 years, was able to enact many of its policies without a reauthorization of the Higher Education Act (HEA), or any congressional action really, choosing instead to revisit existing statute or implement new programs and strategies through some form of executive action.

NASFAA spoke with several higher education advocates in Washington, D.C. about what legacy Obama and his Department of Education (ED) will leave behind on higher education, and what may or may not happen under President-elect Donald J. Trump.

As expected, it was a mixed bag in terms of what Obama and his administration did successfully, versus what could have either been handled better or was not addressed.

The Hits

In particular, the Obama administration received lots of praise for its early work on boosting funding for the Pell Grant Program and increasing income-based repayment for student loan borrowers through the creation of the Pay As You Earn (PAYE) Program, as well as the move to direct lending for federal student loans.

“Not only was [Obama] able to make things more affordable on the front end and more sustainable for borrowers on the back end, he was able to better target underserved communities” through his policy initiatives, said Maggie Thompson, executive director at Generation Progress.

Other policy initiatives like the Student Aid Bill of Rights and the College Scorecard, which focused on improving consumer information and college affordability and were put into place without legislative action, were also ranked highly by higher education advocates. Other notable improvements to the federal student aid system include Early FAFSA and prior-prior year (PPY), simplifying the FAFSA, and incorporating the use of the IRS Data-Retrieval Tool (DTR) into the FAFSA filing process.

“This administration was able to accomplish several really important things with the tools available … mak[ing] it easier for millions of students to file the FAFSA,” said Laura Asher, president of The Institute for College Access & Success (TICAS). “I think these all are significant parts of the legacy when it comes to a more student- and consumer-oriented approach” to student aid.

The Misses

With all the highs, there inevitably will be some lows to come out of the Obama administration, including the failed college ratings system that was proposed in 2013 and the elimination of year-round Pell in 2011, despite the program having bipartisan support.

The growing number of student borrowers who are in default will also likely be part of Obama’s legacy, according to Jason Delisle, a resident fellow at the American Enterprise Institute (AEI). “Not that he caused it, but that [his administration] didn’t do anything to stop it either,” Delisle said.

Delisle also said that while eliminating the guaranty student loan program was successful in reinvesting money into the Pell Grant Program, there was a missed opportunity to help those borrowers by converting their loans into direct loans, for example.

Other “misses” highlighted by higher education advocates include not doing more to improve student loan counseling and address the problems inherent within the student loan servicing system, as well as the creation of a centralized loan servicing portal, which ED is currently working on.

The in Between, and Beyond

Some policies fall in the grey area of success, showing promise for the future but falling just short of being truly effective at the time of their passing. One policy that comes to mind is the continuing saga of America’s College Promise, which would provide two years of free community college to qualified students.

“A lot of people I think would take the mindset that it had the big introduction but nothing is getting done, which is the wrong way of looking at it,” Thompson said of the idea that was first proposed by Obama in 2015 and became a central piece of Democratic presidential candidate Hilary Clinton’s higher education platform. The fact that the proposal gained attention and sparked a conversation about “where we need to go in higher education is incredibly important,” she said.

Another Obama policy that falls in to the mixed-bag category is the American Opportunity Tax Credit, which Delisle said is an “interesting” piece of policy because it was enacted with the goal of making college affordable for all families, but has fallen short of achieving the goal, as many families are ineligible to claim it.

But perhaps the biggest issue in the mixed-bag category is Obama’s use of executive actions rather than legislation to achieve his higher education agenda. The use of executive orders, memos, and regulations is nothing new to the presidency, but the Obama administration seemed to rely more heavily on tools like negotiated rulemaking in the latter years, particularly since 2010 and the passage of the Affordable Care Act.

One reason for the more frequent use of executive action, according to Elizabeth Mann, a fellow at the Brookings Institution’s Brown Center on Education Policy, is that it is often easier to direct the Department on what to do rather than try to pass a new law, especially for low-priority items on your agenda that you do not want to use political capital to achieve.

But the more likely reason is the political gridlock that took hold of Congress during the eight years Obama was in office. “I think that for the Obama administration, their reliance on executive action was very much a function of their relationship with Congress and inability to pursue their goals through that avenue,” Mann said.

The Obama administration also placed more “effort … on reinterpreting statutes from decades ago with new regulations and new rulemaking,” Delisle said.

Obama’s moves on re-regulating topics like borrower defense, gainful employment, consumer protections, and income-based repayment have been called an overreach by some in the higher education community, while others have praised his work as important steps to better protect students.

“I don’t think it was an overreach at all,” Thompson said, adding that she would describe it as “getting what you can on the board when you have a Congress that, by words and actions, demonstrated they do not care about student borrowers.”

“The fact that he was able to get so much done without [an HEA reauthorization], I think he’s going to have a really strong legacy on higher education,” Thompson said.

And while some of the regulations put in place by the Obama administration may be on the chopping block under President-elect Donald J. Trump’s administration, the Obama administration’s legacy will likely rest solely on their efforts over the last eight years.

“One of the interesting things that will come out of this is that they will own this 100 percent, unlike Congress where there is more give and take,” Delisle said. “It’s 100 percent Obama administration decisions for some of these things and I think that it is very clear who did this and if it doesn’t work out … they are all his doing.”


Publication Date: 12/20/2016

Richard B | 1/5/2017 9:37:52 AM

It's amazing how much credit is given to a President in the area of Federal Student Aid.
Obama didn't initiate direct lending, it started long before him!

David S | 1/4/2017 10:33:57 AM

Have to disagree with Jason Delisle's assertion that the Obama administration did nothing to stop loan defaults. During his years in office, we saw several new repayment options introduced - plans that Jason is not a fan of, but were clearly designed to make repayment easier, thereby decreasing the chance of defaults. Enrollment in income-driven repayment and PSLF have increased exponentially. His administration has also clamped down hard on severely underperforming schools whose borrowers are more likely to default and beefed up the Defense to Repayment regulations so that defrauded borrowers won't be held responsible for loans they borrowed for educations that provided them with no marketable skills.

I'm not sure what more Obama could have done to decrease defaults...many, perhaps even most of which were for loans that were borrowed during the depths of the 2007/08 recession.

Jeanette S | 1/3/2017 2:9:02 PM

I've worked in financial aid since 1990. Nothing stays the same but during Obama's administration for-profit colleges and their students got the shaft. Thousand of people lost their jobs and thousands of students were left out in the cold. But hey, at least they can attend a state owned and operated college. Maybe all the state owned and operated college employees will get raises.

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