While many higher education regulations are well conceived and address important issues, too many of them are overly complex and lead to costly compliance efforts on the part of institutions, witnesses told the Senate Health, Education, Labor, and Pensions (HELP) Committee during a hearing Tuesday morning.
The hearing focused on a recently released report -- “Recalibrating Regulation of Colleges and Universities” -- on administrative burden from a task force of 16 college and university leaders, which was commissioned last year by a bipartisan group of senators. The task force was charged with studying how federal regulations, including those related to financial aid, impact postsecondary institutions and recommending ways to reduce the burden on schools, administrators, and taxpayers.
Testifying at the hearing were the task force chairs William Kirwan, chancellor of the University System of Maryland, and Nicholas Zeppos, chancellor at Vanderbilt University.
According to Kirwan, the task force interviewed campus officials at 60 institutions of varying size and type across the country. While the burden of the regulatory and compliance processes differ based on institution size and type, the task force found there to be an overall excessive level of burden across the board with all institutions impacted by the cost in some way.
During his testimony, Zeppos said that the underlying premise of the task force’s work was that smarter, better regulations would provide better protections for students, families, institutions and taxpayers. He added that, over time, the amount of time it takes to address regulations has undermined institutions’ ability serve students.
For example, a study conducted by Vanderbilt found the institution spends about $146 million annually on regulatory and compliance costs, including $14 million on regulations regarding federal financial aid. Those costs, Zeppos said, result in about $11,000 in additional tuition costs per year. And while a large, private institution like Vanderbilt is able to spread those costs across the institution, many smaller schools are unable to do so, he said.
Regulatory reform is an area where policymakers can remove red tape and reduce costs while still being held accountable and transparent to students and families, Zeppos said.
Kirwan said that the report outlines 10 regulations the task force believes to be the “most problematic” and offers recommendations on how to improve or fix them. During his testimony, he highlighted three that were most pertinent to the hearing, including the use of prior year income data when filling out the FAFSA.
The timing problem caused by using prior year data often confuses families and can lead to errors from aid administrators who do not have the correct information while processing a student’s aid application. A “simple fix” to the problem, Kirwan said, would be to shift to using prior-prior year income data, a policy that NASFAA has long supported and advocated for.
Another regulation the task force suggested be fixed is the rule that institutions providing online education receive state authorization in every state where participating students live, rather than just the state where the institution is located, which was discussed during a negotiated rulemaking session in 2014. The regulation “stifles innovation in higher education delivery” and Congress should recodify the regulation to align authorization with the location of the program, Kirwan said.
Finally, Kirwan highlighted the task force’s recommendation to “take out a clean sheet of paper” and revisit the regulations on the return of Title IV funds (R2T4), noting that while the reasoning behind the regulations is “sensible,” the regulations themselves are complicated and difficult to comply with.
Indeed, the details have become so complicated that it is difficult to explain to students and to administer. When NASFAA’s Reauthorization Task Force (RTF) held listening sessions in early 2013 to identify membership concerns, the R2T4 process was the third most commented-on topic. NASFAA continues to advocate for the 11 R2T4 recommendations put forward by the RTF and approved by the NASFAA Board.
Following the conclusion of the hearing, Sen. Lamar Alexander (R-TN) spoke to Politico and said that he hopes to produce legislation on the reauthorization of the Higher Education Act by mid-year, with this report on administrative burden forming the basis of their efforts. For more information on the ongoing process to reauthorize the Higher Education Act, please visit www.nasfaa.org/reauth.
Publication Date: 2/25/2015