1	What State Policy Makers Should Know About Federal Higher Education Policy Presenter: David Longanecker Executive Director
2	The Mantra Education is a State Responsibility, Not a Federal Responsibility.
3	The Legitimate Federal Stake The federal role The 14^th Amendment of the U.S. Constitution The federal interest – competitiveness Politics The federal investment $90 billion annually Or maybe only $25 billion Why Is This Important to State Policy Makers? Harmonize State and Federal Policies & Programs Maximize use of federal policy & practice to achieve the State’s interests.
4	The Law: The Higher Education Act Originally passed in 1965 – amended periodically Domain Access Financial Aid Quality Institutional aid/supporting unique institutions Teacher preparation Areas of particular federal interest Graduate Education International education Whatever
5	The Law: The Higher Education Act Current Circumstance Reauthorization scheduled for 2004 Extended automatically to 2005 (normal) Temporarily extended multiple times since Being adopted piece-meal (not normal) Budget Reconciliation Act dealt with student loans and some definitions Remainder remains “in process”
6	The Law: The Higher Education Act Direction is clear Incrementalist in nature Authorized spending levels will increase slightly, But funding won’t Mandates & Monitoring will increase, And this will be realized Incrementalism can have BIG consequences for States The Definition of An Institution of Higher Education. Will spread federal benefits Could affect state program eligibility
7	The Law: The Higher Education Act Change over time: Less Focused on the Most Needy Less Focused on Students & Institutions & More on Third-Party Providers (particularly lenders). More Focused on Accountability Why is this important to State Policy Makers? Change can complement or pervert state policy Example: “Federal Methodology” Unnecessarily complex And not contemporary or practical for states Definition of IHE. New Academic Competitiveness Initiative
8	The Money: Federal Appropriations Understanding the appropriations “disconnect” Entitlements – Student Loans Discretionary – Everything else Except Pell Grants – the Quasi-entitlement Program The mythical shift from grants to loans Pell – more is less Loans – more is more – a larger piece of a larger pie. Why Is This Important to State Policy Makers? Federal dollars are first in, which gives States leverage Few intentionally take advantage
9	The Hidden Money: Federal Tax Benefits Tried and true tax benefits Tax exemption for public and private institutions Tax benefits for employer provided education and training opportunities Research and Development tax credits & deductions for business and industry. Tax deductions for gifts Tax deductions for dependents attending college The New Biggies HOPE & Lifelong learning tax credits -- $8 Billion (could be $12 Billion) Why Is This Important To State Policy Makers? You are leaving a lot of federal dollars on the table, both for your citizens and for your State. Some may be at risk – institutional tax exemption The American University debacle Intercollegiate Athletics
10	The Federal/National Focus on Accountability 1992 Reauthorization of the HEA – SPREs & The Triad 1996 National Commission on the Cost of Higher Education 2005 SHEEO National Commission on Accountability in Higher Education 2006 National Commission on the Future of Higher Education Why Is This Important to State Policy Makers? It is an ethic whose time has come States can lead, or be led.
11	Why This Is Important To You You are significant partner with the feds on issues of both access and quality, whether you or they recognize it, or not. The federal presence in financial aid and research drive policy Being policy smart can make your programs much more cost effective. Current discussions will affect you in a big way.