The Obama Administration’s Disappearing College Graduation Agenda

They say that everything’s relative, and this is certainly true in politics. Normally, the President signing a bill eliminating $87 billion in corporate student loan welfare would be a huge deal. But when it happens in the same legislation that overhauls the entire American health care system, people take less notice. And the successful student loan reform, in turn, overshadowed the collapse of the Obama Administration’s college graduation agenda. That’s the subject of an article I wrote this week for The New Republic.

In a nutshell, the student loan reform was more a triumph of good government than an improvement in education policy.  Cutting out for-profit banks as the middlemen in the federal student loan program was a huge achievement. But nearly half of the savings were either defined into non-existence by Kent Conrad (the article explains how this happened) or targeted for health care and deficit reduction. Most of the remaining funds were used to increase Pell grants.

I’m all in favor of Pell grants. But when the administration boasts of doubling “the amount of funding available for Pell Grants” it’s important to realize that this doesn’t mean that the poorest students are getting twice as much money to pay for college. The maximum Pell grant was increased by less than 20 percent. Because of the way Pell interacts with the federal “expected family contribution” calculation, this increases both funding and eligibility for Pell grants, which means that many of those billions of new dollars are going to provide small partial Pell grants to people who, by definition, are wealthier than all the people who were getting Pell grants before. The administration justifies the new Pell expenditures by noting that “the purchasing power of these grants has rapidly diminished over time.” But it generally fails to acknowledge that far and away the biggest driver of that diminished purchasing power is not declining Pell funding but rapidly growing college prices. To his credit, President Obama mentioned the college cost spiral problem in his State of the Union address earlier this year. But the administration has announced no plans at all to address the cost problem. Without one, all that new Pell funding is going to disappear like water into sand–assuming, of course, that future Congresses find a way to finance a Pell program that has absolutely exploded in cost to over $30 billion per year.

Moving the needle on college graduation was always going to be a particularly tricky federal policy challenge. The health care system can be permanently changed in a fell swoop by federal legislation. The higher education system cannot. The administration’s late, lamented American Graduation Initiative, which died from a combination of legislative caprice and the the overwhelming pressure to pass health care, was under the best of circumstances only a foundation on which the administration could have built a lasting, effective effort to partner with states and universities to help more students finish college with a legitimate, high-quality degree. It still would have required a great deal of expertise and focused attention to make a difference.

Now most of the foundation has crumbled. There are ways to leverage the remaining programs–in particular, the new funding for minority-serving institutions, the thus-far-uninspired College Access Challenge Grant, and the new jobs training money for community colleges–and at least start to move forward. Taking advantage of that opportunity will be the difference between legitimate improvement in federal policy and the administration’s goal of regaining the international lead in college going by 2020 becoming just another empty slogan.

Tagged as: American Graduation Initiative, College Access Challenge Grant, College Cost, graduation, health care reform, Pell Grants, Student Loan Reform