By John K. Atsalis | New act offers greater financial transparency and aid for all.
The newly-passed Higher Education Opportunity Act of 2008 is structured, according to its proponents, to make college more affordable through increased opportunities for student loans, an easier financial aid application process with FAFSA, and increased transparency of college finances. President Bush signed the act into law this past August. Modifying the original Higher Education Opportunity Act of 1965 and later iterations, this is the most recent authorization since 1998. The reauthorization is long overdue, with the previous bill expiring in 2003. This current authorization is set to expire in 2013. In the past five years, the mandates from the 1998 Act were extended in piecemeal fashion.
While much in the bill focuses on the mechanisms of financial aid within the government, it also has mandates for colleges that receive federal monies for financial aid. This is not unpredictable, nor unwarranted. While Congress should be loath to attach strings to monies intended for states and municipal governments—as the taxpayers of those jurisdictions are in essence receiving their federal taxes back—it should absolutely establish conditions for federal grants and aid to private institutions, such as colleges and universities. The grant of public monies for use by private individuals and institutions must be for the public good. Many can agree with the bill’s authors that “a college education continues to be the best path to the middle class.”
Here at the Hill, this new bill means increased transparency on the part of Tufts. This is definitely a good thing. While Tufts is a private institution, its use of federal aid means it needs to account for its finances. The new bill requires colleges to make information more clear on their websites, such as tuition, graduation rates, popular majors, and more. In addition, institutions of higher learning must provide reasons for their tuition increases. While it remains to be seen how comprehensive the “reasons” will be, it is a step in the right direction. It would be encouraging to see greater financial transparency voluntarily on the part of the Tufts administration, but if it takes some government legislation, that is more than acceptable due to Tufts’ reliance on federal monies. While this will most likely not lead to a disclosure of the full Tufts University budget or endowment investments, it will make the University more accountable. In addition, this part of the legislation does not actually mandate the policies of the University; rather, it just requires the University to disclose information already tabulated for internal use.
What is a concern are the pieces of the legislation dictating the behaviors of our nation’s institutions. Increased rules concerning peer-to-peer sharing is particularly odious as it stifles the free exchange of ideas that should be encouraged on university campuses. In addition, required disaster-response plans are an undue interference upon private institutions. Schools in the Boston area are hardly in danger of weather-related disasters beyond blizzards; while individual schools, not the government, should take it upon themselves to develop response plans to violence-related disasters such as the Virginia Tech massacre in 2007. Lastly, requirements with regard to fire safety are hardly a matter of federal concern. States and municipalities have jurisdiction over fire codes and related laws; it is up to them to regulate this issue.
Some of the legislation works to cut down on inefficiency. The current seven-page FAFSA form will be cut down to two within five years with the implementation of the EZ-FAFSA. Of course, the question remains as to why the pared down aid application form cannot be the only form, as opposed to having the two versions in circulation. It is invigorating to see agencies of the federal government working together to reduce duplication of tasks by both its employees and its citizens—the FAFSA will no longer require parents to fill out their financial information; instead, it will be culled from their tax returns filed with the IRS. It is important for the IRS and the Department of Education to work in earnest on this measure—and to ensure that no taxpayer data is compromised in transferring data between the agencies.
Lastly, the legislation tightens ethics with regard to loan lenders. It endeavors to reduce conflicts-of-interests between financial aid departments, university administration officials, and the loan lenders. The legislation requires them to be more upfront regarding fees and rates of their loan and their competitors while students are weighing options. To this end, the Department of Education will also develop a web-based calculator with which students and their families can calculate and compare annual and four-year cost of tuition at various schools. This will allow students to make more financially secure decisions.
While the inclusion of federal intervention in operations of universities and colleges is regrettable and troublesome, other parts of the legislation are a step in the right direction. Moving towards greater fiscal transparency is a step in the right direction for the higher education industry. Tighter regulation of the student loan industry is imperative in this age of insecurity—students were affected nationwide by this past summer’s meltdown of the mortgage industry, which also brought down the student loan industry. One thing Tufts can be sure of: its permanent place on the Department of Education’s “the 5 percent most expensive institutions in the country,” due out annually beginning in 2010.
Mr. Atsalis is a sophomore who has not yet declared a major.