In a guest post today, Lloyd Thacker urges colleges to consider how they might work together to reform the financial-aid system. Mr. Thacker, a former college counselor, is the executive director of the Education Conservancy.
I think most college presidents know that giving money to students who don’t need it is wrong. Now, some are beginning to realize that competitive pricing models are also inefficient. Hence the prospect of doing well by doing good is apparently stimulating the kind of leadership and critical thinking among presidents that many colleges purport to instill in their students.
This is a good thing, for increasing educational return on financial-aid expenditures, for regaining lost trust in colleges, for reclaiming billions of dollars in unrealized revenue (left in the banks of unnecessarily subsidized families), for resurrecting the public-interest purpose of higher education, and for reigniting the American Dream. It’s also a promising sign that educational leadership is reemerging amid the encroaching marketplace of higher education.
In short, it’s high time for an organized campaign to reform financial-aid policies so that they better serve the public interest. The draft of a collective statement on reforming financial-aid practices, circulated during a meeting of college presidents earlier this month, underscores the appropriateness of establishing a sustained campaign. Congress is slated to reconsider the “568″ antitrust exemption for colleges in 2014, and without a concerted effort by colleges, higher education will miss a rare opportunity to shape its own destiny.
Presidents have long said that antitrust laws restrict them from even discussing financial-aid issues. Today, the antitrust hurdle is being more accurately understood as a convenient excuse for inaction. Collaboration is being recognized as both a strategic and responsible opportunity to raise the educational tide for all stakeholders. And college presidents are meeting to discuss what they should and can do and to begin to put such collective commitments in writing.
But this does not guarantee success; collaboration will not be an easy or singular solution. The current draft of the collective statement is more than an agreement of general principle, yet less than a binding document of proscribed practices. Some college presidents are already qualifying their positions on the statement. How many trade-offs must be made to achieve a critical mass of signatories? Time will tell.
In the meantime, some scholars, researchers, and legal experts have identified a more promising route to reform: asking Congress to broaden the antitrust exemption. That might mean expanding the activities allowed under the current exemption, and/or altering the eligibility requirements so that more colleges could take advantage of the exemption. Colleges collaborating to draft a legislative proposal would not violate antitrust law, nor would lobbying Congress to expand the current exemption. The U.S. Supreme Court has long recognized that private efforts to influence the legislative process enjoy immunity from antitrust challenge.
The stakes are high. Colleges face growing public pressure to improve student access and success. This pressure is compounded by the nation’s shifting demographics. As colleges confront these challenges, presidents are realizing that deep discounting and awarding aid beyond need are unjust and unsustainable. These conditions present a unique and compelling opportunity to start a meaningful campaign to reform financial aid.