Higher education policy wonks in Washington are preoccupied with revising federal student financial aid policy in the next higher education reauthorization. And why shouldn’t they be? Financial aid is overly complicated for students and families and it is burdensome for institutions.
Largely in response to the Gates-commissioned initiative to jump-start a needed conversation, many proposals have sprung up for reforming federal financial aid. What many of these proposals fail to recognize is that federal student financial aid exists within a larger financing framework shared with state governments.
If the federal government doesn’t take into account the role that states play in financing their systems of higher education, their funding strategies are likely to simply maintain the status quo. Student financial aid is not the only area of finance that deserves attention through better inter-governmental cooperation.
Federal investment in higher education should prod states in constructive directions. Incentives are the tool to get this done, a tool used far too infrequently in Washington.
I propose three ideas to meet the federal government’s primary responsibilities in higher education financial aid, research, and innovation.
First, provide incentives for states to invest in need-based financial aid. This is a no-brainer. It’s a mystery why the Leveraging Educational Assistance Partnership (LEAP) program was cut at the very time when states should be prodded into investing in need-based aid. LEAP would help students and restore funding for institutions. It can be argued that existing LEAP funding was too small to make a big difference. But failure to restructure this program shows a lack of imagination at the federal level.
Second, make smarter, targeted federal investments in funding research. Rather than spreading limited funds across so many institutions, major research efforts should be concentrated at leading research universities. This targeted approach would help states reinforce the teaching and learning missions of their comprehensive institutions. Consider Texas, where the state plans to significantly expand the research mission of seven institutions and has begun to direct additional dollars their way. As the state moves forward on this agenda, its institutions will spend considerable time and energy in the hunt for more federal research dollars, diverting attention from teaching and learning. But if the federal government better targeted its research dollars, it could create incentives for Texas—and other states— to be more modest in their research aspirations (or even more focused on their primary research institutions), and not spending their time and talent on seeking federal funds.
Third, use incentive funds to support institutional and state efforts to expand the use of technology in teaching and in competency-based learning models. The Fund for the Improvement of Postsecondary Education (FIPSE) historically fulfilled the role of introducing important innovations from the field. However, FIPSE has become more about dispersing funds as Congressional favors, rather than providing support through real competition for innovation. FIPSE should be repurposed and restructured as a quasi-governmental organization with an independent, competitive innovation fund to address the nation’s critical needs.
Expanding investment in states’ need-based aid, targeting research funding, and providing financial support for innovative teaching and learning would provide strong incentives for state investment. And that can make a big difference in higher education policy that is more focused on public needs.
Photo Credit: Victor Stuff
