On the admissions front, and in conversations with boards, we see the following:

• A growing concern that the nation may be at the end of its long economic expansion and that financial anxiety will return as the prevailing psychology in the college admissions and finance marketplace.

• A concern that endowment growth will slow or show retreat and that this will affect strategic investments and financing plans.

• Growing resistance among high school college counselors (mainly the private school counselors on the west coast) to early decision/admit/write practices that they regard as contrary to the interests of students.

• Continuing strength among the "have" schools to generate more applications, while "have not" schools struggle.

• An interesting and evolving struggle with the implications of the internet. For example, as a result of a free application that Carleton mounted on the web this fall, applications are up 75 percent. How serious those applicants are, and the college's capacity to discern qualified leads, are unanswered questions.

• The growth of institutional affiliation with Tuition Plan Incorporated (TPI) is a promising development. If TPI can achieve the tax favored status it seeks, it could change the competitive landscape by providing a superior, national alternative supplanting state pre-paid tuition plans which exclude private institutions.

• States continue to develop financing schemes beneficial to the public sector. Florida has recently funded the Bright Futures program. North Carolina is discussing a need-based program that several lawmakers prefer to see as a Hope style program. As they say, stay tuned.

I think it's useful for senior policy makers and governing boards to take a fresh view of the higher education landscape now and again. To coin a phrase, "this is a big ol' mess, that's what this is."

At both the state and federal levels, politicians continue to reflect the widespread public angst about perceived college costs. This political attention has not yet peaked, and efforts to exploit voter concerns take a number of troubling forms--none of which address the problem fairly or with a view toward specific policy objectives relative to the role of higher education in improving society. Higher education leadership in Washington seems to us to have failed miserably in raising either the tone, substance, or policy orientation of discussion at the federal level. As a result, federal policy grows ever more problematic for private institutions.

For example, in the 60s and 70s, much of federal and state policy was built around an effort to achieve a balance between the policy goals of quality, choice, and access. As a result, need-based student aid programs had a high priority because they created market-based competition, which promoted quality; they offered access for those of limited means; and they provided the same level of choice for poorer students that was available to more affluent students.

This year we saw a minor increase in the Pell Grant program, the federal grant program benefiting the least affluent students. When a New York Times story objectively demonstrated that the Pell grant has dramatically lost value when adjusted for inflation and increased costs, a spokesman for the American Council on Education (ACE), one of the major higher education lobbies, countered that this view was "misinformed" and praised Congress for its strong support of student aid programs. This is a troubling illustration of just what a mess we're in.

Fearful 
First, the higher education establishment in Washington is fearful of further alienating political leaders, even to the point of arguing against an objective fact.

Fragmented 
Second, the higher education community this leadership represents is not unified in its approach to policy development. The interests of research institutions have now diverged so far from the needs of undergraduate colleges and universities, that any effort to make student aid a priority falls victim to stronger institutional interests to garner earmarked funding and research support.

Finessed 
Third, as if the problems of toadyism and policy fragmentation were not bad enough, in the current reauthorization, the non-profit sector in general was outmaneuvered by the proprietary lobby, which had its best reauthorization in a decade. In this regard, higher education sorely misses Senator Nunn.

The best and most troubling analysis of the recent reauthorization that I have seen was issued to presidents recently by the Minnesota Private College Council. Perhaps it will be useful.

There are a couple of historical notes that are essential to understanding what occurred in this reauthorization.

First, the Republican leadership in their ascendancy promised higher education relief from excessive regulation and the costs relating to it. Upon taking over, their first initiative was an attempt to reduce the nation’s commitment to financial aid. The successful national Save Financial Aid initiative was a stinging rebuke of their efforts. Part of this reauthorization is a payback for the embarrassing defeat that they suffered.

Secondly, traditional higher education began this reauthorization with a pact designed to try to protect the status quo, a strategy that usually guarantees some loss of position in national politics.
On the other hand, the proprietary sector, the community colleges, and the collection of groups that support TRIO and other bootstrapping programs, have been aggressively pursuing Congress for the past five years to reposition themselves in national priorities.

It also is a fact that the leadership of the authorizing committees in both the House and Senate are significantly weaker than has been the case for the past 20 years. They have been unable to control efforts by members of their committees and other members of House and Senate bodies to introduce amendments which run far afield from the intentions of the leadership, and in some cases, their full committees. This has resulted in a very disruptive reauthorization process and one in which no one except the final drafting staff had control.

The other disruptions in D.C. for the past four or five months relegated decision making to the senior committee staffs in both houses on topics such as higher education. The senior committee staffs, in fact, made nearly all of the decisions for this current bill. In general, there are very few significant programmatic changes in this reauthorization act and the authorizing language for appropriations is quite typical of pre-election positioning. The most significant changes occur in details, anticipated regulations, and in the emphasis or priority placed on particular interests.

Here are some examples that may prove quite troubling for us:

• The act establishes federal control of teacher education and its results as a national priority and creates a linkage between the Department of Education, the state entity supervising teacher education, and the institutions providing that training.

• The act destroys the remaining vestiges of the distinction between for-profit and not-for-profit schools and establishes a preferential treatment of the proprietary sector in the staff of the Secretary.

• Through assignments for studies and policy discussions, the act sets the stage for another attack on college costs in the next couple of years.

• The act disrupts a delicate balance in federal student loans and creates a preferential arrangement for the direct student loan program.

• For the first time in the history of the student loan programs, the act places lender profits as a higher priority than increased need-based grants and creates a line item to guarantee the profit margin for participating banks.

• The act creates civil penalties for institutions which err in reporting campus crimes and adds to the already substantial reporting requirements for campus crimes and those occurring near campuses.

• Through a prescribed study, the act sets up the probability of a federal mandate for automatic transfer of credit among all institutions participating in the Title IV programs.

• Through a sense of the Congress resolution, the act imposes character building as a required institutional priority for institutions participating in Title IV programs.

This reauthorization is notable in its failure to address the following continuing challenges:

1. It does not correct the continuing imbalance between loans and grants at the federal level.

2. It does not restore any semblance of needs analysis, yet continues the fiction that the current federal distribution formula determines a useful approximation of family ability to pay.

3. The act sets no incentives for improving or increasing the educated labor force in the nation.

4. This reauthorization offers no relief in the magnitude or cost of the regulatory burden for participating institutions.

Our colleagues in our national organizations will appropriately claim that they helped to forestall initiatives that could have produced a bill that would have been far more damaging than this one. They also will argue that the retention of the current financial aid programs and their levels of authorized spending is a success. While both of these are legitimate claims on the part of our national representatives, it should not cloud the fact that traditional higher education took a shellacking in this bill and the for-profit proprietary sector had its best success in nearly three decades.

- James H. Day