Reconciliation: What’s in and what’s out for higher education (a prediction)

To say that the to-do list for the 117th Congress is very long is an understatement, and there are high hopes for policy change, including overdue reforms to the nation’s higher education policies. However, with the Democratic majority holding such a narrow margin in both the House and a 50–50 split in the Senate, crafting legislation that will land on President Biden’s desk for a signature will be especially tricky.

This is where budget reconciliation, the Congressional tool to make hard votes easier and faster by blocking Senate rules, is especially attractive. It allows for speed by eliminating the filibuster and lessening the need for compromise, as the final package only needs a simple majority vote to pass the Senate.

Based on my experience working in Congress, there is a price to pay for such speed in the Senate. Reconciliation is meant to change entitlement spending, reduce the deficit, or both. The “Byrd Rule” exists to ensure that Congress does not abuse the power offered through reconciliation by limiting the parameters of the negotiation, including by restricting the amount of policy unrelated to spending or saving that can be included, barring Congress from creating new programs, and instituting specific budgetary guidelines.

In the last 20 years, however, much of higher education policy has been accomplished through reconciliation. In 2007, it was the only issue to use reconciliation to make the change to reduce subsidies to student loan companies and instead invest in students. In 2010, the provisions to eliminate the private-bank arm of the federal student loan program sat alone alongside ObamaCare in a reconciliation package. So it’s easy to expect that higher education promises and policies will see the light of day in a reconciliation bill in the 117th Congress.

That said, it’s unlikely that the full laundry list of policy hopes put forth by the President, members of Congress, and advocates will make the cut. While crafting the higher education provisions in the 2007 and 2010 reconciliation packages as a senior staff member of the House Committee on Education and Labor, we first accounted for and answered a few key questions — is this policy a priority? Is it politically do-able? And, most importantly, does it pass the Byrd Rule?

So, in 2021, what can make the list?

Debt Forgiveness: Likely.

This can be done with few legislative words (yes, this matters), will have entitlement — or mandatory — implications on the budget, and will meet reconciliation’s strict budget rules. Plus, debt forgiveness was a hot topic of conversation, and a promise, on the campaign trail, and there remains political momentum to address this issue.

Free College: Unclear.

There’s high-level support on the side of the Democratic majority for free college. However, this may be trickier for policy wonks and Congress to figure out in a reconciliation package. Though Congress cannot create a new program or write a lot of policy provisions under the Byrd Rule, they can invest in an existing program that has a close enough purpose and meets policy goals through implementation (like was done to support President Obama’s American Graduation Initiative in 2010).

Accountability: Maybe?

The federal conversation about higher education long ago shifted from a sole focus on access and affordability. There are now robust debates about quality guardrails for institutions of higher education. As long as new or revised measures would change spending — most likely by an assumed number of institutions no longer participating in federal student aid — these provisions could make the spending cut.

Changes to federal student loans and Pell Grants: Sure.

Absolutely possible. Significant reforms on this front were made at the end of 2020, however there are still critical policy reforms that could come up in this arena. Chiefly, streamlining student loan repayment programs and modifications to some components of the Pell Grant program would not be surprising.

Other HEA programs: Not so much.

For those hoping for reconciliation to take the place of or include elements of a full Higher Education Act reauthorization, the likelihood is much lower. The myriad of programs and rules that have no direct impact on federal spending or saving will likely have to wait for another day. With one caveat — adding mandatory spending to a discretionary program is certainly not out of the question.

When guessing about the final package, there is more to the equation to consider. Among them are the political considerations of particular legislation; what else might be on the table (as we can assume higher education will not be the only issue); and the fact that this spending wish list will need to be paid for — in higher education that too often pits students against students.

All of this points to a more limited list of high-profile, high-prioritized policies that are unlikely to pass in another way. While much is still unclear, one thing is certain: higher ed watchers will need to pay close attention to reconciliation.