What Can Higher Education Expect From the Trump Administration?

By Jon Fansmith

The stunning election of Republican Donald J. Trump as the 45th president of the United States on Nov. 8 reverberated across campuses and here in Washington. Immediately people began to ask, “What does a Trump presidency mean for me and my institution?”

In any transition to a new presidential administration, there is uncertainty about what comes next. This uncertainty is magnified when—as was the case with the Trump campaign—there were few detailed policy proposals offered. So it’s reasonable to wonder, regardless of your political viewpoint, what a Trump administration will look like for higher education, and what that will mean for federal policy.

The first caveat to any discussion of how a candidate’s campaign promises will translate into actual governing is to keep in mind that implementation can be challenging, time-consuming and uncertain. Remember, promises are easy—details are hard. With that in mind, let’s unpack what President-elect Trump and his advisers have said about higher education, and what that might mean for the next four years.

The Role of the Federal Government in Higher Education

As a candidate, Trump repeatedly expressed a belief that government was too large and ineffective, and promised to reduce the role of government in many areas. This position was reflected in repeated calls to eliminate the Department of Education (ED) entirely, or to significantly curtail its role. He also cited reducing burdensome regulations as a key element of his higher education proposals. Considering an incoming administration will have the authority to oversee a number of regulations (such as gainful employment and state authorization) implemented by the Obama administration over the opposition of congressional Republicans, it seems likely there will be significant changes to the recent expansion of regulatory efforts.

On a related note, the Obama administration has long focused regulatory and oversight attention on the for-profit higher education sector, a level of focus that is often credited with the declines in enrollment and closing of for-profit institutions in recent years. While Trump has not made the kind of explicit endorsements of the for-profit education sector that Mitt Romney did in 2012, it’s reasonable to assume that at the very least, a Trump administration would not be nearly as zealous in its attention to those institutions.

Another area where a Trump administration may make significant changes to the federal role in higher education concerns the oversight role of ED. During the campaign, Trump advisers discussed transferring the Office for Civil Rights (OCR) at the Education Department (which is the unit responsible for the recent high-profile investigations of how institutions handle sexual assault cases, among other issues) to the Department of Justice, or eliminating its functions entirely. OCR has come under scrutiny, especially from Senate Republicans, for exceeding its authority, and this move would likely be intended to curtail those efforts.

Student Loans

The one area where Trump as a candidate provided some detailed information is in the area of student loans.

In his campaign’s sole higher education-focused speech, Trump said he would modify the terms of the most recent income-based repayment (IBR) plan to make them more generous to borrowers than what President Obama has put in place. The Trump proposal would cap the income that can be used for loan repayment at 12.5 percent (compared to the current 10 percent), but more significantly, it would allow for forgiveness of the loans after 15 years of repayment.

Without other changes to existing law, this would make the plan significantly more generous to borrowers, especially those who have very large loan balances, primarily graduate students. While Trump had previously opposed loan forgiveness, that position predated his IBR proposal by a year, and this seems to represent an evolution in his thinking. Without getting into the minutiae of federal budgeting, any change to make IBR more generous would require billions in new funding for the program, a tough sell in a fiscal climate where overall spending is scheduled to decrease.

In other areas of student lending, it’s less clear what a Trump administration would support. In a November 2015 campaign document, Trump opposed the idea of the federal government generating revenue on student loans, saying, “There is no reason the federal government should profit from student loans. These student loans are probably one of the only things that the government shouldn’t make money from, and yet it does.” This echoes similar calls, most notably from Sen. Elizabeth Warren (D-MA), to reset the interest rates on student loans to match the federal interbank lending rate. Like expanding IBR, any attempt to eliminate the revenue generated by student loans would be tremendously costly, in the neighborhood of hundreds of billions of dollars over 10 years.

This proposal also appears to contradict the Trump campaign’s proposal to return private lenders to the student loan system. This has been mentioned several times by his advisers, though exactly what it means is not clear. The most likely interpretation is a return to the Federal Family Education Loan (FFEL) system in which the federal government provides the loan capital to banks and subsidizes the loans made to students. FFEL was eliminated in 2010 as part of the legislative package responsible for the passage of the Affordable Care Act, or Obamacare. Restoring FFEL would be expensive, though. Under current rules, because of the costs of the subsidies, replacing the existing Direct Loan Program with FFEL would (and stop me if you’ve heard this before) cost the government hundreds of billions of dollars in revenue.

However, here may be another approach the campaign had in mind. In an interview with Inside Higher Ed, a Trump higher education campaign adviser talked about student lending being “marketplace and market driven,” with “local banks lending to local students.” As part of that approach, schools and banks would be allowed to consider factors beyond family income. In particular, the adviser cited a student’s degree field and likely occupation as criteria that could and should be considered as part of determining loan eligibility. Obviously, this would be a significant shift from nearly 60 years of federal student lending.

Accountability

One area where both Democratic candidate Hillary Clinton and Trump agreed was the concept of establishing new federal accountability measures for institutions of higher education.

While few of these proposals were clearly defined during the campaign, there was common interest in risk-sharing or “skin in the game” measures, where institutions would have some financial responsibility for their students’ outcomes. In existing legislative proposals, this concept revolves around institutions paying back a percentage of their students’ defaulted or unpaid loans, with the amount and the triggering levels varying by proposal. Similar proposals would eliminate the ability to participate in Title IV aid programs if student default/repayment rates reach or stay at certain levels. Preliminary research indicates that such proposals would disproportionately impact institutions enrolling large numbers of low-income or underrepresented students, but there is strong bipartisan interest in the concept.

Other accountability proposals offered by the Trump campaign are less clear. During the speech on higher education, President-elect Trump specifically targeted institutions with large endowments, saying that institutions need “to spend endowments on their students, not themselves…They need to use that money to cut the college debt and cut tuition,” or face losing their tax exempt status. In the same speech, Trump also stated his belief that institutions could easily reduce costs by eliminating what he termed “tremendous bloat” in their administrative functions. How these positions would be reflected in policy proposals is uncertain, but the emphasis on endowments reflects a growing interest among congressional Republicans in the last year, particularly regarding the idea, not yet put forward as a formal piece of legislation, of tying federally determined spending policies to the possible elimination of tax exempt status.

Foreign and Undocumented Students

Trump’s positions on immigration during the campaign were among his most controversial, but also were critical in gaining early primary support. While the broader approach to undocumented immigrants will have little immediate impact on colleges and universities, there are a number of significant policy issues around immigration and higher education.

The most urgent of these would be how the new administration will handle the approximately 750,000 undocumented young people who have registered under the Obama administration’s Deferred Action for Childhood Arrivals (DACA) program.

This program extended legal protection to undocumented immigrants who were brought to this country as children and meet certain conditions, including military service or enrollment in higher education. Because the program was created under executive order, it would be easy for the new administration to simply cancel the program through another executive order, or (and more likely) stop issuing new permits and allow existing permits to expire, pushing those in the program back into illegal status.

The other areas where a new administration’s views on immigration may impact colleges and universities is in the area of legal immigrants, particularly foreign students and skilled workers on H-1B visas.

During the campaign, President-elect Trump made several statements about foreign skilled workers taking jobs from American workers, and his broader statements on immigration from countries perceived as supporting terrorism would indicate a policy preference for tightening or even eliminating pathways to visa eligibility for residents from large portions of the world. Even without explicit bans, calls by the campaign for “extreme vetting” and “ideological tests” would likely have a chilling effect on applications and, similarly to after 9/11, bureaucratic procedures at multiple levels could produce a dramatic reduction in the number of approved applications and the pace at which they’re approved. Additionally, it would be reasonable to expect more stringent restrictions on American academics’ ability to travel to and engage with portions of the world perceived as threatening by the new administration.

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Obviously, the totality of this agenda would represent a massive shift in the federal government’s relationship with colleges and universities. But it’s important to remember that there are a number of stakeholders involved in shaping the formulation of policy, and few presidential proposals are enacted without undergoing major reshaping as they work their way through the process. Even getting to that stage requires significant effort and the investment of political capital. What the new administration will prioritize among all these options is still very much unclear and ultimately may look very different than these early indications.