The morning after the 2016 election, I wrote that I expected the incoming Trump administration to take a step back on accountability for the for-profit college sector. Rescinding
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The morning after the 2016 election, I wrote that I expected the incoming Trump administration to take a step back on accountability for the for-profit college sector. Rescinding Obama-era regulations like gainful employment and borrower defense to repayment were some of the Trump administration’s greatest policy successes. President Trump spent most of his first two years in office focusing on a successful tax-reform effort that included a tax on the wealthiest colleges’ endowments and an unsuccessful health-care-reform effort. Once Democrats took control of the House of Representatives in 2018, legislative action ground to a screeching halt as Democrats and Republicans failed to agree on basically everything.
Given how politically polarized America has become, major legislation is going to be extremely difficult to pass.
Fast-forward to 2021. Democrats will continue to maintain control of the House of Representatives, even after potentially losing a few seats. Their hope of gaining solid control of the Senate, however, has dimmed, even if at least one seat isn’t determined until a run-off in January.
The best-case scenario for Democrats is to have 51 seats on January 20, which would leave little room for error against a united Republican Party. The most likely outcome is Republicans maintaining narrow control of the Senate.
Given how politically polarized America has become, major legislation is going to be extremely difficult to pass. The most pressing legislation for higher education is another coronavirus-relief package, which could make the difference between some colleges staying open for the spring or closing their doors forever.
If Democrats were able to reach 50 seats in the Senate, they could proceed in two different ways to support higher education. One option would be to wait to pass a single large relief bill in early 2021. The other option would be to agree to a smaller bill with Republicans now that contains less money for state governments, while preparing to pass a second bill later to meet their funding goals.
This means that most of a Biden administration’s policy successes will happen through executive action, continuing a pattern from the last two administrations. At the very least, I expect the Biden administration to rescind nearly every Trump-era regulation. Gainful employment and borrower defense to repayment will be back in place as soon as the Department of Education can navigate the regulatory process, which may not be until 2022 or 2023 due to required public-comment periods and internal reviews. Other regulatory actions that Democrats and the higher-education lobby abhor, like on immigration, will be repealed as soon as possible.
The Trump administration also used its executive authority to suspend most federal student-loan payments through December 31 on account of the pandemic. The higher-education lobby is pushing for Secretary DeVos to continue suspending payments through September 2021 or until the unemployment rate stays below 8 percent for three months. I expect the Biden administration to support that plan, which means borrowers will go at least 18 months without making any payments.
After that, resuming payments will be an administrative nightmare for the Department of Education and student-loan servicers, and become a political nightmare as millions of borrowers incur an expense that had not been present for a long while. The Biden administration may not go as far as Sen. Elizabeth Warren and the left wing of the party want them to go in terms of canceling debt through executive action, but suspending payments for years may lead to the same outcome.
President Obama repeatedly said in justifying his push toward using executive authority: “I’ve got a pen, and I’ve got a phone.” The Trump administration took advantage of executive authority to undo many Obama-era regulations, but left itself at risk of its own decisions being overturned by a future president.
Because Democrats are unlikely to have solid control of Congress, the Biden administration will most likely rely on regulations to advance its policy goals. This regulatory seesaw will probably continue for years to come. In such a polarized political environment, colleges over the next four years will have to celebrate any wins they can get through the executive branch — and only hope that those wins are more than temporary.