From: Veterans Education Success
Date: Thursday, May 22, 2025 at 09:34 AM ET
To: Senate Health, Education, Labor and Pensions Committee
Subject: House Reconciliation Bill
To: Interested Colleagues
From: Barmak Nassirian
Re: Proposed Higher Education Act (HEA) Changes in H.Con.Res.14
Date: April 29, 2025
In the absence of substantial, publicly available modeling and analysis, Congress would be taking a massive multibillion-dollar gamble by enacting unvetted and unproven modifications to an HEA system that affects millions of families and thousands of institutions.
The authors of the changes undoubtedly believe, in good faith, that they have correctly anticipated the interactive effects of the numerous algorithmic changes to eligible costs, aid amounts, and targeted subsidies; however, this belief remains entirely untested and unverified. After 30+ years in higher education financing, I worry that the slightest error in the technical design of the new scheme could bring the entire federal student aid system to a halt. Worse yet, the significant prohibitions on the Secretary’s regulatory authority would make remedying potential problems nearly impossible, since any fixes or workarounds would require legislative action.
As if the proposed system’s most basic functionality were not enough of a concern, the bill eliminates critical HEA accountability provisions on the theory that the new financing scheme would intrinsically prevent institutional misconduct. However, it fails this task on several grounds. First, there is no evidence that the proposed clawback mechanism (“institutional reimbursements”) is a sufficient disincentive against predatory practices. Secondly, , even if they were, the bill’s prohibition on Secretarial regulatory authority would render it impossible to ensure that institutions subject to such clawbacks will be solvent when their reimbursement bills come due. Lastly, the proposed new accountability regime would not even begin tracking student outcomes until 2028-29 which means it would be nearly a decade before a low performing program could ever be held accountable — setting the stage for mass fraud, waste and abuse.
It is important to note that a significant overhaul of the Higher Education Act’s financing provisions is not, in itself, objectionable. The HEA’s existing provisions are the result of incremental changes that have been layered on top of one another, sometimes without sufficient coordination or proper linkages. The attempt to simplify and rationalize the financing system is therefore a worthy endeavor that, if executed well, could improve the system’s efficiency, contain costs, and simplify programs for users. While I believe that the proposed changes take a bold step in that direction, there are grounds for significant concern about the system’s functionality in the aftermath of the contemplated changes.
This bill should be the beginning of deliberations, not the end. The consequences of failure would be dramatic and will be felt almost immediately in the lives of millions of working families. Given the novelty and the unproven nature of the proposed overhaul, the volume of federal dollars at risk, and the adverse economic and social effects of any unintended consequences, policymakers would be well advised to proceed with great caution and much more deliberation than a 24-hour review of the bill’s more than 100 pages of technical language affords them.