Congress, pass the PROSPER Act for federal student aid reform

It has been 53 years since President Lyndon Johnson signed the Higher Education Act into law, and 10 years since it was reauthorized, under President Obama. Over the years, the law — which touches nearly every aspect of higher education — has turned into a special interest bonanza. It shields traditional colleges from marketplace competition, weaves a labyrinthine web of student aid options, packs on the pork, and in the last administration served as a pretext for the Department of Education to invent politically charged regulations.

The PROSPER Act, introduced in December by Rep. Virginia Foxx (R-N.C.), would reauthorize the Higher Education Act and clean up the mess it has become. The bill would streamline federal programs, relax burdensome regulations, forbid the Secretary of Education from acting outside the scope of the law, and protect the key principles of free speech and religious freedom.

{mosads}Today, my organization, the National Association of Scholars released a top-to-bottom review of the PROSPER Act, concluding that it represents the best opportunity to reform higher education in decades. With a few tweaks, the PROSPER Act should be passed at once. Two especially important areas — federal student aid reform and protections for freedom of speech and association — show why.

Currently, federal student aid is a complicated system that encourages students to take on unmanageable debt and incentivizes colleges to raise tuition. The system has six loan programs, numerous grants, and some four dozen options for paying off or getting loans forgiven.

The PROSPER Act simplifies federal student aid, reining in costs and making it easier for students to see their options. It caps the amount of money parents and students can borrow from the federal government. It streamlines federal student aid into a single loan program, a single grant program, and a single repayment program. It eliminates special interest projects, such as public service loan forgiveness, which privileged government employees by forgiving their loans after 10 years of payments.

PROSPER also gives colleges “skin in the game” by making them financial stakeholders in students’ success. Individual programs whose students have low loan repayment rates would become ineligible for accepting federal student loans, forcing these low-performing programs either to improve their quality or to lower their costs. When students drop out, colleges would become liable to repay a portion of the students’ federal aid, creating an incentive to adopt high admissions standards.

The bill misses some important elements of student aid reform, such as making income-share agreements enforceable and requiring colleges to spend a minimum percentage of endowment income. It also maintains the Department of Education’s monopoly on government student aid, rather than transferring financial authority to the states.

But overall, the PROSPER Act does a remarkable job of cutting bureaucratic overgrowth to return federal student aid to its core purpose: helping students who are prepared for college find ways to afford it, without driving up costs.  

The PROSPER Act also takes an important stand for freedom of speech and association, principles that colleges have recently given scant attention. The Act prevents colleges from discriminating against religious student groups by denying them official recognition and other standard benefits, such as access to campus facilities. And it protects the rights of religious institutions to govern themselves in a manner consistent with their religious missions.  

The PROSPER Act also addresses the need for free speech on campus, although its policy changes, while laudable, need to be shored up. Currently, many colleges designate “free speech zones” as the only places students and faculty can engage in public speech. In response, the PROSPER Act offers the “sense of Congress” that free speech zones are “inherently at odds” with the First Amendment — a principled though legally unenforceable statement.   

A key amendment by Rep. Tom Garrett (R-Va.) requires colleges and universities to disclose any speech codes, providing sunlight that will help watchdog organizations and free speech litigators target bad campus policies. The amendment also authorizes the secretary of Education to investigate colleges that are accused of using unpublished rules or selective enforcement to target certain types of speech. This is important for students whose free speech has been abridged, because they currently have little recourse but to file a lawsuit, an expensive and time-consuming endeavor.

These are key changes that go a long way toward restoring freedom of speech on campus. But no bill is perfect, and the PROSPER Act misses some opportunities. It should also authorize the secretary of Education to investigate whether colleges’ policies are actually conducive to free speech in the first place. Colleges should be required to report to Congress annually on the state of free speech on their campuses, including details on any violations of free speech, punishment for offenders, and steps taken to protect free speech going forward. Colleges repeatedly found to be malfeasant at protecting free speech should lose eligibility for Title IV federal student aid.

Students deserve a college education that is rigorous, affordable, dedicated to intellectual freedom, and focused on scholarship, not politicization. The PROSPER Act is a step in the right direction.

Rachelle Peterson is policy director at the National Association of Scholars.