With the change in the administration this November, the higher education industry is in line for some likely changes over the next four years. Case in point is the following tweet from @JoeBiden: “In the 21st century, twelve years of school isn’t enough. That’s why under the Biden-Harris plan, community college will be free – and public colleges and universities will be tuition-free for families earning less than $125,000 a year.”
The collective gasp should be nothing new for those with a long history in the industry, as the reversals in policy with an administrative change is to be expected. In the meantime, there remains a lot of questions:
- Will regulation of the proprietary schools return to Obama-era levels?
- Are the gainful employment rules getting dusted off and coming back?
- Will there be additional Higher Education Emergency Relief Fund (HEERF) aid coming? Will it be available to all students and institutions?
- Is 90/10 changing to 85/15?
- Will Veterans Assistance (VA) education benefits be excluded from the 90/10 calculation? What about the second round of HEERF monies?
- Does the Accrediting Council for Independent Colleges and Schools (ACICS) have a future (as of March 5, 2021, it looks like the answer is no)?
- Is distance learning here to stay?
Unfortunately, answers to all those questions aren’t yet available, and because of that, navigating the landscape will be a challenging task.
A new administration often comes with shifts and refinements of the strategies and goals of the Department of Education. This is typically reflected in a change from one Education Secretary to a new one.
Moving from Betsy Devos to Miguel Cardona – with his experience in elementary and secondary education – is a stark contrast that could alter the landscape of higher education. Additionally, the administration’s overall preference for public higher education will influence the rules and regulations over the next four year. While significant changes have taken a fair amount of time in the past, movement so far with the new administration has been swift.
What to do in this Uncertain Landscape?
Plan
Planning and introspection are key in this environment. Now is the time to get your institution in order. Pull out your financial aid policies and procedures and see if they are up-to-date and address all of the requirements. Go through and review any contracts with third-party servicers to make sure they are current and reflect the services that you use. Develop a training plan to keep your financial aid staff privy to any coming changes. It’s much easier to build from a solid foundation when dealing with forthcoming change.
If you operate a proprietary school, take a look at your 90/10 calculation and determine what the impact would be if the proposed changes pass. How reliant has your institution been on VA benefits with meeting that requirement? If your school has a clinic that helps meet the 10%, how has COVID-19 impacted that? If HEERF II monies count in the calculation, be aware of what the implications would be on your percentages before drawing down and awarding those monies.
Review Your Programs
Introspection shouldn’t be limited to financial aid matters. Take a hard look at your programs and see if they work with the changing post-pandemic economy. Determine what role distance education will play in your institution over the next few years. If you have a succession plan lined up in the near or even not so near future, revisit it to see if it makes sense in the new landscape.
While there are questions about the future direction that the Department of Education heads, having a Sikich Title IV audit expert by your side as a navigator in this changing time is a valuable tool.
About our authors
Tim Gaber
Tim Gaber, CPA, is a director in audit and assurance services with over 16 years of experience. Tim serves Title IV schools and other entities with their audit requirements and other needs.
Joe Knutte
Joe Knutte is a director of business development with years of experience serving the for-profit institution and higher education industries.
