Government Fingerprints on Higher Education

[bluhoodie]

US Congress Again Attempts to Put Its Fingerprints on Higher Education

by Noah Carp, Outsell, Affiliate Analyst - Boston, Massachusetts

The bill reauthorizing the Higher Education Act was recently passed in the US House of Representatives by a wide margin (354 votes to 58). Postsecondary institutions will have to adhere to a variety of demanding regulations aimed at creating a greater level of honesty and corporate citizenship in this market; these same directives will shape business opportunities for the companies, including publishers and financial aid firms, serving these institutions.

Important Details: With the approval of the College Opportunity and Affordability Act (H.R. 4137), the House has strengthened its commitment to the funding of higher education and the delivery of consumer-friendly information on college tuition and available funding sources. Targeting these objectives establishes an important foundation to ensure that students have greater access to postsecondary education, and that institutions adhere to a higher code of business ethics.
• In addition, this legislation moves forward on a number of fronts, including taking steps to:
• Create new grant programs for colleges and students;
• Simplify the application process for federal student financial aid;
• Broaden Pell Grant scholarships to provide year-round financing;
• Increase the financial aid available to veterans and military families;
• Relax stipulations governing the eligibility of for-profit schools to award federal student financial aid;
• Establish a pilot program to help schools put together textbook rental programs;
• Help schools enhance campus safety and develop mechanisms for schools to recover following disasters; and
• Necessitate new reporting requirements related to credit transfers and relationships with student loan companies (e.g., identification of preferred lenders and reasons contributing to the development of these relationships).
While the Senate passed S. 1642, its own version of legislation to reauthorize the Higher Education Act in July 2007, the next step is for the House and Senate to conference on the legislation and to reconcile the differences between these two proposals.

One of the implications cited by the author:

While college students already resort to sharing books and purchasing used texts, this legislation sets the wheels in motion to place additional pressure on publishers. By establishing a pilot program to help schools offer textbook rental (see Insights 13 February 2007, Illinois: Textbook Rental Just Won't Work) as an option for students, the legislation will undoubtedly force publishers to re-examine pricing. With digital textbook adoption thus far limited in higher education, there is an untapped opportunity for publishers. Now is the time for these companies to explore how to use digital content to protect their textbook revenue stream. While this strategy will require publishers to architect their pricing to compete with used and rental options, as well as taking into consideration the growing availability of open (i.e., free) content, the alternative is a bleaker picture, with companies perhaps realizing a considerable loss of these dollars.