While it may feel like the distant past, let’s take a moment to reflect on where we were just a few short weeks ago as 2017 came to a close. At that time, the near constant media coverage of higher ed tax reform negotiations was like a 24-hour storm team covering an unpredictable hurricane as the event of the century.
The interest deduction for student loans will be disallowed! Graduate tuition waivers will be considered taxable income! The sky is falling! Oh, wait. Never mind.
In the end, the final tax reform bill put these controversial changes aside. Instead of a devastating category five hurricane blowing ashore, the storm team was left standing in a stiff breeze with a cloudy sky in the background. Students and the institutions who enroll them could breathe a sigh of relief. But could they?
Looming on the horizon is the Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act, from the House Committee on Education and the Workforce. This bill, which will reauthorize the Higher Education Act, could spark another media frenzy focusing on higher education affordability. How high will anxiety levels rise during the next hype cycle?
Taking the Pulse of Current and Prospective Students
In December 2017, at the height of the initial tax reform debate and during early discussions of PROSPER, Eduventures distributed a five-question survey to adult students who are either currently enrolled or interested in obtaining a degree in the near future. We provided a brief description of some of the policies being considered by congress and asked for students’ heat-of-the-moment reactions.
Remarkably, we received the highest response rate for a student survey in recent memory; a clear sign of interest in this topic. Respondents, who were mostly young millennials—about three-quarters aged 22-24 and a fifth aged 35-44—expressed confusion and concern about their decision to pursue a college degree.
Survey results indicated a broad level of dissatisfaction with the proposed changes to federal tax policy. Significantly, however, while 71% reported that the proposed changes would have forced them to rethink which school to attend, a lower percentage (53%) reported that they would rethink their decision to pursue a degree altogether.
Although the provisions to disallow interest deductions on student loans and to tax graduate tuition waivers as income were not ultimately included in the final bill, the threat of these policies appears to have struck a nerve. Three of the five policies we tested were concerning to a majority of students.
We also asked respondents to share three practical things congress could do to make education more accessible and affordable. We received responses ranging from “100% free college for all,” to “why should congress be involved in education at all?”
Most lay somewhere between these two extremes. Based on our analysis of more than 1,000 comments, we identified six broad themes:
1. Don’t break what’s already broken
“Don’t make it *less* affordable! Not even asking for education to become more affordable right now, just that congress does not take away any current measure that will result in education becoming less affordable than it has been.”
2. Cap interest rates for student loans
“Student Loan interest, how I can get a car loan for 2% interest, but I pay 7% interest on my school loan.”
3. Fund education and focus on state legislatures
“This one may be less realistic, but state legislatures also have a responsibility to help fund higher education.”
4. Protect me from those who are trying to take advantage of me
“Create a law that stops colleges from increasing tuition every year.”
5. Hold institutions accountable
“Force colleges to use less money for increasing unnecessary things like the aesthetics of a university and focus more on education funding.”
6. Lift the student debt burden for millennials
“Help us out. School is so much more expensive; no millennials are going to be able to retire because we will be paying student loans for the next 15 years instead of saving for retirement.”
This survey demonstrates that millennials want to see government, higher education, and employers work more closely together. It also shows that they feel deep-seated angst about the future and they know that higher education must be part of it. At the same time, millennials feel like they are assuming unknown long-term financial risks when they make college choices. And, importantly, they are paying attention.
Is the intensified and volatile public discourse on higher education shifting the risk calculus for students? Quite possibly, yes.
With the 2017 tax reform package enacted, congressional debates over the PROSPER Act will soon emerge as the next chapter of public discourse on higher education. Institutions would be well-served to pay close attention to how their students perceive and participate in these discussions. Eduventures will continue to keep a pulse on student attitudes regarding the value and cost of attending school.
As many institutions struggle to grow enrollment, the search for new academic programs is often highly competitive. Your institution may have identified some great new program opportunities, yet it is almost certain your competitors are coming to similar conclusions. How do you then work successfully with your deans and programs to put that into action?
Kim Reid and The Ohio State University will share keen insight and best practices into effective and efficient program innovation.
Discussion topics to include:
- The Due Diligence of Market Research
- Strategies for Managing a Successful Launch