The 2024 election results are in, and higher education will likely change in the coming years. The question is how fast and to what extent. The Department of Education (DOE) is a significant talking point for change at this point. Here is a list of some items that I have heard discussed.
The first thing to separate in the DOE is K-12 and higher Education. This article will focus on the higher education side since that is the area that impacts me and my readers the most.
DOE Background
It was created in 1980 under President Carter. For efficient reasons, it combined different organizations into one department. The DOE’s mission is to ensure equal access to education for all students and promote educational excellence and student achievement.
It currently employs about 4,400 employees but has the fourth-highest discretionary dollar spending in the federal budget. Its 2024 budget is $238 billion, a decrease from the 2023 budget of $278 billion.
Elimination of the Department of Education Rumor
President-elect Trump has announced the elimination of the DOE for various reasons. The issue here is that to eliminate the DOE, some congressional approval would be required. I am not a lawyer to comment on that, but this cannot be done with the stroke of a pen.
Some experts have stated that there are overlaps in other departments. One example is the management of student loans. Should that belong to the treasury? Another example is student civil rights. Does that not belong in the Department of Justice? These are just a few of the overlaps being debated.
Another item being discussed is whether more power should be given to the states and some funding distributed at the state level, eliminating duplication.
Consequence of Increased Cost and Complexity
As the cost of a college degree continues to increase, paying for it becomes more complex. With the integration of IRS data, colleges and loan servicers are limited to what they can tell parents and students. Yet families and borrowers expect them to offer answers that they cannot legally answer.
People over the age of 50 are the fastest-growing group of student loan borrowers. Over 62% of student loan dollars are repaid using an Income-Driven Repayment (IDR) method, which is starting to impact more people planning for retirement. The problem is that borrowers expect the loan servicers to provide answers they cannot legally provide since it requires tax and personal financial advice.
Could we see a model similar to the IRS, where the DOE is the rule maker and compliance person? This would change consumers’ expectations by making them pay for advice like we do to have our taxes done.
New Loan Limit Caps
The loan limits have remained the same since 2008. Before the election, new loan limits have been discussed to address this growing problem. The current issue is the PLUS loan for both graduate students and parents. Both are unlimited at this time. The loan limit caps discussed are $20,000 to $35,000 per year.
2024 Election Impact on DOE Summary
There is a great deal of speculation regarding the changes that could result from the elections. On various podcasts, I hear different experts say to take a step back and take a deep breath. The goals have not moved, but maybe the way you need to do them will be different.
As part of this change, the Higher Education Act has yet to be reauthorized since 2008. It has been on temporary extension each year. No one in Washington or Higher Ed was worried about that. We have colleges that cost over $90K per year and a major demographic swing in college admissions. Higher Education will be changing anyway.
