An Education Road Map for the 118th Congress

Report Education

An Education Road Map for the 118th Congress

November 28, 2022 21 min read Download Report

Summary

As Washington prepares to welcome a new Congress in January 2023, incoming policymakers who want to improve education for every student and give parents more control over where and how their children are educated have many policy options at their disposal. New Members of Congress who want to protect taxpayers and rein in college costs also have the tools to do so. It is well past time for Congress to allow more choices among existing preschool and K–12 programs in areas under its jurisdiction, and to curb government spending and higher education handouts.

Key Takeaways

The incoming Congress has an enormous opportunity to improve education for every student and give parents more control over their children’s education.

It is well past time for Congress to allow more choices among existing preschool and K–12 public programs and to curb wasteful education spending and handouts.

Members also have the tools to rein in out-of-control college costs without making federal taxpayers foot the bill for student loan debt.

The 118th Congress will open its doors on January 3, 2023. A new class of Congressmen provides new opportunities to right-size federal intervention in education and give parents more choices about where and how their children are educated. A host of issues—from preschool through college affordability, to education choice and parental rights—require Congress’s attention.

Early Childhood Education and Care

Following are the steps that Congress should take to put parents and young children first in education and care. The 118th Congress should:

Reduce Barriers to Informal Childcare Through a “Household Employee” Safe Harbor. Currently, if parents pay an individual more than $2,400 annually for childcare services performed in the family home, the parents are required to treat that individual as an employee and must withhold taxes from the individual’s pay every pay period. This is a burdensome process that requires multiple calculations for Social Security, Medicare, and sick and family leave, and submitting quarterly (at least) tax payments to the U.S. Treasury Department. In order to provide more flexibility and options to parents, Congress should allow individuals who provide child and family support services to be treated as contractors to reduce the onerous federal compliance burden for the caregiver and family. States should do likewise.

Make Existing Preschool Programs Work Better for Families. Congress established the Child Care Development Fund (CCDF) in 1990 within the Child Care and Development Block Grant to subsidize the childcare expenses of low-income families through vouchers for approved childcare providers. As the Administration for Children and Families at the Department of Health and Human Services details, the CCDF “provides parents with the choice of a range of provider settings and types—including centers, family childcare homes, relatives, and faith-based providers.”REF Although early childhood education and care is the domain of families, private providers, and states and localities—in that order—this federal program offers families choices in childcare.

By contrast, the ineffectiveREF federal Head Start program only provides access to local Head Start centers, rather than directly funding families and allowing them to choose childcare arrangements that are both more effective and align with their values. As explained in a recent Heritage Foundation Backgrounder, “Per-child spending on Head Start, which is close to $10,000 per year, exceeds the average cost of childcare in 37 states even while offering fewer hours of care than state-based programs.”REF Although the federal government should not be involved in the provision of early childhood education and care in the first place, short of elimination, programs, such as Head Start, should be transferred to the Child Care and Development Block Grant in order to give participating families a variety of options.

Allow 529 Savings Accounts to Cover Preschool and Childcare Expenses. In 2017, Congress expanded the allowable uses of 529 savings plans to include K–12 expenses like private school tuition, in addition to the existing higher education uses in federal law. 529 savings plans are investment vehicles that allow parents to save for their children’s college education. These accounts, expanded as part of the Tax Cuts and Jobs Act of 2017, allow accrued interest to grow tax-free as long as the funds are used for qualified education expenses. Congress should expand the allowable uses of 529 plans so that parents can also pay for preschool and childcare expenses, allowing families to save for early childhood education and care costs.

Elementary and Secondary Education

Following are the steps that Congress should take to put parents and students first in elementary and secondary education. The 118th Congress should:

Secure and Expand the D.C. Opportunity Scholarship Program (OSP). Federal lawmakers have long neglected the nation’s only federally funded K–12 private school scholarship, the OSP. This voucher opportunity for children from low-income families in Washington, DC, has been available to disadvantaged children in the District since 2003. Yet federal officials have limited program participation to a figure well below the number of eligible students or even the number of scholarship applications.REF

Approximately 89,000 children attended schools in the District of Columbia in the Fall of 2021, and nearly one in three District families with school-age children is eligible to apply.REF Just under 2,000 children are currently participating, however. More than 3,000 students applied for the current school year (2022–2023).REF Federal officials have restricted participation through appropriations bills, and President Barack Obama’s Administration even tried to eliminate the OSP altogether.REF

Again, these scholarships only serve children in need: Nearly half (45 percent) of scholarship recipients receive SNAP or TANF benefits, or both, and the average annual earned income for families with children participating in the program is $21,830.REF For the 2022–2023 school year, the OSP will offer scholarships worth up to $10,200 for elementary school and middle school students and scholarships worth up to $15,300 for high school students—approximately half the per student taxpayer expenditure for children in assigned District schools according to the latest federal data.REF Federal lawmakers should expand eligibility for this scholarship option so that every child in Washington, DC, may access scholarship funding. Furthermore, federal officials should expand the uses of the scholarships so that parents can purchase multiple education products and services simultaneously, converting the scholarships into education savings accounts, similar to the accounts created by state lawmakers in Arizona, Florida, North Carolina, and West Virginia.

Prohibit Compelled Speech in District of Columbia Public Schools (DCPS). Federal lawmakers should also consider proposals that reinforce the Civil Rights Act of 1964 and prohibit racial discrimination in DCPS. Congress has authority over DCPS and should prohibit DC schools from requiring personnel or students to affirm or profess any political or social ideology, especially concepts and beliefs that contradict principles of U.S. civil rights laws. Teachers and students should not be required to discuss contemporary political or public policy issues without parental consent, and individuals should not be required to treat others differently based on race, ethnicity, sex, or national origin. These provisions do not prevent educators and students from discussing current or historical events—the provisions only prevent students, as well as teachers, from being required to profess belief in, adopt, or advocate ideological content.

Federal lawmakers should make DCPS a model for the rest of the nation in school choice, and by rejecting the application of “critical race theory” and “queer theory” to school lessons and activities. By prohibiting compelled speech, school personnel and students also would be protected from being required to refer to a student by a pronoun that does not correspond to the student’s biological sex. A prohibition on compelled speech protects educators from acting in a way that violates objective biological facts and, potentially, their personal beliefs and values.

Establish a Parent’s Bill of Rights. Federal lawmakers can also consider a parent’s bill of rights, though Members of Congress should be careful not to expand the federal footprint in state and local education policy. Federal officials should consider a proposal that concisely confirms that a parent is a child’s primary caregiver. Federal officials can consider the additional provisions commonly found in state-level parental bills of rights, such as academic transparency provisions, along with prohibitions on compelled speech and health-related requirements, but only for school systems under federal authority, such as DCPS and schools on military bases and tribal lands. Provisions about parents’ right to direct the upbringing, education, and religious and moral instruction for their children, however, is legislative language that federal lawmakers could apply to all public schools in the U.S.

Allow Portability for Individuals with Disabilities Education Act (IDEA) and Title I Funds. IDEA is the federal law governing taxpayer spending on K–12 students with special needs. The law stipulates that students have a right to a “free and appropriate education,” and 95 percent of children with special needs attend assigned public schools.REF The education is not always appropriate, however: Special education is fraught with legal battles.REF Some argue that the education of children with special needs is the most litigated area of K–12 education.REF Thus, despite a nearly 50-year-old federal law that sees regular revision and reauthorization and approximately $13.5 billion per year in federal taxpayer spending, parents still struggle to establish intervention plans for their student with public school district officials about the physical and educational requirements for their child with special needs.

State-level parental choice programs often exclusively serve children with special needs for these very reasons. Florida, Oklahoma, Tennessee, Mississippi, South Carolina, and North Carolina, to name a few states, all have education savings accounts or private K–12 school scholarship options for children with special needs. Federal lawmakers should consider revisions to IDEA that require that a child’s portion of the federal taxpayer spending under the law be made available directly to parents, so that they can choose how and where their child learns. IDEA already allows families to choose a private school under certain conditions, but federal officials should update the law so that families can use their child’s IDEA spending for textbooks, education therapies, personal tutors, and other learning expenses, similar to the way in which parents use education savings accounts in Arizona and Florida. These micro-education savings accounts would give the families of children with special needs approximately $1,800 per child to help meet a child’s unique learning requirements.REF

Members of Congress and the White House should consider a similar update to Title I of the Elementary and Secondary Education Act (ESEA). Title I is the largest portion of federal taxpayer spending under this law which governs Washington’s responsibilities for K–12 public and private schools. Federal taxpayers committed $16.3 billion to Title I in fiscal year (FY) 2019, spending that is dedicated to students in low-income areas of the U.S.REF This spending amounts to more than $1,400 per child in a large city and approximately $1,300 per student in a remote, rural area.REF

Students attending schools that receive Title I money should also have access to micro-education savings accounts that allow parents to choose how and where their children learn, according to his or her needs. Parents should be allowed to use their child’s Title I resources to help to pay for private learning options including tutoring services and curricular materials.

Provide Education Savings Accounts to Military-Connected Families and Students on Tribal Lands. In addition to DCPS, Congress has purview over schools on military bases and tribal lands. Additionally, under the National Defense Authorization Act (NDAA), federal monies are provided to public school districts that enroll students from military families.REF Federal lawmakers should consider proposals to give military-connected families a portion of their child’s spending under the NDAA to use in an education savings account. Families could purchase private school tuition, textbooks, online classes, and other education products and services, similar to the account options in Arizona and Florida described above. Likewise, federal officials can also create account options for children in tribal lands, including Bureau of Indian Education schools. Arizona pioneered this concept in 2015 by allowing students living on tribal lands to access the state’s education savings accounts.REF Federal officials should consider allowing all children on tribal lands to access quality learning options through accounts using a student’s portion of federal taxpayer funding for schools for Native American students.

Higher Education

Following are the steps that Congress should take to put students first in higher education. The 118th Congress should:

Reform Federal Student Loans. Since the 1991–1992 academic year, total federal aid (including student loans and grants) increased by 295 percent.REF In response, colleges and universities more than doubled their tuition and fees in real terms.REF This increase in federal subsidies has been largely captured by universities, which increase tuition $1 for every 60 cents received in subsidized student loans.REF

Much of that increase has been fueled by graduate school borrowing. The proportion of Americans ages 35 to 44 with student loan debt more than doubled from 2007 to 2019, from 15 percent to 34 percent, likely reflecting an increase in the number of graduate students.REF

Current federal loan programs fail to distinguish between graduate borrowers who enter fields of study where the return on investment (ROI) is statistically high, and those entering fields of study where the ROI is statistically low. For example, many borrowers pursue a master’s or PhD in low ROI fields (such as master’s degrees in social work or communications, or PhDs in sociology or education) where, in the private lending market, the limited ROI would be priced into interest rates. Yet federal graduate loan programs artificially lower interest rates and income-driven repayment plans encourage individuals to overborrow to finance degrees in these low-ROI fields. Grad PLUS loans also expose taxpayers to considerable risk if borrowers are unable to repay their federal loans upon program completion. Shifting those loans to the private market where they were almost exclusively financed prior to 2006 would offer a needed course correction and insulate taxpayers from the risky choices of gender studies majors, for example.

The second type of graduate borrower is the student pursuing a field of study with a statistically high ROI, such as those borrowers attending law school or medical school. As with their likely low-ROI counterparts, the loans of these statistically high-ROI borrowers should also be financed through the private lending market—but for different reasons. Aspiring doctors and lawyers will have little trouble securing a loan at a favorable interest rate in the private market, since lenders can be confident these borrowers will be upper-income earners able to repay their loans in the future. Therefore, there is no “market failure” that the government needs to rectify with its involvement.

For both categories of graduate borrower—the statistically risky PhD or the future upper-income-earning-student—using the federal taxpayer as a graduate student loan lender is inappropriate. Congress should eliminate the Grad PLUS loan program, introduced in 2006 and which has since taken the place of the bulk of private lending to graduate students, in order to restore the vibrant private lending market.

The Parent PLUS loan component of PLUS should also end. Congress created Parent PLUS loans in 1980 and eliminated the limit on borrowing through the program in 1992. Parent PLUS allows parents to take out student loans for their child’s undergraduate expenses, with the volume of those loans more than doubling from 2009 to 2019 for parents whose children attend public universities.REF Parents borrow for their children after students have exhausted the Direct Loan program, encouraging entire families to take on debt for college. Like its Graduate PLUS counterpart, Parent PLUS has an inflationary effect on tuition while encouraging families to go into debt.

Ultimately, Congress should phase out the entire federal student loan program to make space for a restoration of the private lending market and other innovative college financing approaches, such as income-share agreements. At a minimum, however, Congress should begin by eliminating the PLUS loan program.

Prohibit Future Student Loan Forgiveness. In 2022, the Biden Administration announced unilateral cancellation of $10,000 in student loans for individuals making up to $125,000 per year ($250,000 per household) and cancellation of $20,000 in student loans for qualifying individuals who had ever received a Pell grant. The executive order, using the legally dubious pretext of “national emergency” found in the Higher Education Relief Opportunities for Students Act of 2003 as its basis, in addition to being inflationary, is unfair to millions of Americans who did not or could not attend college, who worked to pay off their student loans, or who avoided student loan debt through other means, such as working their way through college.REF The executive order also encourages postsecondary institutions to raise their tuition prices, while being regressive by rewarding upper-income earners. The loan cancellation, coupled with continually extended “pauses” on repayment in which interest does not accrue, along with changes to income-driven repayment, are estimated to cost more than $1 trillion over 10 years.REF The U.S. House of Representatives should pass an appropriations amendment to bar the President from issuing any further student loan forgiveness or any subsequent pauses on repayments. Lawmakers should also rescind policies recently announced by the Biden Administration that make income-driven repayment even more generous.

End Public Service Loan Forgiveness (PSLF). The PSLF Program, created in 2007, enables borrowers who work in government or nonprofits to have their loans “forgiven” after making 10 years of payments, rather than the standard 20 years to 25 years of payments for borrowers who entered the private or for-profit sector. More than $10 billion in student loan debts have been cancelled since the program’s inception. This program, which prioritizes government work over private-sector employment, is expensive and an inappropriate use of taxpayer resources. The program is also incredibly generous to college graduates, who on average have over $97,000 in loans forgiven if they qualify for PSLF.REF Congress should eliminate the unfair and expensive PSLF program for new borrowers.

Reform Higher Education Accreditation. For students to access Title IV funding (student loans and grants) they must attend an accredited university. A de facto federal entity, the National Advisory Committee on Institutional Quality and Integrity (NACIQI), serves as the “gatekeeper” to federal student loans and grants, determining who can be an approved accreditor. This accreditation cartel is rife with problems. It fails as a quality assurance measure, rating entire institutions rather than individual courses, and as such, is a poor gauge of the competencies acquired by students. Accreditation has become a barrier to entry, favoring existing higher-education models and thus making it difficult for new, innovative options to emerge. This system that is largely based on inputs has also failed to signal to employers that college graduates are prepared to enter the workforce. “If the accrediting process were applied to automobile inspection, cars would ‘pass’ as long as they had tires, doors, and an engine—without anyone ever turning the key to see if the car actually operated,” explains the American Council of Trustees and Alumni.REF

In order to end the accreditation cartel and allow innovation to flourish in higher education, Congress should decouple federal higher education financing (Title IV funding) from accreditation and allow states to determine which organizations may provide accreditation and provide quality assurance. Students should also be allowed to use their student loans and grants to pay for individual courses and courses of study. As Senator Mike Lee (R–UT), sponsor of the 2019 Higher Education Reform and Opportunity (HERO) Act,REF which would achieve this goal, explained:

Imagine having access to credit and student aid and for a program in computer science accredited by Apple or in music accredited by the New York Philharmonic; college-level history classes on-site at Mount Vernon or Gettysburg; medical-technician training developed by the Mayo Clinic; taking massive, open, online courses offered by the best teachers in the world from your living room or the public library.REF

The HERO Act would allow states to opt out of the federally sanctioned accreditation structure and permit any organizations or entities that states approve to accredit colleges, courses of study, programs, and individual courses. As explained in a 2012 Heritage Foundation Backgrounder, “In the same way a Michelin star is universally respected as a distinction of excellence in the restaurant industry, so too could independent accreditors provide valuable information to prospective employers as well as parents and students.”REF

Cap Indirect Costs. As The Heritage Foundation’s Jay Greene has documented, universities received more than $44 billion in research funding (separate from student loans and grants) from federal taxpayers in 2019 alone. The National Science Foundation and the National Institutes of Health award this funding to finance projects led by researchers based at universities. Through this arrangement, federal taxpayers subsidize both the direct research costs and any overhead costs, also known as “indirect” costs. University-based scholars also receive grants from private foundations for research expenses.

But as Greene explains, “Rarely do foundations reimburse university overhead costs at a rate of more than 15 percent, while most foundations pay zero percent (or no overhead) for research expenses. Taxpayers reimburse the same universities at rates over 60 percent.”REF Not only does this mean that taxpayers end up cross-subsidizing the research agendas of woke billionaire philanthropists, but universities use this indirect cost windfall to fund growth in diversity, equity, and inclusion (DEI) staff, country club–like campuses, and administrative systems of questionable value. Congress should end the practices of overpaying for research and should prohibit federal agencies from paying an indirect rate in excess of the lowest rate that is paid by private organizations for grant research.

Require Colleges to Have Financial Skin in the Game. Cumulative outstanding student loan balances now exceed $1.7 trillion, and analysts estimate that $1.4 trillion of this amount is federal student loan debt. The Biden Administration and many members of the political Left are trying to shift much of that debt onto taxpayers through the misnamed “loan forgiveness” programs—which will drive up tuition and place an unfair burden on working Americans. Congress should block any future loan forgiveness while also pursuing promising alternatives, such as requiring colleges to face financial consequences for student loan defaults. Putting colleges on the hook for the product they are providing by making them responsible for bearing the cost of some portion of their students’ loan defaults holds promise. As the Texas Public Policy Foundation’s Andrew Gillen explains, such “skin-in-the-game” proposals should include a complimentary policy that allows universities to cap the amount that students can borrow. He writes that

a necessary change if we are going to implement skin-in-the-game is actually to have colleges in the game. If we are essentially asking colleges to be co-signers for their students’ loans, then they should be treated as such, including giving them veto power over any loan, as well as the power to reduce how much students can borrow.REF

As a condition of accepting federal Title IX funds—student loans and grants—Congress should require colleges to pay for a portion of the defaulted student loans of their borrowers, while at the same time allowing colleges and universities to cap student borrowing.

Conclusion

As Washington prepares to welcome a new Congress in January 2023, federal policymakers who want to improve education for every student and give parents more control over where and how their children learn have many policy options at their disposal. Incoming Members of Congress who want to protect taxpayers and rein in college costs have the tools to do so. It is well past time for Congress to allow more choices among existing preschool and K–12 programs in areas under its jurisdiction and to curb government spending and higher education handouts.

Jonathan Butcher is the Will Skillman Fellow in Education in the Center for Education Policy at The Heritage Foundation. Lindsey Burke, PhD, is Director of the Center for Education Policy, and the Mark A. Kolokotrones Fellow in Education, at The Heritage Foundation.

Authors

butcher
Jonathan Butcher

Will Skillman Fellow in Education

Lindsey Burke
Lindsey Burke, Ph.D.

Director, Center for Education Policy