A bill in Congress that promises to lower the cost of college education has drawn criticism from officials at Stanford, who say the bill is burdensome and possibly harmful in requiring colleges to report data on how they allocate their money.
The College Opportunity and Affordability Act seeks to reduce costs by publishing a list of the nation's most expensive colleges and cracking down on unethical relationships between colleges and student loan companies. The bill was passed earlier this month by the House of Representatives, and a similar bill has been passed by the Senate. Congress hopes to combine the House and Senate versions and get the bill to the president's desk by the end of March, when the previous Higher Education Act expires.
But Larry Horton, director of government and community relations at Stanford, was not excited about the bill.
"I don't think there is much to be enthusiastic about," Horton said. "The real question is how harmful the provisions are."
The Bush administration issued a statement criticizing many aspects of the bill but stopped short of threatening a veto. The administration objected to a provision that would limit the Department of Education's ability to regulate colleges through the accreditation process.
But Stanford has been critical of other portions of the bill, especially those that increase financial reporting requirements for the University.
"We are very concerned about unnecessary and unproductive reporting requirements," Horton said. "We share the same views of the University of California and other major universities: we want to make sure that any reporting that is done is productive and would accomplish something."
Horton emphasized that reporting requirements can create a significant burden for the University.
"When it comes to reporting requirements, what sounds like an innocent reporting requirement can sometimes be very difficult, and not very productive," Horton said. "But a lot of information about us is available publicly through our financial statements."
Of particular concern to legislators is the rate at which colleges spend their ever-increasing endowments. An amendment to the bill that would have required colleges to spend five percent of their endowment each year has been withdrawn in favor of a provision requiring colleges to report simply how much they spend of their endowment funds each year.
"The trustees have traditionally been very prudent in using the endowment," Horton said. "There is a responsibility to maintain the buying power of the endowment for the future as well as using some of the income for current purposes."
Stanford's trustees increased the annual endowment payout last year to 5.5 percent, which exceeds the minimum proposed by Congress and helped make possible sweeping changes to the University's financial aid program announced last week.
Still, not all of the new bill is bad for Stanford, according to Horton.
"Things like the student loan programs do have to be reauthorized by Congress, and we certainly want those programs to be reauthorized," he said.
"In the past only grad students have been eligible for financial aid for language area studies," Horton added. "This new bill will make undergraduates eligible."
After Stanford's lobbyists and associations of colleges get the chance to talk to Congressmen as they work to combine the House and Senate versions of the bill, Horton is optimistic that the legislation will not hurt the University.
"We are working through the bills," Horton said, "and I think we will end up with a satisfactory bill."
© 2008 The Stanford Daily via U-WIRE