Government muddling could be US universities’ best hope

The Trump administration has no significant strategy related to higher education. There is none of the normal rhetoric, never mind action, about its role in meeting labour needs, advancing technology or promoting a more equitable society.

Yet there are innumerable Trump initiatives that could have a big impact on colleges and universities. In May, the administration outlined a federal budget that promised a nightmare scenario.

The Department of Education’s budget would be slashed by $9 billion (£6.8 billion), eliminating many federal student loan programmes and reducing aid for low-income students. Substantial reductions for science were also proposed: the National Science Foundation and the National Institutes for Health would face cuts of 11 per cent and 18 per cent, respectively.

Donald Trump sought to eliminate the National Endowment for the Arts and the National Endowment for the Humanities – both small blips in the budget but programmes disliked by ultra-conservatives. The Environmental Protection Agency was also to lose much of its funding. Each of these agencies spends a portion of its budget on university programmes.

Trump and congressional Republicans seek limits to immigration in ways that could deeply affect universities. The future of the Deferred Action for Childhood Arrivals (DACA) programme – which allows those who came to the US illegally at a young age to enrol in higher education and to access federal financial aid – is unclear. There is also a plan to severely reduce the number of visas for foreign nationals entering the US job market, including university posts.

Attempts at repealing and replacing the Affordable Care Act (known as Obamacare) posed a major threat to funding for public higher education because they would have pushed more of the costs of providing healthcare on to the states. Most state funding is locked up as entitlements, such as pensions and schools; funding for colleges and universities is part of the “discretionary” budgets – about 10 per cent of total expenditures. One iteration of the repeal-and-replace effort planned large cuts to Medicare and Medicaid – federal funding to states for elderly and low-income Americans – that, combined with retrenching at the NIH, would eviscerate university-run hospitals. Universities would then face intense competition for a shrinking part of state budgets. In that debate, healthcare might win out over spending on higher education.

The good news is that the most recent attempt at repeal-and-replace, the Graham-Cassidy bill, didn’t even get a Senate vote. Trump’s budget is also being reviewed by Congress, with many Republicans voicing opposition to large cuts to academic research (which they typically see as a form of corporate welfare, justified because it fosters innovation and economic growth). The Senate’s Republican-chaired Appropriations Committee has recommended increases for the NIH and Pell Grants for low-income students. And John Culberson, the Republican chair of the House committee that reviews science funding, says that he will reverse Trump’s proposed NSF cuts.

But the US is in a volatile political environment, with an unorthodox president who thirsts for a legislative win, without concern for actual policy outcomes. Both he and congressional Republicans are seemingly united in identifying massive tax cuts as their best shot to get something done.

Harking back to the mantra of supply-side economics and the Laffer curve, Treasury secretary Steve Mnuchin claims that tax cuts will pay for themselves in the economic activity they spark and the future revenue that creates. But the Committee for a Responsible Federal Budget, a budget watchdog group, says that the plan could add $2.2 trillion to the deficit by 2027. Deficit hawks are curiously muted about this, but it looks like Republicans will be forced to seek across-the-board cuts in federal spending to partially pay for the tax cuts. Defence will be spared, but it is hard to imagine that research and student financial aid will be.

Then again, discord among Republicans, and even some real analysis of whatever convoluted plan emerges, could derail or significantly mute the tax-cut euphoria. Muddling through might not be good policymaking, but, for now, it could be higher education’s best hope.

John Aubrey Douglass is senior research fellow – public policy and higher education at the Center for Studies in Higher Education at the University of California, Berkeley. He is the lead author in The New Flagship University: Changing the Paradigm from Global Ranking to National Relevancy (Palgrave Macmillan, 2016). His most recent book, with John N. Hawkins, is Envisioning the Asian New Flagship University: Its Past and Vital Future (Berkeley Public Policy Press). A longer version of this article can be read here.