Thursday, March 20, 2008

Pig Out Time for Lobbyists

By Richard Vedder

The economy may be shaky (although I think the threat may be less than meets the eye), markets may be down, and people may be distressed. But there is one group that is booming this year --higher education lobbyists, who continue to buy their Porsche Boxers and Gucci shoes in record numbers as their billable hours climb nearly exponentially.

To be sure, the Higher Education Act reauthorization, which is forever being delayed, is up for renewal (latest deadline date --April 30). And, as a Congressional Quarterly analysis on yesterday pointed out, the lobbyists are using the Easter recess to work their targets harder than ever. Let me comment a bit on three issues.


The House wants state appropriations for higher ed to be maintained at current levels or above. The Senate is not wild about that idea. What will the conference do? Votes in both houses were quite bipartisan (the Senate vote was 95-0) on the bills currently being reconciled in conference. Against the "maintenance of effort" provision are the state and local government establishments led by the National Council of State Legislators (NCSL) and the National Governors Association (NGA). 44 of the governors have signed on to the NCSL/NGA effort. That is amazing, because you probably could not get 44 of them to endorse the view that George Washington was Father of our country. Against them is US PIRG --Public Interest Research Group, a group that purports to represent student interests. This maintenance of effort idea is one of the five most lunatic ideas emerging in a Congress that is rich in proposing stupid things. States are the best judges as to how their resources should be allocated. I believe the legislation, if adopted, is absolutely unconstitutional in addition to be stupid.


Congress wants to get into the regulation of textbook prices business. Bad idea. Textbook prices are out of control, and some practices of publishers (bundling useless CDs with the book in one price) are obnoxious. The solution, of course, is to find alternatives to expensive textbooks, for individual colleges to set rules applicable on their own campuses, for new efforts (university's buying textbook rights on-line for distribution to students) to be made. Professors should be encouraged to use books longer, to allow students to use multiple editions of the book, etc. A bit of a hassle, but doable. But why should Congress get involved? The American Council of Education is in a tizzy over this one, opposing provisions that would require professors to be informed as to text prices, and for that information to be available to students before registering. It isn't a bad idea, and I am trying to use used textbooks myself to keep text costs down to students. But, again, Congress should not legislate and I agree with ACE's Terry Hartle 100 percent on this one.


For some reason, for profit schools can get no more than 90 percent of their money via student loans. The schools want a liberalized definition of what is included in the 10 percent non-governmental money, for example funds from tax exempt 529 savings plans. That money is privately provided, albeit with tax assistance, and logically should not be considered as "government funds." So I am with the for profits on this issue. US PIRG opposes it,but the for profits are likely to win on this one. As I have indicated previously, I wish the governent would get out of the student loan business (which the for profits would not like), but that also we would not discourage for profits with all sorts of barriers to entry (see an earlier blog today on that one). On the whole, I favor public policies that work to increase the market share of for profits. For profits are taxed, not for profits are subsidized. We should move to a more level playing field.

No comments: