Friend or foe? Sector awaits the sharp end in US poll

After months of mud-slinging, gaffes and the plastering of campaign ads across every swing state, the US presidential election is heading into the final straight.

Americans go to the polls on 6 November to choose between the incumbent Democrat, Barack Obama, and his Republican challenger, Mitt Romney, the former governor of Massachusetts.

The economy is undoubtedly the main focus of the election. Last month some 80 per cent of US voters polled by Rasmussen Reports rated the issue as "very important".

But rising tuition fees and potential cuts to federal research budgets mean the election's outcome will have an impact on higher education, even if these are not typically seen as central issues for the general public.

Student funding is one of the biggest areas of contention. As an important route through which federal cash flows to universities, it also has a large impact across the sector.

Cash-strapped states have made drastic cuts to universities' budgets in recent years, with state funding for higher education falling to a 25-year low in 2011 and students picking up the bill in higher fees.

The current administration has sought to replace some of these cuts through federal student loans and grants. This is funding that is likely to be at risk from cost-cutting in the wake of a Republican presidential victory, according to Terry Hartle, senior vice-president of the American Council on Education.

Mr Obama has increased national spending on the Pell Grant programme, which aids the lowest-income students, to $36 billion (£22.3 billion) this year from $18 billion in 2008-09, funding an additional 3.6 million students. Federal spending on student loans has increased on a similar scale.

The Obama administration's focus on students has also included a one-year extension to the subsidised 3.4 per cent federal loan interest rate and the signing of a law that will limit loan repayments to 10 per cent of disposable income for some graduates - moves greatly welcomed by the sector.

If Mr Obama wins a second term, he is widely expected to continue to support student aid even in the teeth of possible budget cuts, said Dr Hartle.

"The president has made college students an important part of his pitch in seeking re-election and appeared at an enormous number of campuses. He's committed to student aid and likely to remain that way."

Light touch on for-profits

His Republican challenger, meanwhile, has seized on the issue of rising tuition fees to claim that the system is not working, pointing to the countless graduates who remain unemployed and struggle with debt despite more money being spent on higher education than ever before.

Writing in A Chance for Every Child, the Republicans' policy paper on education published in May, Mr Romney said he would reform higher education by introducing more innovation, choice and competition - although he offered scant detail about how this would be achieved.

One option would be to lighten the regulatory burden on for-profit institutions, a sector Mr Romney thinks the Obama administration has been too hard on, and "forcing (higher education institutions) to compete against new entrants with entirely different models".

Other Republican policies include bringing back a role for banks in the federal loan system - a contentious middleman function the Obama administration abolished in 2010 - and simplifying the current aid system, most likely by cutting some programmes altogether.

Reforming America's immigration system is also on the Republicans' agenda with, perhaps counter-intuitively for a party seen as tough on immigration, a commitment to raise the visa caps for highly skilled foreign workers and to offer permanent residence to foreign students graduating with advanced degrees in specific fields.

On student aid, although the Republican candidate has outlined no specific plans for cuts, Dr Hartle said the consensus is that a Romney administration's overwhelming priority to cut spending would have to hit federal student-aid programmes.

"I don't think Romney dislikes or has it in for higher education, but if your overall goal is to cut federal spending, student aid is going to get wrapped up in that," he added.

Indeed, regardless of specific policies, the overall federal spending budget remains a huge uncertainty for both parties. Congress' inability to agree on the specifics of a deficit reduction plan, to which it is committed by the Budget Control Act of 2011, means that an automatic process of massive cuts will begin on 1 January if no agreement can be reached.

The so-called sequestration would mean 8 per cent cuts across the board, which, together with the ending of a number of tax reliefs, is expected to knock 3 or 4 per cent off the country's national wealth in 2013.

Although not even conservative Republicans want this outcome, in part because defence spending would be cut too, agreeing how and where to make cuts has so far proved impossible.

Lame ducks and hard choices

Agreeing a plan will be left to a lame-duck session of Congress, one sitting after the general election and featuring some legislators who may have lost their seats and will not be back in the new year. If no deal is reached, the presidential victor will have to renew negotiations immediately after his inauguration in January in an effort to reverse the potentially catastrophic effects.

The outcome for higher education in whatever "grand bargain" Congress may reach is anyone's guess, according to Edwin Eisendrath, managing director at Huron Consulting Group, a management consultancy firm.

"So much is at stake in that package that it is difficult to separate out the portion relevant to higher education," he said.

Another item on the table will be the national research budget, which is largely channelled through the National Institutes of Health and the National Science Foundation.

Although both candidates have pledged to continue federal support for basic science and research, acknowledging its importance for the US' economic future, neither has laid out any firm funding plans for the next four years.

Responding to questions posed by the non-profit campaign group Science Debate, Mr Obama reiterated his pledge to double the budgets of key research agencies - a promise he has struggled to keep throughout his term.

Since 2008-09 the budget for the NIH has risen by about $1.2 billion to $31 billion, while NSF funding grew from $6.1 billion to $7 billion. These represent important increases in a time of austerity but much slower progress than many had hoped before the economic crisis.

Responding to the same questions, Mr Romney called for a move away from what he called the president's "misguided attempts" to pick winners, referring to the targeted spending of $100 billion in stimulus funding on innovation, of which a large portion went on clean energy projects.

He has instead pledged to commit to research with priorities that are not hijacked by "short-term political imperatives".

Mr Romney's answers to Science Debate's questions - a high-profile exercise that addressed not just policy but also issues from pandemics to oceans - showed an attempt by the Republican candidate to portray himself as a man in tune with the big science issues of the day, offering lengthy and in-depth responses.

But some answers - such as his sidestepping on the issue of climate change - are likely to have reinforced a perceived difference between the candidates: that his Democrat opponent is a friend of science and academia, notable for his appointment of experts to senior government positions, while Mr Romney has to contend with a Republican Party that includes members fundamentally opposed to the broad scientific consensus on issues such as climate change and research involving embryonic stem cells.

"Historically college and university officials have tended to favour the Democratic candidate, and I don't see anything in this election likely to change the pattern we've seen," Dr Hartle said.

Whoever wins, the priority will be working with the opposition to break the impasse and move forward in crucial areas of public policy, he added.

"The big question for both President Obama and Governor Romney is that, assuming we're going to have a Congress in the next session that looks like the one we just had, what are you going to do to pick up the ball on some of these important issues and play it down the field?"

elizabeth.gibney@tsleducation.com.