Northwest Education Law Blog : Northwest Education Lawyer & Attorney : Williams Kastner Law Firm : Tacoma, Seattle, Portland

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More than 220 colleges have long-term student loan default rates so high that they would lose all federal student financial assistance under the terms of a new law that eventually will measure those rates over a three-year time scale, according to new Education Department figures.

Student-loan defaults are more common at for-profit colleges and other institutions that serve lower-income populations, and the move toward a stiffer default-rate measure has left many of those institutions warning of a growing harm to the students most in need.  "The only thing that explains default rate is the socioeconomic background" of the student, said Harris N. Miller, president of the Career College Association, which represents for-profit institutions. "By using that as the metric of quality, you will always be discriminating against low-income students."

Most students are required to begin paying back federally subsidized loans six months after they graduate or otherwise leave school. A college can lose eligibility for both grants and loans if its default rate exceeds 40 percent among its former students in the first year after they're due to begin repayment. Colleges also can lose eligibility if the rate of borrowers defaulting within two years of their scheduled start of repayment is 25 percent or greater for three consecutive years.

A new law, the Higher Education Opportunity Act (HR 4137), approved last year by Congress, will change that last measure, effective in 2012, to begin counting borrowers who default within three years of their scheduled repayment. Using that three-year window, colleges would be ineligible if their borrower default rate is 30 percent or greater for three consecutive years. [Chronicle of Higher Education]

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Any thoughts that the U.S. Department of Education planned only to tweak existing regulations that affect for-profit colleges and other higher-education sectors were dashed on Monday when the agency released a draft of proposed revisions to a panel of negotiators. Many people in higher education, especially those in the for-profit sector, were taken aback at the substantial changes proposed, with some calling the move "aggressive" and "surprisingly strong."

The panel, whose members include federal officials and representatives of institutions and associations affected by the regulations, has been charged with re-examining 14 rules in a process known as negotiated rule-making. Among the department's proposed changes are eliminating the 12 "safe harbors" adopted in 2002 to clarify a ban on incentive compensation for student recruiters. The safe harbors specify types of compensation plans that do not violate the ban.

Other proposed changes deal with assuring the integrity of "ability to benefit" testing procedures, defining a high-school diploma, and determining how institutions ensure gainful employment for their students.

Another area of concern was the department's consideration of changes in a rule that requires for-profit institutions to show that a percentage of their graduates find "gainful employment." The department decided not to provide draft regulatory language on gainful employment at this time. However, department officials are considering two options for determining whether institutions are complying with that rule. One would require a college to show a "reasonable relationship" between the price a student is charged for a specific program and the "value added," which the department suggests could be defined as the difference between the salaries in that field earned by the average graduate of the program and the average high-school graduate. Another option would be to look at whether a student's starting annual income was adequate to cover student-loan obligations for the program "while still having an adequate amount available to meet living expenses."

In another area, the department's suggestion that institutions be required to keep listings of high schools in three categories related to the established validity of their diplomas also did not go over well. Harris N. Miller, president and chief executive of the Career College Association, which represents about 1,400 institutions, most of them operated for profit, said the onus should be on the federal government, not the institutions. The government, he said, is the one entity that can keep a list of legitimate schools.

The department also proposed new measures regarding the administration of "ability to benefit" tests. Students who do not have a high-school diploma or a GED, and have not completed high school through home schooling, have to pass an ability-to-benefit test to qualify for federal student aid.

The department has proposed requiring publishers of ability-to-benefit tests to establish a process to identify and follow up on test-score irregularities. A test publisher would be required to decertify test administrators if it determined that test had been administered improperly. Last summer the Government Accountability Office said in a report that officials administering such a test at one college had given out answers and changed answers for students. [The Chronicle of Higher Education]

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Students aren't the only ones benefiting from the billions of new dollars Washington is spending on college aid for the poor.

An Associated Press analysis shows surging proportions of both low-income students and the recently boosted government money that follows them are ending up at for-profit schools, from local career colleges to giant publicly traded chains such as the University of Phoenix, Kaplan and Devry.

Last year, the five institutions that received the most federal Pell Grant dollars were all for-profit colleges, collecting over $1 billion among them. That was two and a half times what those schools hauled in just two years prior, the AP found, analyzing Department of Education data on disbursements from the Pell program, Washington's main form of college aid to the poor.

This year, the trend is accelerating: In the first quarter after the maximum Pell Grant was increased last July 1, Washington paid out 45 percent more through the program than during the same period a year ago, the AP found. But the amount of dollars heading to for-profit, or "proprietary," schools is up even more — about 67 percent.

Regardless of how AP's findings are interpreted, they underscore the extent to which the United States has ramped up its support for low-income college students in recent years, but increasingly outsourced the job to the private sector. [Associated Press]

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WASHINGTON -- Just as new scrutiny surfaces on the University of Phoenix’s alleged use of illegal recruiting practices, a Department of Education-appointed panel debated possible changes in federal rules governing recruiter compensation for bringing students to their institutions.

In discussions Tuesday afternoon and Wednesday morning, the team of negotiators charged with considering the revision of regulations meant to protect federal financial aid programs from potential abuses by colleges, universities and others turned to the rules guiding incentive compensation for recruiters, financial aid officers and others who may get paid based on how many students apply to or enroll at their institution.

The department chose to reopen the issue in this current round of "negotiated rule making," in an attempt to see whether some or all of the safe harbors needed to be revised or eliminated, or if others ought to be added.

Though complaints about aggressive recruiting tactics have come from all kinds of institutions, there was an inferred emphasis on for-profits like Phoenix (which, for its part, refutes the allegations made by ProPublica and NPR's "Marketplace" in the news story mentioned above). Hawkins said NACAC has catalogued violations “taking place primarily in the for-profit sector but also in nonprofits.” His group’s policies regard admission officers “as professionals, rather than salespersons” and support a full ban on incentive compensation.

Margaret Reiter, a former California deputy attorney general on the panel representing consumer advocacy organizations, voiced specific concerns about the language in almost all of the safe harbors. [Inside Higher Ed]

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Demand for personal financial advisors is projected to grow a whopping 41 percent between 2006 and 2016. Which other careers on Money and PayScale.com's list of America's best jobs will see big opportunities?

1. Telecommunications Network Engineer
2. Systems Engineer
3. Personal Finance Advisor
4. Veterinarian
5. Senior Financial Analyst
6. Business Analyst, IT
7. Software Development Director
[CNNMoney]
 

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Exhorted by consumer groups, the Obama administration and its Democratic allies in Congress are moving to create a federal Consumer Financial Protection Agency, which is designed to regulate credit card fees and other forms of consumer credit that get comparatively little oversight from existing federal agencies. Advocates for students have argued that the new agency could fill what they say are significant gaps in the government's ability to regulate non-federal student loans, which grew steadily in popularity as college tuitions rose throughout this decade. But as the House of Representatives drafts its version of legislation to create the new agency, a broad coalition of groups are concerned that lawmakers may ignore a burgeoning form of alternative loans: those that for-profit colleges make directly to students to fill gaps in their ability to pay.

They are urging Congressional Democrats to clarify that a planned exemption in the bill designed to shield local merchants from excessive regulation would not apply to publicly traded higher education companies that are directly giving students tens of millions of dollars in small loans, often structured as consumer financing rather than student loans, and sometimes at double digit interest rates.

"To effectively protect consumers, the CFPA must have full authority to regulate private student loans regardless of the institution offering them," the groups wrote in a letter this month to Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee. "For consumers, a private student loan can pose the same serious risks whether issued by a financial institution or by a school. The CFPA should apply and enforce standards based upon the product and not the issuing institution."

For-profit college officials say the groups misrepresent the nature of the loans, which they say are designed to fill the gap (often as little as $1,000) between the federal aid the students qualify for and the cost of their educations, funds that have been harder for students to come by since the tightened credit markets crimped the availability of other private student loans. They also point out that relatively few colleges provide such financing, and argue that private student loans -- including those issued by institutions -- are already regulated, thanks to changes made in last year's renewal of the Higher Education Act. [Inside Higher Ed]
 

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A group of distance education leaders today plans to discuss how current state-by-state approval and licensing protocols are hampering online colleges, and how those policies might evolve to accommodate colleges that educate students in many different states via the Web. “American labor’s competitive edge requires work force education that avoids entanglement of online and distance educational providers in a duplicative web of processes in order to offer their services,” says a report from a task force assigned by the forum to study the issue.

That report is expected to be the focus of today’s meeting here. Its authors argue that the state-based approval system is centered around the notion that colleges are fixed in a single location that necessarily falls within the borders of a state. Since online colleges aim to teach students in multiple states, they have to go through multiple accreditation processes to achieve a nationwide presence, then satisfy various bureaucratic requirements in each state if they want to keep teaching students there.

This, says John F. Ebersole, president of Excelsior College (which founded the Presidents’ Forum), can be “sort of a pain in the butt"; more to the point, it forces online institutions to devote a lot of time and resources to acquiring and maintaining licensure in different states. This, the task force argues, “increasingly may act to inhibit student access to essential learning opportunities and at an unnecessarily high cost.”

To remove these anchors from the necks of online colleges seeking a presence in each state, the task force proposes that regional accrediting organizations and their member states reach a common ground on “a specific template of state standards to which all parties would reference their individual requirements.” Under such a system, online colleges would only have to seek the approval of a single accrediting organization and a single state, just like brick-and-mortar colleges -- except they would get to enroll students from all over the country. The system would be based on “reciprocal judgment"; that is, state governments and regional accreditors would have to trust each other that their accredited institutions were on the level.

Solving the discontinuity between state licensing agencies could be the key to getting regional accreditors to trust one another’s judgment, according to Alan Contreras, administrator of the Oregon Office of Degree Authorization. If professional licensing agencies in different states can align their standards, curricula designed to prepare students to meet those standards will necessarily become more similar, Contreras wrote in an outline for a talk he is planning to give today at the Presidents' Forum meeting. [Inside Higher Ed]
 

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Gov. Arnold Schwarzenegger has signed into law a bill that reinstates California's Bureau for Private Postsecondary Education, which regulates for-profit colleges. The state has depended on a temporary regulatory process since 2007, when the bureau expired after lawmakers failed to agree on how to reorganize it. Under the new law, the bureau will take responsibility for reviewing the institutions' financial affairs, faculty qualifications, and facilities before granting them approval. [The Chronicle of Higher Education]
 

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A federal watchdog agency has called on the Education Department to crack down on for-profit colleges and test administrators after an investigation showed high default rates on student loans and cheating on some exams. The problem lies with an Education Department that has "significant vulnerabilities" in its oversight, the Government Accountability Office told Congress in a recent report.

The GAO called on the department to take several steps, including monitoring for-profit schools and testing programs more closely and ensuring that students don’t get high school diplomas from diploma mills — another problem that was identified. Students can qualify for federal student loans and other aid if they have diplomas or pass these tests. If they default on the loans, federal taxpayers must pick up the cost.

In response, Education Department officials said they expect to implement new rules."We kind of knew we had this issue, and we began to tighten up on our monitoring and test-publishing before the GAO report," said Jeff Baker with the department’s office of federal student aid.

The Career College Association in Washington, D.C., a national group that represents career and for-profit schools, said in a statement that "we share the government’s interest in eliminating any form of fraud and abuse associated with" the federal financial aid program. But the report should be taken in context, the association said. "Nothing in the GAO report suggests that the practice of admitting unqualified students is widespread or indicative of the sector as a whole," the statement said.

Recommendations The federal Government Accountability Office recommended that the Education Department:

-Strengthen its monitoring of for-profit schools and the ability-to-benefit test program. Officials should look at data where test administrators improperly oversaw tests and use that data to identify potential future abuses.

-Require test publishers to conduct an analysis about every 18 months of ATB tests in addition to the current three-year analysis to help better identify irregularities.

-Have an action plan to prevent test administrators who allow cheating from getting additional work from the exam’s publishers.

-Have easily accessible information available — for example on a Web site — that lists state-approved high schools. Officials can then more easily identify diploma mills. [Star-Telegram]

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The Apollo Group, parent company of the University of Phoenix, announced today that it was holding settlement discussions with the parties that have accused it of falsely obtaining billions of dollars in federal student aid while violating rules over how student recruiters are paid. The case, which has been working its way through the courts for several years, is slated for trial in March, but the parties have now agreed to stay all proceedings in the litigation for 45 days. [The Chronicle of Higher Education]
 

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In response to Monday's Government Accountability Office report on loan defaults and basic skills tests at for-profit colleges and universities, the chairman of the House education committee, Rep. George Miller of California, has called for hearings on whether such institutions are "gaming the system," Bloomberg News reports. Some higher-education experts, however, noted that the report contains some positive findings about for-profit colleges, including that some of them have among the lowest loan-default rates of all colleges in the country. [The Chronicle of Higher Education]

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WASHINGTON -- For weeks, spilling into months, those who watch the for-profit sector of higher education most closely (especially Wall Street analysts and some of the colleges' critics) have been speculating about what the U.S. Government Accountability Office was cooking up in a report on the institutions.

Now we know, in the form of some critical findings and a suggestion that the Education Department crank up its scrutiny of the career-related colleges. But Wall Street shrugged off the findings, with stocks for the major publicly traded higher education companies all rising Monday in the wake of what one analyst called the "most positive report we've seen from any government entity" about for-profit colleges.

The most damning aspect of the report -- one of the two that Congress's investigative arm released Monday, with the other on minority-serving colleges -- was the GAO's revelation that officials at a Washington-area branch of one publicly traded for-profit college appears to have violated federal rules when they gave answers to, and "tampered" with answers given by, GAO analysts who posed as prospective students on academic tests designed to measure their "ability to benefit" from a higher education.

The Career College Association, which represents most of the nation's 1,200 for-profit colleges, expressed dismay about the allegations of wrongdoing but noted that the GAO report suggests that they are unrepresentative. "We abhor any practice that breaks the rules or the law to admit unqualified students, whether through fraudulent testing practices or bogus high school degrees. We share the government’s interest in eliminating any form of fraud and abuse associated with the Title IV program," the association said in a prepared statement. "The GAO report describes the actions of a few school personnel and testing personnel behaving in an unethical manner. Nothing in the GAO report suggests that the practice of admitting unqualified students is widespread or indicative of the sector as a whole." [Inside Higher Ed]
 

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Paralegalschoolsonline.org posted "50 Fascinating Law Lectures for Professionals and Laymen" which is a compilation of a series of free webcasts, podcasts, and lectures covering a wide range of legal issues. The website describes the collection: "With laws constantly changing, lawyer fees increasing, and interest in law building, the internet has become a virtual library of legal resources. Below are the 50 best law lectures for anyone with a passing or professional interest."

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Although about a third of the students who earned bachelor’s degrees in 2007-8 graduated with no debt, nearly the same as four years earlier, the average amount students borrow has increased, according to a policy brief released Tuesday by the College Board.

For bachelor’s degree recipients who did borrow, the median loan debt was $19,999, up 5 percent from $18,973 four years earlier, adjusted for inflation. The data, the latest available, come from the federal Department of Education’s National Postsecondary Student Aid Study, which is conducted every four years.

About 6 percent of those who completed a degree or certificate — and 10 percent of those who received a bachelor’s degree — borrowed more than $40,000, the brief said.

But the brief does not include parents’ borrowing, credit-card debt, informal loans from relatives or friends, or loans for graduate school.

Over all, the median student loan debt of borrowers in 2007-8 was $15,123, up 11 percent from $13,663 in 2003-4. But debt levels rose far more sharply for students at for-profit colleges, and those earning certificates and two-year degrees.

For example, students who received certificates in a for-profit program carried a median debt load of $9,744 in 2007-8, a 30 percent increase from 2003-4. And bachelor’s degree recipients in for-profit institutions had a median debt load of $32,653, up 23 percent four years earlier.

For-profit colleges acquire much of their revenue from federal aid. The authors of the brief say for-profit colleges had about 7 percent of the nation’s undergraduates in 2006, but received about 19 percent of the federal Pell grants. [The New York Times]

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BANGALORE (Reuters) - President Barack Obama's $12 billion community college initiative could have an impact on the fortunes of for-profit education companies that offer associate degrees, but analysts say funding for the program is not big enough to make much difference.

Obama's 10-year program, unveiled last week, focuses on associate and vocational degree programs at government-funded community colleges and is aimed at getting people back to school and have them ready for "21st century jobs." Analysts said the program for community colleges could make them more competitive against firms such as Apollo Group Inc, Corinthian Colleges, ITT Educational Services Inc and Lincoln Educational Services Corp. However, they said the amount of money earmarked for the program would result in only a marginal increment in budgets for community colleges and have a small impact on these companies in the short term.

Analysts say community colleges lack facilities and flexibility that companies like Apollo offer. "One of the reasons Apollo was successful with its two-year programs was they make it so easy for someone to continue to work full time and enroll in school," Urdan said. "Community colleges are not good at that. They have a more rigid schedule." "We think for-profits will continue to outshine community colleges on student support services, flexible schedules, and lower teacher to student ratios," J.P. Morgan Securities' Andrew Steinerman wrote in a note dated July 14. [Reuters]

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Every kid knows you can only suck so much liquid through a straw. That simple lesson seems to be lost on adults, particularly when it comes to trying to do more with the same infrastructure. Higher education is a case in point.

President Obama is challenging the nation to regain its global leadership in the percentage of adults with college degrees. The plan he unveiled this week to invest in community colleges is a reminder that human capital is the iron ore of the knowledge age.

Yet, today, only one of every two working adults in America has a college credential, and as Baby Boomers retire, this situation will get worse because Boomers have a higher percentage of college degrees than their children.

Impediments in the existing higher education system exacerbate attempts to improve the situation, including:

-- A high school system in which only three of every four students graduate
with their class;

-- A university system where only about three of every five students
graduate with an associate's degree in three years or a
bachelor's degree six years;

-- A volatile funding environment in which most states have either proposed
or enacted major cuts to higher education subsidies in response to their
current revenue shortfalls;

-- An academic environment in which 40 percent of students seek transfers
from one school to another, but where many transfer of credit requests
are unfairly rejected;

-- A skills gap where high-demand career fields like nursing have waiting
lists of months, even years to enter the educational programs.

The United States leads the world in higher education spending per student and higher education resources as a percentage of GDP. Disappointingly, though, we rank eleventh in terms of degree attainment rates by those 25-34 years of age, a key measure of the return on this investment.

The bottom line? Higher education must reach more Americans with varying educational needs and aspirations. To be relevant to many of those who are currently not being served will require greater emphasis on subject matter immersion, more hands on application, more course scheduling flexibility, and more concentrated delivery than is often found in college programs. For many students it also means a clear path to employment. And for colleges and for our students a significant improvement in rates of program and degree completion will be required.

Yet expanding college access and educational attainment is not about improving our national rankings or winning some academic steeplechase with other countries.

"Countries that out-teach us today will out-compete us tomorrow," the President told a joint session of Congress. We won't get new results trying to drink from the same old straws. When it comes to higher education, it's time to emphasize innovation in all sectors and to supplement traditional approaches with real, workable alternatives. [Career College Association]

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LENEXA, Kan. – (July 9, 2009) – Beauty Schools Marketing Group (BSMG) has announced the debut of “The Beauty School Lounge”, a first-of-its-kind social network for students, educators and professionals in the beauty and cosmetology field. The lounge is an interactive boutique where beauty enthusiasts around the globe can network, access helpful tools, and follow the hottest styles and discussion topics in the beauty industry as they evolve.

Linked with www.BeautySchoolDirectory.com, the social network offers users access to hundreds of beauty schools located across the entire nation. Members of the site already include beauty students, educators, professionals and influential beauty bloggers. Recent conversations and tutorial topics have ranged from proper nail care, new salons that are going green, and three ways stylists and beauty salons can support soldiers and their families. [Career College Central]

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On Monday, a procession of career college lobbyists urged the U.S. Department of Education officials to give their schools more discretion to limit the amount of federal loans students can take out to cover their living expenses. The industry representatives made their remarks at a public hearing the Education Department held at the Community College of Philadelphia to gather ideas for strengthening federal student aid rules to improve the integrity of the programs.

"Schools are trying to limit borrowing," said Richard Dumaresq of the Pennsylvania Association of Private School Administrators, which advocates for proprietary institutions in the state. "But it's not enough to stem the tide of over borrowing, especially in a down economy." His comments were echoed by Harris Miller, the president of the Career College Association, and lobbyists for some of the largest publically traded chains of for-profit colleges, such as ITT Educational Services Inc. [The New America Foundation]

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Jack Welch, the former chief executive of General Electric, is buying a stake in a company that is forming a new online university, and the university is putting his name on its M.B.A. program, The Wall Street Journal reports.

The company, Chancellor University System LLC, is converting the former Myers University, a Cleveland institution that went bankrupt, into Chancellor University, according to the Journal. Mr. Welch is paying more than $2-million for a 12-percent stake in the business, it said, and the university will name its M.B.A. program the Jack Welch Institute.

Mr. Welch does not plan to teach any courses at the institute that will bear his name, but he and his wife, Suzy, are involved in recruiting faculty members and planning the curriculum. [The Chronicle of Higher Education]

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If you’re thinking of heading off to a community college next year to either pick up an associate’s degree or save some money on your core credits for a bachelor’s degree, expect company. Similarly, if you’re planning to attend a for-profit career college to up your chances of landing a decent job, you are definitely not alone. During recessions, people typically flock to college, often choosing cheaper or quicker degree programs to help them get on their feet and be more competitive on the workforce. Enrollment is up at career colleges and community colleges are expecting a similar increase.

One group of students may actually see less competition, though. The number of students taking the Graduate Record Exam (GRE) this year is down, suggesting that fewer students may be planning to apply for graduate programs. [Career College Central]

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ORLANDO -- The increasing push by federal and state governments alike to tie financial support for colleges to their success in retaining and graduating students concerns officials at institutions with large numbers of students who are from low-income backgrounds or are the first in their families to go to college. It's not that they mind being held accountable, say officials at open-access four-year public universities, community colleges, and for-profit institutions; they just don't want to be punished for admitting and trying to educate those who have historically had the least access to higher education and who enter college with the most risk factors that tend to drag students down.

A study previewed this week at the annual meeting of the Career College Association here seeks to make the case that any assessment of colleges' success in getting students to the finish line must take into account the students' attributes when they start. And perhaps unsurprisingly, the study, which was financed by the Imagine America Foundation, which works on behalf of for-profit colleges, also asserts that commercial career colleges have more success graduating high-risk students than do other types of institutions. [Inside Higher Ed]
 

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U.S. News & World Report is on the verge of officially announcing a major expansion of its rankings Web site. The announcement will focus on the new "University Directory" that has been in beta. The directory has a broader focus than the rankings -- with extensive listings in distance education and adult continuing education, not just the four-year residential colleges that are the focus of the rankings.

Brian Kelly, editor of U.S. News, stressed that the expansion of the magazine's education Web site was related to serving students. "The idea is to go beyond the four-year brick-and-mortar college," he said. Many adult students are enrolling online, and the approach the magazine takes to its rankings isn't meeting their needs. U.S. News, he said, recognizes that for many potential students, the colleges that top the rankings aren't the places they are considering and the new directory will help them. (Along the same lines, but still in development, U.S. News is exploring the idea of a community college directory and rankings, but the rankings are unlikely to be similar to those of four-year institutions, he said.)

At least initially, there are no plans to rank the adult and distance programs. "We just don't think the data are available," Kelly said. [Inside Higher Ed]

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Washington — Community colleges and the job-training programs they provide are already among the big winners under President Obama’s higher-education and economic-recovery policies. Now word comes from the White House that they may benefit again, reports The Swamp, a blog operated by the Washington bureau of the Chicago Tribune.

Rahm Emanuel, the president’s chief of staff, told the Democratic Leadership Council today that Mr. Obama would soon announce plans for a sizable increase in federal support for job-training programs at community colleges. “In the next couple of weeks, you will see a major announcement by the president on community colleges and job training,” Mr. Emanuel was quoted as saying. [The Chronicle of Higher Education]
 

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Washington — The bill to finance continuing U.S. military operations in Iraq and Afghanistan includes a provision that would extend educational benefits for children of members of the military who die while on active duty.

The educational provision would guarantee a full scholarship at an in-state public college for all children of soldiers killed on duty, according to a news release issued by Rep. Chet Edwards, a Democrat of Texas, who wrote the provision. Those who qualify could also apply the cost of a scholarship at their most expensive in-state public college toward the cost of attending an out-of-state or private college.

Under the current GI bill, service members can transfer their education benefits to only one dependent. The new bill would extend the benefit to all children of soldiers killed on duty. [The Chronicle of Higher Education]

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A judge has thrown out a lawsuit filed by a former Regent University law student who was suspended after posting a picture on the Internet of school founder Pat Robertson making what appeared to be an obscene gesture.

U.S. District Judge Jerome B. Friedman of Norfolk rejected Adam Key’s claims that Regent and Robertson, the school’s chancellor and president, violated his free speech and due process rights.

Key, a Houston native, was suspended from Regent for one year in 2007 for violating the school’s code of conduct after posting the picture. The picture was a frame of a YouTube video in which Robertson was scratching his face.

Although Regent is a private university, Key said the school received some state and federal funds and therefore was subject to the free-speech and due process standards that apply to the government. Friedman disagreed, writing in his June 5 ruling that a school’s receipt of public funds alone does not make its decisions acts of the state.

Along with the constitutional claims, Key alleged that Robertson defamed him by saying Key had manipulated the photo, and that the school broke its contract with him by not living up to promises made in recruiting materials.

The judge rejected those arguments as well. He said that by presenting a single frame of a video out of context, Key did manipulate the image — and since Robertson’s statement was true, it could not be defamatory.

Friedman also said the “generic recruiting correspondence” received by Key did not amount to a binding contract. [Richmond Times-Dispatch]

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Washington — Rep. Howard P. (Buck) McKeon of California will give up his post as the top Republican on the House education committee to become the senior Republican on the Armed Services Committee, Congress Daily reports.

His departure will create a vacancy at the top of the education committee at a time when the panel is considering legislation to overhaul the federal student-loan programs and make Pell Grants an entitlement.

While a successor for the education post has not been picked, the next in line for the job, in terms of seniority, is Rep. Thomas E. Petri of Wisconsin, an avid supporter of direct lending. Mr. Petri has been a member of the committee since 1979 and helped create the direct-loan program in the 1990s.

If Mr. Petri replaces Mr. McKeon, the committee’s Democrats could face less opposition from Republicans to President Obama’s proposal to eliminate the guaranteed-student-loan program. Congress has until mid-October to decide whether to abolish the bank-based program or make less drastic changes in student lending. [The Chronicle of Higher Education]

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Nearly two years after being indicted, a former admissions director at Touro College, in New York, was found guilty on Tuesday of forging student transcripts and granting undeserved degrees in exchange for cash, the New York Daily News reports.

Andrique Baron, 36, sold degrees, including master’s degrees to three city teachers, for up to $25,000 each and deleted the names of actual students from college records in order to create transcripts for buyers.

A jury in Manhattan convicted Mr. Baron on 36 counts, and he now faces a sentence of up to 16 years in prison. He rejected a deal last year that would have resulted in only five years of jail time.

Mr. Baron was one of 10 people caught in a cash-for-grades scandal at the college in July 2007. They were charged with crimes of computer trespass, computer tampering, and falsifying business records. [The Chronicle of Higher Education]

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College officials need to begin planning now to comply with a new federal requirement that they post on their Web sites within roughly two years the net price to attend their institutions, panelists said at a meeting of institutional researchers here this week. 'This is going to end up being more complex as you get into it than people realize,' Mary M. Sapp, assistant vice president for planning and institutional research at the University of Miami, told members of the Association for Institutional Research. Congress mandated the new feature last year to give prospective students a clear idea of the actual cost to attend each institution. The net figure will be derived from total cost - tuition, fees, room, board, and other expenses - minus average aid from all sources of grants (but not loans). [The Chronicle of Higher Education]

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Most of us have had the experience of receiving e-mail with an attachment, trying to open the attachment, and finding a corrupted file that won't open. That concept is at the root of a new Web site advertising itself (perhaps serious only in part) as the new way for students to get extra time to finish their assignments.

Corrupted-Files.com offers a service -- recently noted by several academic bloggers who have expressed concern -- that sells students (for only $3.95, soon to go up to $5.95) intentionally corrupted files. Why buy a corrupted file? Here's what the site says: "Step 1: After purchasing a file, rename the file e.g. Mike_Final-Paper. Step 2: E-mail the file to your professor along with your 'here's my assignment' e-mail. Step 3: It will take your professor several hours if not days to notice your file is 'unfortunately' corrupted. Use the time this website just bought you wisely and finish that paper!!!"

The site promises that students can stop using "lame excuses" like the deaths of grandmothers or turning in poor work.

While the Web site attempts to distinguish its service from cheating, it also advises students on how its services could make it easier for them to get away with turning in a file they know won't open. "This download includes a 2, 5, 10, 20, 30 and 40 page corrupted Word file. Use the appropriate file size to match each assignment. Who's to say your 10 page paper didn't get corrupted? Exactly! No one can! Its the perfect excuse to buy yourself extra time and not hand in a garbage paper. Cheating is not the answer to procrastination! - Corrupted-Files.com is!" [Inside Higher Ed]

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Distance educators won’t have to become FBI-style investigators, scanning fingerprints and installing cameras in the apartments of online students to ensure that people are who they say they are.

At least not yet.

The recently reauthorized Higher Education Act required accreditors to monitor the steps that colleges take to verify that an enrolled student is the same person who does the work. The language in the law had left distance educators worried they would have to buy expensive technology to ensure that students didn’t have other people take their tests. The distance educators feared the cost could be so high that programs would be in danger.

But proposed federal regulations about implementing the law, worked out this May, would allow colleges to satisfy the mandate with techniques like secure log-ins and passwords or proctored examinations, according to people involved in the negotiations.

Still, while colleges may have dodged an immediate bullet, what had been more of a “back burner” issue will now be “front and center,” Mr. Lokken said. In the future, as identity-verification technology evolves, the expectation is that accrediting agencies will require more than simple log-ins and pass codes. [The Chronicle of Higher Education]

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Washington — President Obama told a joint session of Congress in February that the United States should have the world’s highest proportion of college graduates by 2020. An author of a new report on how the nation fares in higher education compared with other developed nations says that the United States is not really that far back because of how other nations measure degree attainment.

However, there are still some challenges to meeting the president’s goal, said Arthur M. Hauptman, an independent higher-education consultant and one of the new report’s authors. The nation spends the most in the world per-student on higher education, with the lion’s share flowing to four-year institutions. Instead, more money should be focused on helping students complete community college, Mr. Hauptman said.

While the United States is second only to Norway in the percentage of its working-age population with a bachelor’s degree, it is ninth among countries in the proportion of two-year degrees that its residents hold. In addition, the report recommends, the money should be given to institutions based on their degree completions, not their enrollment. [The Chronicle of Higher Education]

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Seniors at for-profit colleges are more than twice as likely to have accumulated dangerous amounts of education loans as seniors at other kinds of four-year colleges, according to a new report.

Almost 30 percent of seniors at for-profit universities in 2008 owed at least $40,000 in college loans, an amount that could be excessive, according to a new analysis of the latest federal data by Mark Kantrowitz, publisher of Finaid.org and Fastweb.com. For comparison, only about 11 percent of seniors at private nonprofit colleges—many of which charge higher sticker prices than typical for-profits—graduate with excessive debt, Kantrowitz found. And excessive debt was a problem for only about 6 percent of seniors at public universities, which are typically comparatively lower priced. That means new graduates of for-profit schools are about five times as likely to have borrowed heavily as new graduates of public universities.

Robert Cohen, a spokesman for the Career College Association, which represents many for-profit colleges such as DeVry University, ITT Technical Institute, and Kaplan University, said there are several reasons why their students tend to borrow more. Their students tend to be older and thus don't have parents willing to contribute to tuition. And for-profit schools generally serve lower-income students, who are more reliant on federal grants, most of which haven't been keeping pace with inflation. But, Cohen added, "the vast majority of career college students are able to manage their loans and to pursue better, more professionally rewarding careers." [U.S. News & World Reports]

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Washington -- It’s the end of free pizza as we know it, and consumer advocates feel fine.

The U.S. House passed a bill Wednesday that will place limits on credit card companies' marketing to students, preventing them from handing out free food and T-shirts on college campuses, and requiring many students to have a co-signer before they receive a card.

The Credit Card Act of 2009, which passed the Senate Tuesday and is now headed to President Obama, who is expected to sign it, was heralded by those who say students have been exploited by credit card companies. But some fear that students, in having their access to credit cards limited, will be denied a chance to build up credit in college and barred from accessing a viable -- albeit vexed -- tool for financing their educations.

Colleges and universities have taken their own share of criticism for getting overly cozy with credit card companies, offering the industry entrée to students and alumni in exchange for sometimes lucrative deals. Michigan State University, for instance, had an $8.4 million contract with Bank of America, granting it access to students’ names and addresses and allowing use of the university’s logo, The New York Times reported last December.

The federal legislation passed this week won’t end colleges’ relationships with credit card companies, but it will make the agreements more transparent. Creditors will be required, for instance, to issue annual reports regarding their business relationships with colleges, alumni organizations or affiliated foundations. [Inside Higher Ed]

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Washington — Colleges often complain that they are overburdened with well-meaning but costly and duplicative federal regulations. Now they have a chance to do something about it.

The Higher Education Act that Congress reauthorized last year more than doubled colleges’ reporting requirements, but it also required a study of redundant and unnecessary regulations. The law put the Advisory Committee on Student Financial Assistance, an independent panel that advises Congress, in charge of the study.

Now the committee has created a Web site where the public can offer recommendations for streamlining federal student-aid regulations. Priority will be given to comments received before July 15. [The Chronicle of Higher Education]

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(Chronicle of Higher Education) The jokes began orbiting the Internet almost immediately after Blackboard Inc. announced its plan to buy yet another competitor in the course-management software market this month. This time the target was Angel Learning, which had lured away dozens of Blackboard clients in recent years with a friendly, approachable corporate culture that stood in stark contrast to Blackboard’s reputation for pushiness.

One college administrator said the company should now be called “Dark Angel.” Another said a better name would be “Blackborg.”

The Star Trek reference to characters who seek to assimilate everyone into a collective “borg” rang true for several college leaders, who had chosen to work with Angel in part because it was not Blackboard but found themselves right back in the larger company’s gravitational pull.

Outsiders might ask, Why all the fuss?

The answer is that course-management software has become a new kind of campus building—a virtual one where online classes are held and new kinds of “hybrid” courses take place. The unsettled question is who controls what these classrooms look like and how stable their foundations are.

About 7 percent of colleges with campus wide course-management systems use Angel software, according to the 2008 Campus Computing Survey of college information-technology leaders. The survey found that about 57 percent run Blackboard. [The Chronicle of Higher Education]

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[LOS ANGELES TIMES] For two decades, every attempt to overhaul the $85-billion-a-year student loan industry by eliminating subsidies to lenders has faced insurmountable opposition from one of the most powerful institutions in the business: Sallie Mae, the world's largest student loan company.

But in a dramatic reversal, the lending behemoth now supports President Obama's efforts to kill the subsidies it has tried to protect for so long. Instead, the company has offered a proposal that calls for the government to hold on to the loans and pay private companies for originating and servicing them.

The nonpartisan Congressional Budget Office has estimated that Obama's plan to eliminate the subsidies would save as much as $94 billion, which the administration would then direct to Pell Grants for low-income students. Sallie Mae and outside analysts have estimated that the company's plan would save 80% to 90% as much as the president's proposal. [Los Angeles Times]

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The Seattle Times reported today that community colleges across the state are turning away unemployed workers because there's no money left to retrain them.

With Washington's unemployment rate hitting 8.4 percent in February, up from 4.7 percent a year earlier, demand for the popular, state-funded worker-retraining program has skyrocketed to the point where it's gone bust — at least until the next fiscal year, which begins in July.

The program paid up to two years' worth of tuition, transportation and books for people who had lost jobs and were looking to upgrade their skills or find another line of work. . . . [Seattle Times]

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March 23, 2009
By Amy Lavalley, Post-Tribune correspondent
After 31 years as a welder at Union Tank Car in East Chicago, David Alicea lost his job in May when the company shut its doors.

In January, the Valparaiso resident, 51, started at Portage Adult Education to brush up on his skills.

These days, he has his commercial drivers license permit. He hopes to get his full license and begin driving sometime this year.

"That's my plan," he said, adding though he already had his high school diploma, adult education helped him refresh his math and reading skills so he could move on to another career.

Alicea is part of an influx of students seeking to further their education through the adult education program, as more people return to school to retool their skills and find new jobs in today's tough economy.

"We have 21 sites and we have about 2,400 students right now, because our enrollment has been increasing very rapidly," said Frank Vernallis, director of adult education, which has sites in Porter, Lake, LaPorte, Newton, Jasper and Starke counties. "Particularly in the GED program, we are getting a lot of people who have been employed a number of years."

Adult education has gained about 120 students since December, as more people lose their jobs and return to get their diplomas or the equivalency, Vernallis said. The growing number of students further increases the financial burden on the already struggling program, which Vernallis said is seeing new students almost on a daily basis.

Though a full analysis of the new students is not yet available, Rebecca Reiner, director of the Portage Adult Learning Center, the largest site in the system with about 350 students, said the largest increase has been in students between the ages of 35 and 55.

"The biggest increase that I'm seeing is people who have worked since they were 16 years old and because of downsizing, lost their jobs," she said. "They've worked full-time, raised families and are now unemployed for the first time ever, and they're competing with 18-year-olds, 20-year-old, for the same jobs."

Like Alicea, Johanna Castellanos, 61, of Portage, enrolled at the learning center, though with a different goal. Married at 16, she never finished high school. She decided to open a day care center with her daughter-in-law and granddaughter and found out that, for the facility to be state licensed, she would need her GED.

Castellanos took the equivalency test 20 years ago when she was studying to be a beautician, and fell short by 1.5 points toward her GED. Her instructor in cosmetology told her not to bother trying again then, a decision that Castellanos still regrets.

"I should have went right back and taken it," she said.

She expects to complete the GED this spring, something she wouldn't have done without the learning center, or the encouragement of Reiner and others on the staff.

"It's going to help me because my husband is going to retire in March 2010. It's really going to further my career," she said. [Post-Trib]

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According to the Seattle Times, the 2009 American Recovery and Reinvestment Act will offer increased financial aid to low- and middle-income students this year. The changes are temporary, though, and the future is uncertain. The stimulus bill offers the following changes:

• Pell Grants: Funding has increased and eligibility requirements have changed. The maximum allowance for 2009-2010 is $5,350; the maximum allowance for 2010-2011 is $5,550. Eligibility requirements have changed, too, meaning that an additional 800,000 students will be eligible to receive a Pell grant. In 2011-2012, the maximum allowance drops to $5,250, unless new legislation is enacted
• Tax Credits: Under the American Opportunity Tax Credit, the maximum tuition tax credit is raised from $1,800 to $2,500 (100% reimbursement for the first $2,000 spent on higher education and 25 percent of the next $2,000 spent on qualified educational expenses). Income levels will vary the amount of credit that can be claimed.  After 2011, the credit reverts to 2009 levels.
• School-specific Aid: Work-study funding is increased by $200 million, providing approximately 81,000 more students with work-study jobs. Absent new legislation, work-study funding will go back to 2009 levels after the 2010-2011 school year.

[Seattle Times]

See the related stories 10 Tips for Getting the Best College Financial-Aid Package and Economic stimulus offers relief to career college students.

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$49 Billon More to Be Available within 6 months

U.S. Secretary of Education Arne Duncan announced Saturday that $44 billion in stimulus funding from the American Recovery and Reinvestment Act (ARRA) will be available to states in the next 30 to 45 days. The first round of funding will help avert hundreds of thousands of estimated teacher layoffs in schools and school districts while driving crucial education improvements, reforms, and results for students.

"These funds will be distributed as quickly as possible to save and create jobs and improve education, and will be invested as transparently as possible so we can measure the impact in the classroom," said Duncan. "Strict reporting requirements will ensure that Americans know exactly how their money is being spent and how their schools are being improved."

Guidelines posted by Duncan today authorize the release this month of half the Title I, Part A stimulus funds, amounting to $5 billion, and half the funds for the Individuals with Disabilities Education Act (IDEA), $6 billion, without new applications.

By the end of March, governors will be able to apply for 67 percent of the State Fiscal Stabilization Funds (SFSF) and discretionary SFSF, totaling $32.5 billion. These funds will be released within two weeks after approvable applications are received.

In the next 30 days, nearly $700 million more will be available for various programs including vocational rehabilitation state grants and impact aid construction, Duncan said. Another $17.3 billion for Pell Grants and work-study funds is available for disbursement for the next academic year beginning July 1.

An additional $35 billion in Title 1, IDEA, and State Fiscal Stabilization Funds, as well as monies for other programs will be distributed between July 1 and September 30.

ARRA funds must be used to improve student achievement. To receive the first round of state stabilization funds, states must commit to meet ARRA requirements, including making progress on four key education reforms, sharing required baseline data, and meeting record-keeping and transparency requirements. To receive the second round of funding, they must provide evidence and plans for progress on these assurances. All four education reforms were previously authorized under bipartisan education legislation—including the Elementary and Secondary Education Act and the America Competes Act of 2007:

• Raising standards through college- and career-ready standards and high-quality assessments that are valid and reliable for all students, including English language learners and students with disabilities;
• Increasing transparency by establishing better data systems tracking student progress over time;
• Improving teacher effectiveness and ensuring an equitable supply and distribution of qualified teachers;
• Supporting effective intervention strategies for lowest-performing schools.

Finally, a $5 billion fund has been established under the law for the Department of Education. This includes a $4.35 billion "Race to the Top" fund to help states with bold plans to improve student achievement—including these four reforms—and $650 million to assist school districts and non-profit organizations with strong track records of improving student achievement State grants will go out in two rounds over the next year, beginning in October 2009. Applications will be available later in the spring.

"These investments will save and create jobs in the short term, while raising achievement in the long term," Duncan said. “We will need a strong commitment on the front end and even stronger proof on the back end that states are making progress."

Duncan also said that states should work hard to avoid "funding cliffs" by investing ARRA funds in ways that minimize "the tail"—i.e., ongoing costs after the funding expires.

"These are one-time funds, and state and school officials need to find the best way to stretch every dollar and spend the money in ways that protect and support children without carrying continuing costs," Duncan said.

Additional details, including a category-by-category list of all ARRA funds appropriated to the Department of Education, as well as requirements and plans for their distribution are posted at www.ed.gov/recovery.

"Our goals are to save jobs and improve education. Today's guidelines show exactly how we can do both—balancing the need for a speedy release of funds with the need for aggressive and thoughtful school improvements and reform to improve results for our children," Duncan said.

United States Department of Education
 

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On February 27, Idaho Governor Otter received legislation that, if signed into law, “will revise the current criteria and process for school surety bonding and student tuition recovery funding. These changes are necessary to ensure against loss of tuition previously collected, so that appropriate student reimbursement can be made in the event of a school closure or default. The new language will be easier for students and school administrators to understand and for the state staff to manage and implement. No change to the current staffing level or appropriated funding will be required.”

Specifically, the legislation would amend existing law to increase the State Board of Education's discretion in determining annual registration fees and grounds for submitting demand upon Proprietary Schools' sureties. "Postsecondary Educational Institutions" (schools offering course of studies leading to degrees (including degree-granting private career colleges)) and "Proprietary Schools" (schools providing courses of study, but not degrees) annual registration fees will be determined entirely by Board rule, rather than previous criteria which provided that such fees would not exceed $5,000.

The proposed law also adjusts the existing law’s surety bond requirement to provide that the Board may submit a demand upon Proprietary Schools' bonds for any "failure by such proprietary school to satisfy its obligations pursuant to the terms and conditions of any contract for tuition or other instructional fees," eliminating the former limitation that such bonds would only be collected upon for "fraud or misrepresentation."

The legislation brings further changes to the manner in which Proprietary Schools may solicit students. Agents of Proprietary Schools will be required to obtain "certificates of identification" issued by the school the agent works for, rather than the former "permits" issued by Board. Proprietary Schools must annually review agent applications and reissue certificates of identification only where appropriate. If an agent will have unsupervised contact with potential students who are minors, before issuing a certificate of identification the Proprietary School must perform a complete criminal history check on that agent, which will be valid for five years. Proprietary Schools will be required to maintain records of application, issuance, denial , termination, suspension and revocation of agents' certificates of identification for five years. In addition, as a new component of the annual registration process, Proprietary Schools must release to the Board the names and results of criminal history checks for each agent to whom the school has issued a certificate of identification.

For further review of these and other changes introduced by the new legislation, click here.