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

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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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As Democrats in the House of Representatives joined the Obama administration in urging college leaders to prepare for the government's seemingly likely switch to 100 percent direct student lending, Congressional Republicans issued a challenge of their own, introducing legislation (with the support of one key Democrat) that would extend a stopgap 2007 law that sustained the lender-based guaranteed loan program with a massive infusion of federal funds. That legislation, the Ensuring Continued Access to Student Loans Act, made the federal government the backstop for federal student loans issued by banks and other lenders. Education Department officials have cited the June 30 expiration of the law as a major reason why the administration's plan to shift all student lending to the direct loan program must proceed apace, and Reps. George Miller and Ruben Hinojosa sent a letter to college presidents Wednesday urging them to get their campuses ready for the switch, even though the legislation has passed only the House and faces a fight in the Senate. But by proposing an extension of ECASLA, Republicans are essentially giving lawmakers uneasy about pushing ahead with a massive change in federal policy a potential alternative. [Inside Higher Ed]
 

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President Obama and his administration need to get more involved if the United States is to meet his goal of having the world's highest proportion of college graduates by 2020, panelists said at the annual meeting of the Association of Public and Land-Grant Universities here on Monday.

Panelists pointed out that the United States has rallied before and increased college enrollment, especially after World War II, following the Soviet Union's launch of Sputnik, and with the advent of community colleges. So there is history to assume that the president's goal can be reached, they said.

Among the challenges in meeting the president's goal identified by members are the large number of students in the pipeline—mostly minorities who are not prepared for college work—the lack of stronger credit-transfer agreements between two-year and four-year colleges in some states, and the country's current economic difficulties. [The Chronicle of Higher Education]

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Surveys by two regional groups of financial aid directors suggest that, despite assurances from the U.S. Education Department, many college officials are worried about the impact that proposed changes in federal student loan programs will have on their institutions and students. The Western and Southern affiliates of the National Association of Student Financial Aid Administrators both asked their members whose institutions are still in the lender-based Federal Family Education Loan Program about the impact they envision from President Obama's proposal to shift all federal lending to the competing direct loan program, a change that would be carried out by legislation that has passed the House of Representatives and will soon be introduced in the Senate. Two-thirds of aid officers said that they were "very" or "extremely" concerned about the prospect of making such a shift by July 2010, as the legislation currently envisions, and nearly half said they expected a significant or severe impact on their budgets. Education Department officials have repeatedly sought to assure aid administrators that the many institutions that have made the shift have had an easy time of it. [Inside Higher Ed]

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A United States District Court judge argued that accrediting agencies should be “afforded great deference in their interpretation of their substantive rules,” when he recently upheld an agency’s decision to strip a small Presbyterian college of its accreditation as a result of the significant debt the institution has accumulated. St. Andrews Presbyterian College, an institution of about 800 students in rural North Carolina, sued the Southern Association of Colleges and Schools in late 2007, arguing that the accrediting agency “denied it common law due process” and that the agency “failed to follow its own procedures in removing St. Andrews’ accreditation.”

SACS had placed the college on warning and probation prior to its 2007 decision to remove accreditation, advising St. Andrews’ officials that their institution was not in compliance with certain aspects of the agency’s “Principles of Accreditation.” Namely, the accreditor found that the college did not have “a sound financial base and demonstrated financial stability.” Students can receive federal student aid only if they attend colleges that are accredited, and St. Andrews has managed to maintain eligibility only because of its lawsuit.

Throughout the process leading to its loss of accreditation, St. Andrews officials argued that SACS did not provide adequate notice of its compliance requirements, calling them “so vague that they give no notice to the college as to what it must do to bring itself in compliance.” Officials further argued that the institution was not offered any benchmarks to determine compliance, referring to SACS’s standards as a “moving target” determined by the “subjective opinions of varying peer evaluators.”

SACS officials, on the other hand, argued that even though the agency’s requirement that all institutions have a “sound financial base” and a “demonstrated financial stability” are not determined by objective criteria, the agency’s standards are anything but “vague.” They further stated that it would be “unwise to adopt a universal definition for financial stability,” given the “wide variety of institutions” SACS accredits.

United Stated District Court Judge William S. Duffey, Jr., of the Northern District of Georgia, writes in his opinion that accrediting agencies like SACS “are to be afforded great deference” in their rulings and that “these interpretations should be upheld unless ‘clearly erroneous.’ ” He further notes that “the weight of authority” allows SACS to “maintain flexible standards” to evaluate myriad institutions. Dismissing the arguments of St. Andrews, Duffey states that “SACS’ compliance requirements are not impermissibly unspecific” but “provide sufficient notice to member institutions and thus do not violate common law due process standards.”

Elsewhere in his ruling, Duffey backs away from judicial review of SACS’ decisions again by noting that its “interpretation of its requirements for financial stability and a sound financial base is entitled to deference.” He emphasizes a hand-off approach when the court considers accreditation cases. “The court will not act as a ‘super-accreditation’ body to evaluate whether SACS’ accreditation decision was right or wrong, or whether the court would have ultimately reached a different conclusion,” Duffey writes. “The court necessarily concludes the process was fundamentally fair and that the college was allowed to present sufficiently complete information about its financial condition and operations. That St. Andrews disagrees with SACS’ conclusions and determination does not demonstrate that it was denied due process.” [Inside Higher Ed]

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The U.S. Department of Education today awarded $11.3-million in grants to 29 projects in 20 states that will benefit working adults and displaced workers pursuing degrees or credentials at community colleges. The projects encompass a wide range of activities, including remediation, tutoring, counseling, and support services. Some projects will use distance learning to reach out to adult learners. The grants, which range from $200,000 to $500,000, are administered by the Fund for the Improvement of Postsecondary Education. [The Chronicle of Higher Education]

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The Department of Veterans Affairs' problems with the Post-9/11 GI Bill's benefits seem to linger, no matter what the government does.

Tens of thousands of veterans, active-duty service members and their dependents have been waiting for promised higher-education benefits from VA since fall classes began last month. The agency attempted to address the backlog by granting $3,000 in emergency checks, but that has just created a new problem. It turns out that VA was hustling so to get checks in the right hands that officials began distributing benefits checks that had been filled out by hand. Not surprisingly, that sent up alarm bells at banks.

VA contacted banks, university officials and other program participants over the weekend to alert them. Concerned bank employees can call VA at 800-827-2166 to confirm a check's amount and whether it was previously cashed. (Those with the checks might want to write that phone number down, too, just in case there's a question at the bank). The department has distributed roughly $70 million in emergency checks since the payments began Friday, Roberts said. Roughly 30,000 of the 64,000 students enrolled in the Post 9/11 GI Bill are still awaiting payment. VA is authorizing payment for about 3,000 students per day. [The Washington Post]

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As Congress and the White House move to alter bankruptcy code to make it more equitable to consumers, a House subcommittee began a reconsideration Wednesday of how bankruptcy law treats private student loan debt. Rep. Steve Cohen (D-Tenn.), chair of the House Judiciary Subcommittee on Commercial and Administrative Law, held a hearing to initiate legislation reversing a 2005 change in federal bankruptcy law that, he said, gave private student loan lenders a “favorable, unusual” advantage over borrowers, as well as in comparison to the issuers of most other kinds of consumer loans.

Bankruptcy law bars virtually all borrowers from discharging their private student loan debt, even as most other forms of consumer debt -- including auto loans, credit card debt and mortgages -- can be discharged through bankruptcy proceedings. The only exceptions are made in cases of “undue hardship.”

The only chance borrowers have to discharge their private student loans during bankruptcy proceedings comes by being able to demonstrate “undue hardship,” a term that has not been concretely defined by Congress and is up for varied interpretations by bankruptcy judges. Rafael I. Pardo, an associate professor at the Seattle University School of Law who has done extensive studies on student loans and their discharge in bankruptcy, called on Congress “to clarify the undue hardship standard.” [Inside Higher Ed]

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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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That too many young people come out of high school ill-prepared for college or the work force is little disputed. The questions of why that's so and how to fix the situation, however, have too often resulted in finger pointing, with many college faculty members complaining that high schools are asking too little of their students and high school officials saying that colleges send mixed signals about what they want students to be able to do.

Today represents a milestone, though, for a potential breakthrough that could have major implications for higher education. The Council of Chief State School Officers and the National Governors Association have released common standards for core curriculums in mathematics and reading and writing that, because of a confluence of events, could create a set of widely embraced national (but not federal) standards for what high school students need to know to be "college ready" or to have the skills to enter the work force. (Comments are invited through October 21.)

Every state but Texas has signed on to the groups' Common Core Standards Initiative, the federal government has tied participation in the project to qualifying for a huge new pool of federal funds for school districts, and the American Council on Education (in conjunction with scholarly societies) is organizing teams of college faculty members to review the standards.

"This is the first time the K-12 people have stood up and said, 'College readiness is our goal,' " says Kati Haycock, president of Education Trust, which advocates for low-income students. "Higher ed people ought not to underestimate how big a deal this is." [Inside Higher Ed]
 

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The Justice Department is expected Friday to outline a range of concerns it has about a settlement that Google Inc. struck with authors and publishers over the rights to distribute digital copies of certain works, according to people familiar with the matter. The Justice Department will submit those concerns in a filing to the U.S. District Court of the Southern District of New York, which must decide whether to approve agreement, the people said. The filing is likely to discuss the department's concern that parts of the agreement may hurt the interests of other parties, such as Google's potential competitors in the nascent digital-book market, the people said.

Google in October 2008 struck the agreement with authors and publishers to resolve separate lawsuits the groups filed against it for scanning books without seeking permission. The settlement would give Google the rights to distribute digital copies of millions of out-of-print books that it has scanned in exchange for sharing revenue from the services it creates around those books. Many authors, publishers and public-interest groups have endorsed the settlement, saying it will increase access to books and create new business models for authors and publishers. No major U.S. publishers have come out against it, although some publishing associations in Europe have raised concerns.

The settlement has raised objections among others, including Amazon.com Inc. and a number of state attorneys general, who have filed briefs with the court arguing that the deal gives Google an unfair advantage. [The Wall Street Journal]

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WASHINGTON -- The House of Representatives on Thursday approved sweeping legislation to overhaul the student loan programs and redirect tens of billions of dollars to student aid and other education programs, brushing aside Republican opposition and handing President Obama a significant legislative victory. The House's approval of the Student Aid and Fiscal Responsibility Act of 2009, which had been a foregone conclusion for months, shifts the action to the Senate, where the outcome is slightly less predictable.

The student aid bill, a top domestic priority for the Obama administration, would cease all lending from the bank-based Family Federal Education Loan Program and use the savings the government derives from lending more cheaply for a wide array of purposes, only some of which, to the dismay of some college officials, are in higher education. Among other things, the legislation would:

• Provide $40 billion over 10 years to increase the maximum Pell Grant to $5,550 and ensure that it would increase annually by the rise in the Consumer Price Index plus 1 percent.
• Greatly expand and alter the criteria for the Perkins Loan Program.
• Pour $10 billion into community colleges in support of President Obama's American Graduation Initiative, designed to produce 5 million more two-year college graduates by 2020.
• Spend $8 billion over 10 years to strengthen early childhood education.
• Create a College Access and Completion Fund that would give grants to states and institutions with innovative approaches to increasing college going and graduation.
• Provide $4.1 billion to modernize and repair school and college facilities, including those damaged by Hurricanes Katrina and Rita.
• Make the interest rates on federal student loans variable beginning in 2012, when they are set to rise back to 6.8 percent.
• Simplify the federal financial aid form. [Inside Higher Ed]
   

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On its face, it would seem to be a gift to Barack Obama's conservative critics, who have spent the summer painting the new Democratic President as a socialist who is eager to nationalize the entire health-care system. After all, the Administration's proposal to restructure the student-loan industry is, in many respects, much closer to an actual government takeover than its relatively tame market-driven health-reform plan. But as the House holds hearings and looks likely to pass a student-loan bill this week, it's clear that the education overhaul is not going to be the high-pitched battle that opponents and the White House once expected it to be.

His plan is to do away with a system in which the Federal Government subsidizes banks and other private finance companies like Sallie Mae to lend money to students. The Administration essentially wants to cut such companies out of the game and run the system itself. Democrats claim the move will save $87 billion over 10 years, which can be used for a laundry list of education priorities, including increasing the maximum amount of Pell Grants, expanding Perkins Loans and investing in community colleges and other programs.

Still, the bill could have a hard time in the Senate, where the Administration will need to cobble together 60 votes to prevent the threat of a filibuster. And those in the loan industry certainly aren't giving up. "Ultimately, what they are trying to create here is the Post Office of student lending — you've got no choice," says Jack Remondi, vice chairman and CFO of Sallie Mae, the nation's largest lender, referring to Obama's Aug. 11 comments that questioned the efficiency of American letter carriers. "And this is the President's initiative on health care: if you create competition, that should drive down costs and save people money."

The loan industry estimates that up to 35,000 jobs might be lost by the transfer from FFEL to direct-loan. But the Department of Education (which would run the new and expanded program) maintains that because Sallie Mae and several other companies would be kept on as contractors to "service" the loans — performing administrative tasks such as answering student inquiries and collecting payments — the total amount of jobs lost will actually be much less. [Time]

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A controversial bill that would make it easier for employees of private colleges to unionize is most likely dead for the year, the new chairman of the Senate education committee acknowledged on Thursday. Speaking to supporters of the bill, Sen. Tom Harkin, Democrat of Iowa, said the measure remains one of his top priorities but may have to wait for next year, when the seat left open by the death of Sen. Edward M. Kennedy will be filled by special election. [The Chronicle of Higher Education]
 

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Health care is dominating the headlines and consuming most of the oxygen in federal politics these days, and that's likely to remain the case through the fall as President Obama and Congress work to pass legislation to reform the American medical system.

But as lawmakers returned to work this week after their August recess, a flurry of news developments Wednesday served as a reminder that higher education issues remain a top priority for the administration and its Democratic allies on Capitol Hill.

Among the developments:

• The Education Department on Wednesday announced that it would create two committees of college officials, consumer groups and others to propose new federal regulations governing foreign schools and issues related to the "integrity" of the student financial aid programs.
• Sen. Tom Harkin, an Iowa Democrat known for his strong support of the National Institutes of Health, will replace the late Sen. Edward M. Kennedy as chairman of the Senate Committee on Health, Education, Labor and Pensions. The way was cleared for Harkin when Sen. Christopher Dodd (D-Conn.) said he would remain as head of the Senate's banking committee.
• Vice President Joe Biden brought his White House Task Force on the Middle Class (and two Cabinet secretaries) to Syracuse University for a forum on college affordability, in a conversation that featured some tough talk about college tuition and lots of love for community colleges. In conjunction with the meeting, the White House also released three reports, on financial aid simplification, 529 savings plans, and the major barriers to a college education.

[Inside Higher Ed]

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The college financial aid system rivals only the IRS in its complexity. But change is on the way. This week, we've asked visiting blogger Sandy Baum, professor of economics at Skidmore College and special consultant to the College Board, to bring us up to speed on college financial aid. Here are the six most important developments:

1. More generous Pell grants.

2. Income-based repayment for federal student loans.

3. A simpler FAFSA form.

4. Transfer of income tax data.

5. Changing sources of college loans.

6. Increasing financial aid (in some cases).

[US News & World Reports]

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Beneficiaries of the new Post 9/11 GI Bill may be more likely to attend four-year universities and enroll in college full time than were their recent veteran counterparts, who typically enrolled at community colleges and attended part time, according to a new report from the American Council on Education.

“Veterans and service members who are eligible for the new GI Bill will receive more generous benefits that will broaden the choices they have when pursuing higher education,” Alexandra Walton Radford, the report’s author and a research associate at MPR Associates, an educational consulting firm, said in a statement. “While these students have previously been concentrated at public two-year colleges, these new benefits may encourage them to seek entry into more expensive colleges, particularly if those institutions demonstrate responsiveness to their needs.”

In 2007-8, veterans and active-service military members made up only 4 percent of undergraduates enrolled in American institutions of higher education. Of that group, 43 percent attended community colleges, 21 percent attended public four-year colleges, 13 percent attended private four-year colleges and 12 percent attended for-profit institutions. The rest attended more than one type.

Given the expansion of benefits now available through the new GI Bill, Jacqueline E. King, assistant vice president of ACE’s center for policy analysis, said she believes it is “reasonable to assume” that veterans will “make use of these benefits in a way they have not in the past.” As a result, she and others argue that this full-time/part-time data from the 2007-08 cohort of veterans make the case that, as many more veterans will benefit from the new GI Bill, more of them will seek to attend college full time. [Inside Higher Ed]

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The push to simplify the process of applying for federal financial aid has been steadily building momentum, with federal officials (in both of the last two administrations) joining advocates for students and financial aid experts in a show of near unanimity on the idea that procedures and documents (like the Free Application for Federal Student Aid) should not be discouraging students from seeking financial help for college.

The National Association of State Student Grant and Aid Programs, which represents officials who oversee the awarding of state-based financial aid, released a survey of its members on Tuesday that might be seen, at the extreme, as trying to put the brakes on the simplification runaway train; at the least, it's a call for their needs and those of their students to be considered as policies evolve.

But problems emerge in the eyes of state aid officers when talk turns -- as it has in proposals from financial aid experts and a College Board-organized panel of researchers and policy makers -- to dramatically altering the types of financial information collected about aid applicants. The most aggressive simplification proposals have recommended basing the awarding of federal Pell Grants on adjusted gross income and family size, wiping out other aspects of the current federal methodology used to calculate a student's expected family contribution.

Going that direction "would have financial, administrative, statutory and regulatory consequences to state need-based financial aid programs," because almost all states use the expected family contribution to allocate their own need-based aid, the state aid group says in its survey.

"A technological solution that reduces appropriately the basic FAFSA to a minimum, but also provides a means for obtaining data needed by individual states, would be ideal," the NASSGAP report concludes.  [Inside Higher Ed]

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Sallie Mae, the nation's largest student-loan company, spent $2-million on lobbying in the first half of this year in an effort to persuade lawmakers to consider alternatives to President Obama's plan to end bank-based lending to students and replace it with direct lending, according to an analysis by The Huffington Post.

The lender, which is pushing a counterproposal that would allow student-loan companies to originate loans before selling them to the government, has hired several Washington-based lobbying firms, including a group led by Tony Podesta, a top Democratic fund raiser with longstanding ties to members of Congress. But its key hire was Jamie Gorelick, a deputy attorney general in the Clinton administration and partner in the law firm of Wilmer, Cutler, Pickering, Hale and Dorr. The firm billed Sallie Mae $270,000 for its work in the first half of 2009, according to the analysis.

Sallie Mae spent $3.4-million lobbying last year, according to the Center for Responsive Politics. It also showered campaign contributions on individual members of Congress, including $26,150 for Rep. Paul Kanjorski of Pennsylvania, chairman of the House Financial Services Committee and a key Democratic ally, and $10,000 on moderate "Blue Dog" Democrats. Among Democrats, the Blue Dogs have been the most vocal in their opposition to the president's plan, warning of job losses that could result from a switch to 100-percent direct lending. [The Chronicle of Higher Education]

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Logan Stark's classmates scramble for courses with professors who top instructor-rating Web sites. But when the California Polytechnic State University student enrolled in a biochemistry class on the San Luis Obispo campus, he didn't need to sweat getting the best.
It was practically guaranteed.

That's because much of the class was built by national specialists, not one Cal Poly professor. It's a hybrid of online and in-person instruction. When Mr. Stark logs in to the course Web site at midnight, a bowl of cereal beside his laptop, he clicks through animated cells and virtual tutors, a digital domain designed by faculty experts and software engineers.

By the time Mr. Stark steps into the actual lecture hall, the Web site has alerted his professor to what parts of the latest lesson gave students trouble. That lets her focus class time on where they need the most help.

Mr. Stark's class is one of about 300 around the world to use online course material—both the content and the software that delivers it—developed by Carnegie Mellon University's Open Learning Initiative. If the Obama administration pulls off a $500-million-dollar online-education plan, proposed in July as one piece of a sweeping community-college aid package, this type of course could become part of a free library available to colleges nationwide.

The government would pay to develop these "open" classes, taking up the mantle of a movement that has unlocked lecture halls at universities nationwide in recent years—a great course giveaway popularized by the OpenCourseWare project's free publication of 1,900 courses at the Massachusetts Institute of Technology. Millions worldwide have used these online materials. But the publication cost—at MIT, about $10,000 a course—has impeded progress at the community-college level, says Stephen E. Carson, external-relations director for MIT OpenCourseWare.

The plan coincides with Mr. Obama's goal for the United States to have the highest proportion of college graduates in the world by 2020. But Marshall S. (Mike) Smith, senior counselor to Secretary of Education Arne Duncan, feels that won't happen simply by moving middle- and high-school students further through the system. Higher education also needs to rope in older students who never went beyond high school, or who abandoned college before finishing a degree, he says. [The Chronicle of Higher Education]

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A majority of colleges plan next year to continue using a bank-based student-loan program that President Obama hopes to do away with the following year, according to survey results released on Monday by Student Lending Analytics, an independent research and advisory firm.

Mr. Obama has said the federal government will save billions of dollars each year by eliminating the federal guaranteed-loan program and switching all colleges to the government-run direct-lending program. But 56 percent of the 453 survey respondents will continue to use the guaranteed-loan program next year, and only 8 percent said they planned to switch to direct lending.

One out of five colleges that responded to the survey plan to use the direct-lending program in the 2009-10 academic year, and 7 percent are unsure which program they will use. [The Chronicle of Higher Education]

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Todd Sorensen gave a great webinar over the lunch hour today detailing recent changes in the ADA. His power point slides from the presentation can be accessed here. Feel free to email Todd at tsorensen@williamskastner.com if you have any questions or would like additional information.

Stay tuned for Williams Kastner's next webinar, "How Have the FERPA Amendments Been Received and Will They Withstand Legal Scrutiny?" on September 16. Lisa C. Williams will cover the January 2009 amendments to FERPA and review how the courts have interpreted the amendments. Any schools maintaining student records will benefit from this webinar.

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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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Democratic leaders in the House of Representatives on Wednesday formally introduced legislation to restructure the federal student aid programs and signaled their intention to move with lightning speed to pass it. The Committee on Education and Labor announced that it would take up the $87 billion legislation next Tuesday, and given the strong Democratic majority on the panel, as well as in Congress, passage is assured. The legislation got a strong endorsement Wednesday from the Obama administration, whose student loan proposal the House legislation closely mirrors. On a telephone news conference with Rep. George Miller (D-Calif.), chairman of the Education and Labor Committee, Education Secretary Arne Duncan offered his "clear support" for the House bill despite some differences with President Obama's original plan, and said it was fully consistent with the administration's plan's "fundamental principles."

Duncan and Miller also both went out of their way -- in discussing the money the House bill would make available to fund President Obama's proposed $12 billion community college initiative -- to emphasize how the legislation would turn up the pressure on colleges to ensure that they are not just admitting students, but getting them to degrees. Discussing community college graduation rates, Miller said that the "statistics are currently not acceptable to the administration or the Congress," and said the legislation was designed to ensure that "community colleges change and adapt to the needs of our society and our families. That test will be on the community colleges." [Inside Higher Ed]
 

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The last few weeks have witnessed a truly remarkable discussion in Washington and on Wall Street surrounding for-profit higher education.

Reports (and sometimes rumors) about the prospect of tougher federal regulation of career colleges by the Obama administration have made the rounds among Wall Street analysts, driving the stocks of the largest, publicly traded companies in the sector down by more than 20 percent and prompting the U.S. Education Department two weeks ago to hold unprecedented conference calls with investors and analysts to try to reassure them that department officials did not have it in for for-profit colleges.

The biggest dust-up, though, came last month when the department announced that it would undertake a new round of negotiations over possible changes to federal regulations governing policy areas, such as incentive compensation paid to student recruiters, that are predominantly a factor among career colleges.

The announcement of the new regulatory review was made quietly (as is the norm) in the Federal Register, but after some analysts cast the review as big trouble for the industry and others began bombarding the department with calls seeking clarification, Shireman decided to hold the unprecedented conference calls.

Jeffrey Volshteyn, a vice president at J.P. Morgan, is among the analysts who thinks that “people are just reading way too much into this,” and that the department will “enforce the rules just like it always has,” for the for-profit colleges and all others.

Jeffrey Silber of BMO Capital Markets, who is among the longest-serving analysts of the career college sector, tends to agree with Volshteyn that the department is not taking particular aim at for-profit colleges. But he also said that the uncertainty about the department’s agenda for rule making (an agenda that will take shape, in part, out of public hearings that begin this week) and the general inclination toward regulation of a Democratic administration are likely to provide plenty of fodder for those who seek to keep for-profit colleges -- and their stocks -- on the defensive.

“Could you see increased regulation” of for-profit colleges? he asked rhetorically. “Sure, though probably on the margins. But this thing is not going to be resolved for months, and there’s no telling what kind of noise will be generated in the meantime.” [Inside Higher Ed]

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In his remarks, the president himself acknowledged that job training was not a “silver bullet.” But he said his new proposal, hailed as significant by education advocates, would greatly increase the number of people who earn the sort of two-year associate’s degrees that employers increasingly demand.

“In the coming years,” Mr. Obama said, “jobs requiring at least an associate degree are projected to grow twice as fast as jobs requiring no college experience. We will not fill those jobs, or keep those jobs on our shores, without the training offered by community colleges.”

Most of the $12 billion in Mr. Obama’s plan would go toward programs enticing community colleges to do more to lift graduation rates and better prepare students for jobs. Some would go to the modernizing of facilities as well, and some to the development of an Internet curriculum available to students everywhere.

Officials said that over the next 12 years, the plan would increase the number of community college graduates by a total of five million beyond the number who would graduate without it.

The new federal money would be spent over the course of a decade, starting with the fiscal year that begins in October. Officials said the cost of the legislation would be covered by savings from the president’s plan to end the role of private banks in the federal education lending system.

Representative George Miller, the California Democrat who heads the House Education and Labor Committee, said Tuesday that he would incorporate the president’s community college plan into the student loan bill, which Mr. Miller expects to introduce on Wednesday.

The loan legislation is facing an intense lobbying campaign by banks, making it one of several tough initiatives Mr. Obama is trying to push through Congress before the August recess. [The New York Times]

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More than 75,000 members of the U.S. National Guard will not be eligible for benefits under the Post-9/11 GI Bill unless Congress passes corrective legislation, the independent military newspaper Stars and Stripes reported today.

Guard members called to active duty since September 11, 2001, in Iraq and Afghanistan do qualify for the benefits. But Guard members called to active duty within the United States do not qualify, the newspaper reported.

Members of the National Guard with domestic assignments include those who responded to Hurricane Katrina and those who have been deployed to the United States-Mexico border. [The Chronicle of Higher Education]
 

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A hot topic in Washington this week is the Obama administration's student-lending plan that could eliminate the need for guarantee agencies. While Congress is set to being debates on the plan, a new report from the New American Foundation calls the 35 guarantee agencies that currently administer student loans inefficient middlemen that waste taxpayer money. An overview of the report appearing in the Chronicle of Higher Education can be found here.

While many are critical of the current system, some smaller schools have concerns about the new program. It could cost some institutions hundreds of thousands of dollars, adding to demands for resources as colleges are already grappling with a bad economy. Retraining of staff, acquiring new software, and hiring new employees are just some of the costs that colleges could incur if the plan is passed. Click here to read more about the impact on smaller colleges and universities.

While many in Congress, including Rep. George Miller of California, the Democratic chairman of the education committee in the U.S. House of Representatives, support the plan, others haven’t given up on the guaranteed-loan program. Read more here about Rep. Miller's proposed legislation and here about opposition to the new plan. [The Chronicle of Higher Education]

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Washington — The U.S. Education Department announced today that it had awarded $9.7-million in grant money to 26 colleges and universities to improve their campus emergency-management plans.

Ranging from $167,343 to $768,334, the individual awards will be disbursed with assistance from the U.S. Department of Health and Human Services and the Substance Abuse and Mental Health Services Administration.

The grant recipients will be required to focus on four phases of emergency management: prevention-mitigation, preparedness, response, and recovery. They can also use the funds to update existing plans, conduct assessments of campus facilities, provide training to staff members and students, organize large-scale drills, team up with local emergency personnel and community partners, and work with students with mental-health needs who may be at risk of violent behavior on the campus. [The Chronicle of Higher Education]

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Washington — Congress has yet to decide whether to adopt President Obama’s proposal to end the bank-based guaranteed-loan program and move all colleges to direct lending by the 2010-11 academic year. But the U.S. Education Department is already preparing for just such a transition.

Mr. Obama has said the government would save $4-billion annually by eliminating the guaranteed-loan program — which provides government subsidies to banks that issue the loans — and moving all colleges to the direct-loan program, under which the Education Department issues loans directly to students through their colleges. The president plans to use the savings to bolster the popular Pell Grant program, which provides money to low-income students.

On Wednesday the department began sending letters to colleges outlining steps it is taking to ease the switch to direct lending.

Congress is set to decide on the president’s proposal this month. Several Republicans have voiced strong opposition to the plan, saying it would cost thousands of jobs and prevent colleges from choosing among competing loan programs. [The Chronicle of Higher Education]

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When the new GI Bill kicks in Aug. 1, the government's best-known education program for veterans will get the biggest boost since its World War II-era creation. But the benefit is hardly the "Government Issue," one-size-fits-all standard the name implies.

In fact, depending on where service members and veterans decide to attend college, they could receive a full ride, or very little.

An Associated Press review of state-by-state benefits under the new bill shows huge discrepancies in the amount veterans can receive.

For example:

Veterans attending New Hampshire colleges like Dartmouth might get $25,000 from the government each year, and in Dartmouth's case essentially a free ride, thanks to an additional grant from the Ivy League school. But in neighboring Massachusetts, it is a different story. At that state's numerous private schools — many just as expensive as Dartmouth — the government's baseline tuition benefit is only about $2,200 a year.

Veterans who choose a private school in Texas could get close to $20,000 a semester from the government for a typical course load. Those picking schools in California will get nothing for tuition.

The explanation stems from the formula the government created, as well as a much-criticized decision by the Department of Veterans Affairs on how to implement the law. The new GI Bill covers full in-state undergraduate tuition and fees at any public college. That's far more generous than the old GI Bill, which provides a monthly stipend that is the same from state to state. But Congress also wanted to help veterans attend often pricier private schools. So the new bill offers them an amount equal to the tuition at the most expensive public college in the same state. That penalizes veterans going to private colleges in states that have kept their public university tuition low.

About 80 percent of veterans tapping the new bill are expected to attend public institutions. But some of the remaining 20 percent — those planning to attend private colleges, graduate schools, and the for-profit institutions that are hugely popular with veterans — are angry. [San Francisco Chronicle]

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Washington — Dozens of student-loan entities today proposed an alternative to President Obama’s plan to overhaul the federal student-loan system and move to 100-percent direct lending. The groups include banks, nonprofit state agencies, state-based guarantee agencies, and Sallie Mae, the nation’s largest provider of student loans, among others.

The groups’ consensus proposal would preserve a significant role for private and nonprofit lenders and guarantors in the federal system. It is being released as the U.S. House of Representatives education committee prepares to consider the president’s student-loan plan, action that could be scheduled as soon as this week. In recent weeks a number of lenders and guarantors have been furiously circulating various counterproposals to the president’s idea.

Instead, it would create a fee-for-service system to pay providers for originating, servicing, and collecting on student loans. The plan would allow colleges to pick the providers they want to originate and service federal loans for their students. [The Chronicle of Higher Education]

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Washington — A total of 1,165 colleges have joined the Yellow Ribbon Program, a federal effort to help military veterans attend college, a spokesman for the Department of Veterans Affairs told The Chronicle today.

Under the Yellow Ribbon Program, the government matches the amount of financial aid pledged by participating colleges above the base educational benefits provided in the new GI Bill. Qualifying veterans receive an amount equal to the cost of attending an in-state, public four-year college.

The number of participating colleges has more than doubled since June 11, when the department announced that 573 colleges had committed to the program.

Participating colleges can limit the aid they offer. Last week two student-veteran advocates criticized institutions that had limited the number of veterans they will support through the program to only a portion of their overall student-veteran population. [The Chronicle of Higher Education]

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Washington — Congress has approved a bill to patch holes in the Higher Education Act, including a glitch that would have forced thousands of veterans to return federal student aid they had been awarded for the coming academic year.

The House passed the measure for a second time yesterday because the Senate version of the bill added a scholarship program providing the maximum Pell Grant award to any student who had a parent die while on active military duty in Iraq or Afghanistan. Both the House and Senate approved the measure unanimously.

The legislation, which President Obama is expected to sign, would allow loan-guarantee agencies to sell rehabilitated student loans to the Education Department, a policy that had appeared in the version of the bill the House passed in March. The change would allow thousands of borrowers who have been stuck in default to escape from their debt and clear their credit histories.

The bill also would ensure that the Education Department’s “experimental site” program will continue for another year. The program allows participating financial-aid offices to use experimental approaches when awarding aid to students, with a goal of identifying innovative approaches that would work for the entire federal student-aid program. [The Chronicle of Higher Education]

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June 25, 2009

WASHINGTON -- Like many a politician, Education Secretary Arne Duncan is at his best when he's talking off the cuff.

"This damn form was killing us," Duncan said to a small group of reporters after a more formal presentation Wednesday to the White House press corps about the Obama administration's plan to simplify the Free Application for Federal Student Aid. He was talking about how big a deterrent the federal form was to getting students from low-income families to apply to college, when Duncan, as superintendent of Chicago's public schools throughout this decade, was trying to increase the district's college-going rates.

As Duncan and the Education Department trumpeted the proposal Wednesday with the high-profile appearance at the White House, along with IRS Commissioner Doug Shulman, the information they provided left many details to be determined. It seems clear, though, that as with many policy initiatives important to Obama, the administration seems intent on making forward progress even if it can't go as far as some think it should. "Don't let the perfect be the enemy of the good," Obama has taken to saying about health care and other matters, and the administration's approach on FAFSA simplification seems to follow that approach, too.

As Duncan laid out the plan Wednesday, the Education Department will, right now, make several changes that do not require Congressional approval. This summer, the department will take advantage of existing technology on the Web-based FAFSA to allow married or independent students to skip questions about their parents, among others. In January, the department will stop requiring students with low incomes to answer questions about their financial assets, and only returning students will be asked about prior drug convictions, since the question does not affect first-year students. Department officials said they would work closely with state officials to set up the electronic form to "make it easier to answer questions that the states need but the federal government does not."

Other changes the department seeks would require Congressional approval. Department officials said they would ask Congress to eliminate a total of 29 questions about students' and families' finances that are not on the federal tax form. Several of those relate to families' assets ("As of today, what is the net worth of your (and spouse’s) investments, including real estate (not your home)?"), and eliminating the consideration of assets for most students by abandoning those questions would be among the more controversial steps the Obama plan calls for. [Inside Higher Ed]

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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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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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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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Secretary of Education Arne Duncan today announced a new $7-million grant program for community colleges to provide job training for laid-off autoworkers and other unemployed people.

The grants will provide seed funds for community colleges and other organizations to develop programs that help adults develop new career skills.

The new programs can offer services such as tutoring and academic and career counseling, or remove financial constraints for adults returning to college by assisting with child care, transportation, or textbook costs. The programs are meant to serve as national models that can be replicated elsewhere in the country.

The Department of Education expects by mid-September to award 28 grants of $300,000 to $750,000 each over a three-year period, with projects beginning on or about October 1. However, the new programs, which will be financed through the Fund for the Improvement of Postsecondary Education, or Fipse, must be sustainable beyond the grant period.

The grant application will be published in Friday’s Federal Register. [The Chronicle of Higher Education]

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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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[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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WASHINGTON – With President Obama talking a big game about boosting support for community colleges, some educators have released a specific plan to do so in an ambitious way.

Thursday, the Brookings Institution’s Metropolitan Policy Program released a report chock-full of recommendations for the federal government to bolster its commitment to the country’s community colleges and help transform them into “engines of opportunity and prosperity.” Among the report’s key recommendations, it challenges the federal government to double its current direct level of support to America’s community colleges so that federal funds would account for more than 10 percent of their budgets. The report also calls for the government to guarantee that community colleges receive at least half of the $2.5 billion “College Access and Completion Fund” – a debated section of the 2009-10 federal budget that would support state efforts to boost the college completion rates of low-income students.

The report also calls for the government to guarantee that community colleges receive at least half of the $2.5 billion “College Access and Completion Fund” – a debated section of the 2009-10 federal budget that would support state efforts to boost the college completion rates of low-income students. [Inside Higher Ed]