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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Rep. John Kline of Minnesota, the top Republican on the House education committee, is accusing the Education Department of improperly lobbying colleges to support legislation to overhaul student loans. He says the department has pressed institutions to switch to its direct-loan system before Congress votes to terminate the bank-based system of student lending. [The Chronicle of Higher Education]

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The U.S. Department of Education has released a template that colleges can use to create the net-price calculators they are required to offer on their Web sites in two years.

The calculators, which are required under a provision of the Higher Education Opportunity Act, will allow prospective students and their families to estimate their personal out-of-pocket expenses at a particular college.

Colleges have two years, until October 29, 2011, to have their calculators up and running, but they have been encouraged to take action sooner, and some already have made calculators available. [The Chronicle of Higher Education]
 

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The economic slump has not slowed the upward spiral of college costs, the College Board reported Tuesday. Tuition and fees now average $26,273 at private colleges and $7,020 at public four-year institutions, with prices rising faster in the public sector. Compared with the past school year, tuition and fees rose 6.5 percent at public four-year colleges and 4.4 percent at private, nonprofit, four-year institutions, according to the report. Those were steeper rates of increase than in previous years, after adjusting for inflation. Over the past decade, annual increases have averaged 4.9 percent at public colleges and 2.6 percent at private colleges.

The companion report, "Trends in Student Aid 2009," shows that financial assistance is rising at a similar clip, contributing to a widening gap between the published price of college and the amount students actually pay. [The Washington Post]

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An audit of the U.S. Department of Education's information systems for managing the federal student-aid programs is calling for increased security, saying several vulnerabilities could compromise the confidentiality and availability of financial and personal data in the systems. The report, by the department's Office of Inspector General, gives no indication that the flaws have led to a security breach, but it says the department needs to improve security controls over the certification and accreditation process for the systems. [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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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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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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With the state of the economy, everyone is looking to save a little money. The folks over at onlinedegree.net have posted a list of 50 scholarships that are geared towards the eco-minded student. Ranging from general to specific, this list is helpful for students and administrators. Click here  to see the list and to read more. [Online Degree]

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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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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.