Tag Archives: federal

Latest on Higher Education-Related Actions on Financial System Legislation

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Earlier this week the U.S. approved an amendment to the Restoring American Financial Stability Act of 2010 (S.3217) that would result in lower fees paid by colleges when students use credit and debit cards to pay for tuition and books.

Amendment S. Amdt. 3989, with a vote of 64-33, targets the “swipe fees” that banks charge merchants to process credit- and debit-card payments. The fees average 1-2 percent of a purchase.

The amendment would require the government to issue regulations to ensure that debit-card swipe fees are “reasonable and proportional” to the cost of processing transactions. In addition, the amendment would allow retailers to set minimum transaction amounts for card purchases and offer discounts to customers who pay with lower-cost cards or with cash.

As reported earlier in this blog, efforts to include an amendment to require private educational lenders to obtain institutional certification prior to making loans to students is still under consideration. Representatives from several organizations that represent financial aid administrators, lending institutions, and students continue to urge the U.S. Senate keep this student loan related-language in the bill.

Finally, several additional amendments are still in the works that could effect private student loans. These amendments include:

  • An amendment from Senator Al Franken (D-MN) that would restore bankruptcy protections to student loan borrowers.
  • An amendment from Senator Dick Durbin (D-IL) that would extend the newly created Consumer Financial Protection Bureau’s (CFPB) authority to banks and credits unions with assets between $1 billion and $10 billion that originate private student loans.
  • An amendment from Senators Charles Schumer (D-NY) and Jack Reed (D-RI) that would enhance CFPB enforcement over non-bank entities that extend credit or make loans.  A vote on the final version of the bill is expected some time next week.

Potential Student Loan Language in National Finance System Legislation

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The Consumer Bankers Association, the Education Finance Council, the National Council of Higher Education Loan Programs, the National Association of Student Financial Aid Administrators, the Institute for College Access and Success and the U.S. Public Interest Research Group are urging the U.S. Senate to include student loan related-language in the Restoring American Financial Stability Act of 2010 (S.3217).

The language would require providers of non-federal student loans to get colleges’ approval before they make such loans to students. The intention is to assure that borrowers turn to more-expensive private loans only after they have exhausted federal, state, and institutional grants or at least less costly federal student loans.

The provision would mimic similar language passed in December by the U.S. House of Representatives in the Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173), which included a provision (Sec. 4818) that would require private educational lenders to obtain institutional certification prior to making loans to students. 

New Bill Introduced Urges Prioritization of Pell Grant

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Last week U.S. Rep. Paulsen (R-MN) introduced legislation to express the sense of Congress that the federal Pell Grant program should be a high funding priority.

House Resolution 5198 (HR 5198) was introduced at a time when the Pell Grant currently faces an estimated $5 billion budgetary shortfall that may threaten to reduce awards to students.

The shortfall is due to a dramatic increase in the number of students served by the program. This year the program is estimated to to provided aid to 8.3 million undergraduate students.

The bill has been referred to the House Committee on Education and Labor for further consideration.

Obama Administration Strengthens Title IX

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In late April, the Obama Administration announced that they would issue a “Dear Colleague” letter to withdraw a 2005 interpretation of Title IX policy.

Enacted in 1972, Title IX mandates that any educational institution receiving federal aid for programs and activities cannot discriminate on the basis of gender.

Over the last several decades the U.S. Department of Education’s Office for Civil Rights has provided three options to determine whether athletic programs at higher education institutions comply with Title IX:

  • Match the proportion of female athletes to the proportion of women on campus,
  • Show a history and continuing practice of increasing sports for women, and
  • Prove the school has met the interest and ability of women to participate in athletics.

However, under the third option, the 2005 ruling, which was withdrawn by the Obama Administration, allowed higher education institutions to use a survey to prove a lack of athletic interest.

The “Dear Colleague” letter from the Obama Administration clarifies that the Office of Civil Rights requires higher education institutions to use multiple indicators to assess athletic interests and abilities and does not consider survey results, alone, to be sufficient evidence to justify an imbalance in women’s sports.

Recent Report Suggests Putting Brakes on Teacher Reform

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This week the Committee on the Study of Teacher Preparation Programs in the United States released a report urging the U.S. Department of Education and states to collect more data on teachers and their routes to becoming teachers before initiating widespread reform of education schools and alternative route programs.

The report, Preparing Teachers: Building Evidence and Sound Policy, was published by the National Research Council and funded by the Education Department’s Institute for Education Sciences.

The Committee essentially responded with a “none-of-the-above” statement to the congressional charge to collect and analyze data and research on undergraduate and graduate teacher preparation programs, as well as alternative routes to certification; and determine whether teachers of reading, math, and science were well-prepared for their jobs.

The Committee concluded that “because of the paucity of systematic research as well as the enormous variation in virtually all aspects of teacher education programs and pathways we cannot draw any specific conclusions about the characteristics of current teacher preparation programs.”

According to Ellen Condliffe Lagemann, the Committee Chair, “at a time that people care a lot about education and want to improve it, there is so little known about teacher preparation at a national level. Strong policy has to be built on strong evidence and we don’t have strong evidence.”

The Committee, in the report, calls for research that would compare programs’ selectivity, timing, and characteristics, as well as various means of teaching classroom management skills and how to teach a wide range of students, to help determine essential components of teacher preparation programs.

Higher Education Advocates Express Concern with Proposed Changes to Tax Credits

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This week the National Association of Student Financial Aid Administrators (NASFAA), the American Council on Education (ACE) and other higher education advocates shared concerns with the U.S. Department of Treasury’s proposal to institute a community service requirement as a condition for receiving a tax credit for tuition and related expenses.

In a letter to the Department more than 20 higher education organizations expressed several concerns about requiring mandatory community service as a condition for receipt of federal higher education tax credits.

The letter argues that this proposal, if implemented, could:

  • Detrimentally impact a number of students, particularly low-income and nontraditional students,
  • Be extremely difficult and costly to implement and administer, and
  • Inadvertently harm the thriving community service and service-learning efforts already occurring on campuses across the higher education community.

Financial Literacy Commission Launches New Website

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On Tuesday, the Financial Literacy and Education Commission (FLEC) launched a redesigned financial literacy education website, My Money.

The new website includes enhanced interactive features and utility to provide more resources to Americans seeking information that can inform their personal financial decisions. The website creates an online point of access to financial information from the twenty-one federal agencies, departments and bureaus that comprise the Financial Literacy and Education Commission.

Through the website users will be able to:

  • Find information about how to plan for a host of life events that have financial implications, including having children, home ownership, and retirement,
  • Find information targeted to their personal or professional situation, and
  • Access money management tools including a financial savings calculator and a college preparation checklist.

The website is one of the steps the Obama Administration is taking to expand financial education and access for the future. President Obama recently proclaimed April to be National Financial Literacy Month.

New Rules to be Proposed on Student Privacy

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On Monday, the U.S. Department of Education announced that they would propose new regulations governing student privacy rights in the next several weeks.

In the announcement, the Department stated that they would revise rules to implement the Family Educational Rights and Privacy Act (FERPA) with two goals in mind.

  • Strengthen enforcement, and
  • Clarify how states can use information from the statewide longitudinal data systems to inform policy decisions without running afoul of the student privacy law.

Academics Not Sole Focus of ESEA Renewal

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Last week the Senate Health, Education, Labor and Pensions Committee held a hearing focused on the renewal of the Elementary and Secondary Education Act (ESEA).

The focus of much of the discussion centered on the need to emphasize the health and other needs of children in addition to academic accomplishments.

Advocates who support the focus of the “whole child” in the rewrite of the ESEA were acknowledged by lawmakers who agreed that the idea of educating children encompasses a wide range of support services.

These services include, but are not limited to, dental and mental health, prekindergarten, library services, after-school enrichment, mentoring, college counseling, and increased parent and community involvement.

Despite the acknowledgment that non-academics should be encompassed in the new ESEA, lawmakers were all too aware of the additional resources this will likely require to be successful.  As Senator Harkin stated, “as you add all this stuff on, you’re going to have to add more people, mentors, librarians…How do we do that?”

Still advocates for the “whole child” concept argued that without such a holistic approach to elementary and secondary education boosting student achievement will be very difficult.

National Debate on Higher Education Deems Current Model Broken

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This week the University of Virginia’s Miller Center for Public Affairs sponsored a public debate of higher education leaders from across the country in Washington D.C.

The debate focused on the current higher education business model, defined within the context of the debate as:

Since the mid-1980s, the costs of higher education in America have steadily shifted from the taxpayer to the student and family. As state funding has dwindled, colleges and universities have sought to fill these gaps through a variety of avenues, including philanthropy and research support, but the area of highest growth has been tuition. The share of institutional budgets provided by tuition increased from 22% in 1985 to 36% in 2005. As state budgets slip further into structural deficit, there is no reason to think this trend will reverse itself.

These costs are rapidly outstripping the ability to pay. Residential students are now looking at an annual cost of roughly $20,000 per year for a public institution, and nearly $40,000 per year for a private institution. While median family income between 1982 and 2006 rose by 147%, college tuition and fees soared by 439%. Even with financial aid, the concern is that these trends will discourage many low and middle income young people from considering college a realistic option, thereby lowering our national educational level, reducing future economic growth, and undermining the promise of equal educational opportunity. Is this the natural evolution of the educational marketplace, or is the business model of higher education broken?

Proponents of this statement, including Gail Mellow, President of LaGuardia Community College and William Kirwan, Chancellor of the University System of Maryland, argued that higher education financing is indeed fractured.  Higher education institutions, in other words, though technically solvent, are not meeting the public purposes of access, opportunity, affordability, completion, and international competitiveness required of them.

According to Chancellor Kirwan, “…state budget cuts are harming many colleges and universities…that the nation’s production of college graduates will remain flat without an extensive re-engineering across higher education.”

Those who oppose this statement, including Richard Levin, President of Yale University and Daniel Hamburger, President and Chief Executive of DeVry Inc., strongly suggested that the existing higher education business model is working. Both higher education leaders cited current enrollment levels.

Both leaders noted that China and India look at the U.S. with envy with regard to the diversity and flexibility of the nation’s higher education system. “The strength of our system is its diversity and its flexibility,” stated Hamburger.

The debate was followed by a question and answer period. The questions ranged in scope from college costs to the achievement gap.