Tag Archives: federal

Higher Education Presidents of the Western U.S. Meet to Discuss Business Model

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This week the University of Washington hosted a regional meeting of the Association of Public Land-Grant Universities to discuss future funding for public universities nationally.

The Presidents and other top leaders from approximately 30 colleges and universities in the Western United States discussed their common experiences and strategized about how to “reset” their finances.

Common among the discussion was the concern that higher education continues to be the first area to get cut by states facing lower revenues and paying more for other public services/programs.

Strategies proposed incorporated a wide range of ideas including increased federal funding for institutions to make-up for the gap in reduced state funds and a model in which each state could have one univesity funded by the federal government, eliminating the need for out-of-state tuition surcharges at those institutions.

At the state level several strategies were also proposed inlcuding asking state lawmakers to set aside a fixed percentage of the budget for higher educaiton, emphasizing the job-creation record of universities, promoting achievements such as green technology, and telling people what is at risk.

The meeting is one of five taking place across the nation in hopes of developing a national strategy for securing the future of higher education institutions.

U.S. Senate Committee Holds Hearing on G.I. Bill Implementation

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Last week the U.S. Senate Committee on Veterans’ Affairs held a hearing on the implementation of the new Post-9/11 G.I. Bill.

The focus of the hearing was to identify problems encountered to date with the implementation of the legislation and learn how they were addressed. In addition, committee members focused on understanding what needs to occur to ensure the benefits are delivered in a timely and accurate way.

Those who testsified at the hearing highlighted several key issues with regard to the  implemenation of the legislation including:

  • Long delays
  • Financial strain while waiting for education benefits
  • Difficulty for higher education institutions to accomodate veterans while waiting for funding
  • Variations in tuition benefits by state and student enrollment
  • Short-turn around for implementation of legislation

Some of the solutions that were taken to address these problems included the issuance of emergency advance payments and redirection of staffing within the Veterans’ Administration (VA) to processing claims.

In addition, the Veterans’ Administration has partnered with Space and Naval Warfare Systems Center Atlantic to develop an end-to-end claims processing solution that utilizes rules-based, industry-standard technologies for the delivery of education benefits.  This is the VA’s long-term strategy for implementation of the Post-9/11 G.I. Bill.

Senate Committee Takes Action on FY11 Budget Resolution

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Yesterday, the Senate Budget Committee approved a fiscal year (FY) 2011 budget resolution. The annual budget process calls for a budget resolution, which acts as a non-binding roadmap for federal appropriations for FY11.

The resolution passed by the Committee call for $4 billion less in spending than was requested in President Obama’s budget request in February. The resolution assumes the cuts would come out of international relations, though this assumption is not binding.

In addition, the resolution maintains the majority of Pell Grant funding on the discretionary side, instead of funding the program through mandatory spending as requested by Obama. The resolution also assumes Congress will identify an additional $5 billion to cover the remaining shortfall for Pell Grant funding.

Next steps for the budget resolution remain unclear. It is likely the Senate will set aside the resolution to take up financial reform in the near future, but this is unclear. The House has not scheduled any action on similar legislation at this time.

U.S. House Subcommittee Discussed Bill to Allow Private Student Loans to be Discharged in Bankruptcy

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Yesterday, the U.S. House Judiciary Committee’s Subcommittee on Commercial and Administrative Law held a hearing to discuss the Private Student Loan Bankruptcy and Fairness Act of 2010.

The Act would reverse current bankruptcy protections for private student lenders included in the 2005 bankruptcy law and allow most private student loans to be discharged in bankruptcy.

The National Association of Student Financial Aid Administrators and other groups representing students, consumers, institutions of higher education, and civil rights and public policy organizations have expressed support for the bill.

Representative Steve Cohen (D-TN), sponsor of the bill and the chairman of the Subcommittee, echoed the support of these organizations at the hearing. He stated, “the bankruptcy system should work as a safety net that allows people to get the education they want with the assurance that, should their finances come under strain by layoffs, accidents, or other unforeseen life events, they will be protected.”

Those opposed to the bill, including many nonprofit and state-based student loan providers, cited concerns with regard to increased financing costs, including higher market interest rates for borrowers.  As the President of the Education Finance Council, which represents nonprofit and state-based student loan providers, stated at the hearing, “making all private student loans funded by nonprofits completely dis-chargeable in bankruptcy would raise financing costs, harming the ability of these public -purpose entities to continue to offer below market interest rates to borrowers.”

In addition, opponents of the legislation question why Congress would not extend the same consumer protections to all education loans, regardless of source or tax status of the entity or governmental institution providing the funds.

Two versions of the legislation have been introduced in Congress. The Private Student Loan Bankruptcy Fairness Act of 2010 (H.R. 5043) was  introduced by Rep. Steve Cohen (D-TN) in the House. In the Senate, The Restoring American Financial Stability Act of 2010 (S. 3217) was introduced by Sen. Christopher Dodd (D-CT).

Though very similar with regard to intentions the Senate bill would allow all private education loans to be discharged in bankruptcy, while the House bill would not allow private loans substantially funded by nonprofit institutions to be discharged. Neither bill would allow federal student loans to be discharged in bankruptcy.

Legislation Introduced in U.S. House to Allow Private Loans to Be Discharged in Bankruptcy

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Earlier this week, the Private Student Loan Bankruptcy Fairness Act of 2010 (H.R. 5043) was introduced in the U.S. House of Representatives.

The Act would reverse current bankruptcy protections for private student lenders included in the 2005 bankruptcy law and allow most private loans to be discharged in bankruptcy. Prior to changes made in the bankruptcy code in 2005, only federal student loans and private loans where substantially all of the funds were provided by a non-profit institution were non-dischargeable through bankruptcy.

The bill, introduced by Rep. Steve Cohen (D-TN), is scheduled for a hearing today before the House Judiciary Committee’s Subcommittee on Commercial and Administrative Law.

Health Care Legislation to Impact College Students

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Two provisions in the recently-passed Federal health care legislation will directly affect college students.

The first, an extension of benefits for students under their parents’ plans, will allow college students to remain covered until the age of 26. The second, part of the Student Aid and Fiscal Responsibility Act (SAFRA), will change the way students borrow money for college. Instead of applying for private loans subsidized by the government, students may now apply directly to the federal government for borrowed aid. The bill also changes repayment requirements, allowing graduates to pay back their loans on a sliding scale based on their income. In addition, graduates who pursue employment in the public sector will enjoy the added benefit of loan forgiveness after ten years of service.

Changes to the Pell Grant were also made as part of the SAFRA, providing an increase in the award amount. In three years the grant will be changed to reflect the Consumer Price Index and be adjusted to keep pace with the rising cost of living.

Federal Legislation Introduced by Senator Patty Murray Would Improve Veterans Services

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Senator Murray, acknowledging the difficult job market and relatively inflated unemployment rates among veterans, has urged a commitment by the Federal government to veterans. Among its provisions, the legislation would:

  • Expand the GI bill to allow veterans to use benefits for apprenticeships and worker training programs in addition to college
  • Establish a Veterans Business Center program to help vets starting their own businesses
  • Create pilot programs to help vets utilize and expand technical skills learned in the military and market those skills to the civilian work force
  • Create the Veterans Conservation Corps, modeled on Depression-era Civilian Conservation Corps, which created jobs and facilitated construction projects around the country
  • Require a study that could lead to the expansion of the National Guard Employment Enhancement Project, which provides career transition assistance to National Guard members

Funding for the legislation is still pending a report from the Congressional Budget Office, but the bill already has bipartisan support in the Senate.

Federal Legislation Introduced to Extend Education Stimulus Dollars

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On Wednesday, Senator Tom Harkin (D-IA) sponsored and introduced legislation that would create a $23 billion education jobs fund, modeled after the State Fiscal Stabilization Fund (SFSF) that was established in the American Recovery and Reinvestment Act (ARRA).

The Keep Our Educators Working Act would be awarded to local educational agencies and public institutions of higher education for the support of early childhood, elementary, secondary, and post-secondary education. Funds would be used for compensation and benefits and other expenses necessary to retain existing employees, hiring new employees and on-the-job training activities for education-related careers.

The Act is introduced at time when many policymakers and education leaders are increasingly concerned about the upcoming 2011 fiscal year with regards to the steep drop in available funds once the billions of federal dollars made available over the last biennium run out.

Under the proposed legislation, the hope is that the extension of federal assistance to higher education and education will ward off budget cuts and tuition increases. The Act would provide each state’s governor with a formula-driven share of the $23 billion with which to replace any money that they have cut or will cut from their 2010 and 2011 budgets for elementary/secondary schools and public colleges and universities.

The intent is that each Governor will distribute the funds proportionally based on the amounts cut from the two sectors, but can “adjust” the amounts by up to 10 percent of the larger of the two totals. In addition, the money can only be used for “compensation and benefits and other expenses necessary to retain existing employees” or hire new ones, or for “on-the-job training activities” for “education-related careers”.  The money could not be used to supplant state funds in a way that restores or supplements “rainy day” funds or pays of debt.

Finally, the legislation would require states to sustain a level of education spending comparable to what they spent in 2006. Specifically, the bill requires governors to spend on both higher education and K-12 at least a comparable portion of their states’ revenues in 2010 as they spent in 2006, and a comparable portion in 2011 as they spent in 2009.

The bill has been deemed “emergency” legislation, allowing the money to come out of federal mandatory rather than annually appropriated funds. This means that the costs of the bill would not have to be offset by cuts in other programs.

While education and higher education leaders are thankful for the investment, it is unclear how much benefit institutions may derive form the legislation if passed because the bill only replaces funds that have been or will be cut from the public college budgets.  It also raises questions regarding the role of the state in supporting and investing in their own public education institutions.

The $23 billion request proposed in Harkin’s Keep our Educators Working Act of 2010 has also been introduced in the U.S. House as a part of a freestanding jobs bill Local Jobs for Americans Act (H.R. 4812).

U.S. Senate Appropriations Committee Holds Hearing on FY11 Budget Request

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Late this week, the U.S. Senate Appropriations Subcommittee on Labor, Health and Human Services, and Education held a hearing on the Presidents FY11 budget request.  Senators reaffirmed their commitment to close any remaining funding gaps that remain in the Pell Grant Program.

“The Pell shortfall is another danger on the horizon,” stated U.S. Senator Harkin, Chairman of the Senate Appropriations Subcommittee on Health, Education, Labor and Pensions.

National Education Association Offers Alternative to Administration’s Rewrite of ESEA

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This week the National Education Association (NEA) put forward detailed recommendations for the overhaul of the Elementary and Secondary Education Act (ESEA).  The ESEA is up for renewal this year.

Many of the NEA’s recommendations offer an alternative approach to the Obama Administration’s blueprint for rewriting the Act. The different approach recommended by the NEA continues a recent divergence that began with the Association’s objections to the structure of the Race to the Top Fund.

The recommendations put forth by NEA differ in many ways, including:

  • Failing to refer to the idea of “teacher effectiveness” as measured by evaluations that incorporate student academic growth.
  • Providing a less prescriptive approach with regard to interventions to turn schools around.
  • Proposing fewer standardized tests.
  • Judging schools on growth toward an annual performance target and on their progress in closing achievement gaps. Schools that fell below the 5th percentile on one of these indicators would be subject to school improvement which would be local and involve input from external school review teams.
  • Adopting the Teacher for Excellence for All Children legislation sponsored by U.S. Rep. George Miller (D-CA).
  • Establishing stricter entry standards and changes to the law’s current “highly-qualified” teacher designation.
  • Creating new requirements on teachers entering the profession through alternative routes.

The release of these recommendations by the NEA is likely to be one of many voices that will be heard in the coming months with regard to changes to the ESEA.