Senate Passes Financial Legislation That Will Benefit Students

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Yesterday, the U.S. Senate passed sweeping financial reform. The bill will lower the fees colleges pay when students use debit and credit cards and increase oversight of private student loans.

Restoring American Financial Stability Act of 2010 creates the Consumer Financial Protection Bureau in the Federal Reserve that will have authority over most consumer lending including private student loans. In addition, the bill creates an ombudsman position to oversee private student loans.

The bill also requires the Federal Reserve to set “reasonable and proportional” fees for transactions involving debit cards issued by banks with assets of more than $10 billion.  This will provide great benefit to campus bookstores nationwide.

The President is expected to sign the bill soon.

U.S. House Subcommittee Approves Education Appropriations Bill

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Yesterday, the U.S. House Appropriations Subcommittee on Labor, Health and Human Services, and Education approved a $176.4 million FY11 appropriations bill.

The bill provides $2 billion more for the U.S. Department of Education’s discretionary programs than was allocated in FY10, but $1.5 billion less than the Obama Administration requested.

In addition, the bill moves $5.7 billion for the Pell Grant shortfall, which would have been moved to the mandatory side of the budget under Obama’s budget, and counts it as part of Obama’s discretionary budget request.

No education amendments wer adopted in the subcommittee.

The next step for the appropriations bill is the full House Appropriations Committee. The full committee has not scheduled a time to work the bill to date. There is some speculation that a full committee work-up of the bill may not take place, which means Congress would have to pass a Continuing Resolution in order to provide FY11 funding for U.S. Department of Education programs.

Governors Budget Task Force Hits the Road

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In June Governor Gregoire announced a new state budget process for the 2011-13 biennium. Her intention is to develop a new biennial budget with more transparency, community involvement, and expert outside advice.

As a part of this process the Task Force will hit the road to hold several public hearings this summer across the state.  The focus of the hearings will be to share the budget decisions facing Washington and the resources that will be available for the budget.

In addition, the hearings will provide an opportunity for the public to share their ideas and thoughts about what services the government should and should not deliver.

To date four public hearings have been scheduled.

July 19 – Tacoma – 7:00-9:00 p.m.
University of Washington – Tacoma, Phillip Hall, Milgard Assembly Room, 1900 Commerce St.

July 21 – Everett – 7:00-9:00 p.m.
Everett Community College, Parks Building, Multi-Purpose Room, 2000 Tower St.

July 27 – Vancouver – 7:00-9:00 p.m
WSU-Vancouver, Admin Bldg., Room 110, 14204 NE Salmon Creek Avenue

July 29 – Spokane – Time TBA
Spokane City Hall, City Council Chambers, 808 W Spokane Falls Blvd.

Governors Budget Task Force Named

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In June Governor Gregoire announced a new state budget process for the 2011-13 biennium. Her intention is to develop a new biennial budget with more transparency, community involvement, and expert outside advice.

As a part of this effort Governor has asked leaders from across the state in a variety of fields to serve on the Governor’s Committee on Transforming Washington’s Budget. This panel will serve in an advisory capacity to the Governor during the budget development process. The charge of the committee is to quest budget assumptions, serve as a sounding board, and lend guidance.

The members of this Task Force include:

Patricia Akiyama, Director of External Affairs, Port of Seattle
Representative Gary Alexander, House Republican Caucus
Sandra O. Archibald, Dean, UW Daniel J. Evans School of Public Affairs
Rick S. Bender, President, Washington State Labor Council
Rodney L. Brown, Jr., President, Washington Environmental Council
Don C. Brunell, President, Association of Washington Business
Larry Cassidy, retired business owner and former member of NW Power and Conserv. Council
Brian Cladoosby, Chairman, Swinomish Indian Tribal Community
Richard Davis, Coordinator, WashACE (Washington Alliance for a Competitive Economy)Commissioner Mike Doherty, Chairman, Board of Clallam County Commissioners
Senator Karen Fraser, Senate Democratic Caucus
Carver Gayton, Emeritus and founding Executive Director of Northwest African American Museum and former Commissioner of Washington State Employment Security Department
Dr. Deborah J. Harper, President, Washington State Medical Association
Deborah Heart, President-Elect, Washington State School Directors Association
Dr. Thelma A. Jackson, Owner/President of Foresight Consultants and former school board member
Eric Johnson, Executive Director, Washington State Association of Counties
Eric D. Johnson, Executive Director, Washington Public Ports Association
Mary Lindquist, President, Washington Education Association
Representative Kelli Linville, House Democratic Caucus
Mike McCarty, Chief Executive Officer, Association of Washington Cities
Jason Mercier, Director, Center for Government Reform, Washington Policy Center
Stephen F. Mullin, President, Washington Roundtable
Fred A. Olson, former Deputy Chief of Staff to the Governor
Chief Don Pierce, Executive Director, Washington Association of Sheriffs and Police Chiefs
Stephen Reynolds, Chairman, President, and CEO, Puget Sound Energy
David Rolf, President, SEIU Healthcare 775NW
Orin Smith, former Chief Financial Officer of Starbucks and former director of Office of Financial Management
Lyn Tangen, Senior Director of Corporate Communications, Vulcan
Suzanne Petersen Tanneberg, Vice President of External Affairs and Guest Services, Children’s Hospital
Melinda Travis, Spokane community leader
Remy Trupin, Executive Director, Washington State Budget and Policy Center
Marilyn Watkins, Policy Director, Economic Opportunity Institute
Senator Joe Zarelli, Senate Republican Caucus
David A. Zeeck, President and Publisher, The News Tribune
Cristobal Guillen, President/CEO, Association of Washington State Hispanic Chambers of Commerce

State Budget Deficits a Growing National Problem for Higher Ed

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A recent report by the National Conference of State Legislatures (NCSL) and a smattering of national press outlets are calling attention to the dilemma presented by American Recovery and Reinvestment Act (ARRA) funds in higher education. Without these 11th-hour rescue funds from the federal government, many state legislatures would have had to have cut more deeply into higher education funding. With ARRA funds quickly running out and a difficult election year ahead for Congress, it is unlikely that federal support for higher education can continue.

The NCSL report highlighted the often drastic decrease from Fiscal Year (FY) 2009 to FY 2010 among states’ funding of higher education, even with ARRA funding included. Washington, for example, increased appropriations for higher education by 0.5% in FY 2009, but decreased overall funding by 7.6% in FY 2010. Without the ARRA funding, Washington higher education cuts would have equaled 12.1%.  Even with the federal requirement that states keep higher education funding at or above 2006 levels in order to qualify for help, the effect of the recession on institutions was grim.

Because of its unique relationship with state legislatures, public higher education has historically experienced amplified results of economic conditions. When state revenues are robust, leaders often invest heavily in higher education. Conversely, when budget deficits strike, public higher education is seen as having in tuition what no other state agency has – its own revenue stream. Called upon in times of hardship to increase tuition in a bid to make up for lost revenues, higher education administrators have, according to U.S. News and World Report, “little choice but to impose hefty tuition increases or reduce the number of classes and services offered on campus.” So far, administrators during this recession have opted for the former, keeping academic services in tact while calling on students and families to begin shouldering the majority of their public educational costs. With national per-student funding stagnated at a low of $6,928 (the lowest in constant dollars since FY 1980), the concept of a “public” education is quickly fading along with state revenues.

With most public colleges in the nation forecasted to face further hardships during the upcoming fiscal year, it is likely that tuition increases, faculty and staff layoffs, and decreasing enrollments will characterize the next chapter in public higher education. Any potential recourse must be tempered with less ambitious sentiments than those heralded by President Obama, who set a goal of having the world’s highest proportion of college graduates. According to Jim Palmer, the editor of Grapevine quoted in a recent USA Today story on the subject, “Our aspirations for higher education have outpaced our funding systems.”

Congress Takes Action on FY11 Budget

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The U.S. House Appropriations Commitee’s Labor, Health, and Human Services and Education Subcommittee is expected to begin work on the FY11 Labor, Health and Human Services, and Education Appropriations bill on Thursday.

This appropriations bill will set FY11 spending levels for the U.S. Department of Education programs, including the federal student aid programs.

In addition, the bills will provide a first glance at the difference between Congress and the Administration with regard to education, health, and human service spending. In February the Obama Administration released its FY11 request which asked to increase discretionary education spending by $4.5 billion to $50.7 billion. In addition, the Administratin proposed making the Pell Grants an entitlement program by funding it entirely with mandatory funds and increasing the maximum Pell Grant award by $160 to $5,710.

Though it is positive that action on the education appropriations bill will likely take place this week it is a first step among many. Only six of the twelve subcommittees have reported their FY11 spending bills to the full House Appropriations Committee. The Appropriations Committee has not yet scheduled time to work on the bills.

Furthermore, the Senate’s Labor, Health and Human Services, and Education Appropriations Subcommittee has not begun work on its version of the bill.

If the House and Senate are unable to pass FY11 appropraitons bill, a Continuing Resolution will need to be passed to continue funding for federal programs.

NGA Announces Plans to Create Common Measures for College Completion

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This week, the new chairman of the National Governor’s Association (NGA), Joe Manchin III, Governor of West Virginia, announced a plan to create a common set of measures to monitor progress and compare states.

The report, Complete to Compete: Common College Completion Metrics recommends the common higher education measures that all states should collect and report publicly.

According to the NGA website:

Comparable, reliable metrics are essential for states under current fiscal constraints. Information on the progress toward, and degree completion of, all students in higher education allows state leaders to gauge whether policies are successful and helps inform future funding decisions. NGA convened a Work Group on Common College Completion Metrics to make recommendations on the common higher education measures that states should collect and report publicly.

The Work Group on Common College Completion Metrics, convened by the NGA, recommends four outcome metrics and six progressive metrics.

Outcome Metrics

  • Degrees and certificates awarded
  • Graduation rates
  • Transfer rates
  • Time and credits to degree

Progressive Metrics

  • Enrollment in remedial education
  • Success beyond remedial education
  • Success in first-year college courses
  • Credit accumulation
  • Retention rates
  • Course completion

Governor Manchin stated “we’re facing a generation of students that is projected to have lower educational attainment than their parents…an alarming stat”.

Manchin’s comment is well supported. The U.S. ranks 10th in the percentage of young adults with college degrees according to the Organisation for Economic Cooperation and Development. In addition, both the Obama Administration and other higher education focused organizations, such as the Lumina Foundation for Education, have both set laudable goals for increasing the portion of Americans with college degrees.

Federal Health Care and Education Reconciliationo Act Takes Effect

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On July 1, the federal Health Care and Education Reconciliation Act took effect.

As of this date several changes go into effect that will directly impact students and higher education institutions in the coming academic year and for many years to come.

  • The bank-based Federal Family Education Loan Act was eliminated and replaced with the Direct Loan Program for all federal student loans.
  • The maximum federal Pell Grant award for the 2010-11 academic year will increase to $5,550, an $800 increase since 2009. The increase is based on the cost savings provided by transitioning to the Direct Loan Program.
  • Pell Grant award increases are now tied to the Consumper Price Index (CPI).
  • Eligibility for the Income-Based Repayment Plan was expanded.
  • The interest rate on new subsidized student loans fell from 5.6% to 4.5%

Low-Income Students Underrepresented Among Undergraduates

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According to 2004 data analyzed recently in a Wall Street Journal blog, enrollment in four-year colleges by low- to moderate-income students decreased drastically in the years since 1994. The average cost of attendance remained the same proportion of annual income, representing about 48% of low-income families’ annual income, while moderate-income families’ burden was reduced from 26% to 22% during the same time period.

In addition, persistence in four-year institutions decreased to 75% for those beginning in 2003, down from 78% in 1995. The implications are made more serious by the economic climate in which college students find themselves at the completion of their studies – whether they graduate or not. With national unemployment rates highest among young people – even those with bachelor’s degrees – and more and more debt being taken on by students and families in order to cover rising educational costs, the attainment of higher education may be undermined by the financial crisis.

UW Names Interim President

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The University of Washington Board of Regents at a special public meeting yesterday voted to appoint Phyllis M. Wise, UW Provost and Executive Vice President, to serve as interim president of the University of Washington while the Regents conduct a search for a new president to replace Mark Emmert.

As provost, Wise is the University’s chief academic and chief budget officer, and the second-highest university administrator. She will be the first woman and the first Asian-American to serve as UW president.