Academics Not Sole Focus of ESEA Renewal

Posted on by

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.

Prepaid Tuition Unit Price Increases in Washington

Posted on by

Early this week the Guaranteed Education Tuition (GET) committee met to deter unit costs of Washington’s prepaid tuition program.

As of May 1, the price of one GET unit will increase from $101 to $117. 

The Committee is increasing the unit price beyond the 14 percent Washington universities and colleges are expected to raise tuition to reflect future investment and tuition expectations.

In addition, the Committee also recognized that enrollment this academic year (09-10) is the second largest in the program’s 12 year history and investment returns have picked up during the last quarter.

National Debate on Higher Education Deems Current Model Broken

Posted on by

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.

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

Posted on by

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.

Governor Partially Vetoes Furlough Legislation

Posted on by

On April 27 Governor Gregoire signed a partially vetoed Senate Bill 6503 – the “furlough” bill. 

Senate Bill 6503 requires agencies to cut the state payroll by $49 million. The final bill directs that savings will be generated at state agencies and institutions of higher education through either 10 temporary agency closure days or alternate-approved compensation reduction plans. This was one of the largest single cuts amid $755 million in reductions in the balanced budget solution the Legislature approved April 12 before adjourning its special session.

Gregoire vetoed section two of the bill, which directed $10 million of the savings to come from exempt employees and Washington Management Service workers, who comprise less than 5 percent of all state workers. Without it, management level employees will be subjected to the same levels of furloughs as other employees.

“A cut of this size, over such a small base, is too large to be practical,” Gregoire said in her veto message. She also expressed her preference that the $49 million in savings come from actual furloughs rather than other actions allowed under the bill.

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

Posted on by

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.

Governor Gregoire Signs Revenue Legislation Into Law

Posted on by

On Friday, Governor Gregoire signed the two-bill revenue package passed by the Legislature earlier this month without veto.

Both bills are expected to generate $757 million in revenue through 2013. Senate Bill 6143 modified excise tax laws to preserve funding for public schools, colleges and universities, as well as other public systems essential for the safety, health, and security of Washington.

House Bill 2493 increased taxes on cigarettes and other tobacco products.

Senate Committee Takes Action on FY11 Budget Resolution

Posted on by

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

Posted on by

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.