New California Law Denies State Aid to Many For-Profits

Nearly half of the for-profit colleges in California are being kicked out of a state student aid program because of their default rates, The San Francisco Chronicle reported. Under a California law, those with three-year loan default rates of 24.6 percent or higher are barred from having their students receive Cal Grants. About 4,900 Cal Grant recipients were enrolled at this colleges when the law took effect in the fall. Those who had been previously enrolled were allowed a partial grant.


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University of Phoenix Releases Annual Academic Report

The University of Phoenix on Thursday released its fourth annual academic scorecard, a self-assessment that has drawn both praise for being a rare voluntary disclosure about academic performance in the for-profit industry and criticism for painting a somewhat overly flattering picture. The fourth installment showed largely minor changes. Graduation rates for associate and graduate degree programs were up slightly, while those for bachelor's were down -- a change Phoenix officials attributed to an increase in transfer students arriving with zero credits. Senior students at Phoenix slightly underperformed academically compared with seniors at other institutions. But the university found high levels of student satisfaction, and an increase in first-course completion rates for students who went through the university's orientation, a free, three-week program.

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Senator Plans Bill to Limit Federal Funds at For-Profit Colleges

Senator Dick Durbin, an Illinois Democrat, is today planning to introduce legislation that would limit the federal funds going to for-profit colleges for the education of veterans, The Chicago Tribune reported. The legislation would reduce from 90 to 85 percent the share of revenue for-profit colleges can receive from federal student aid funds. Further, the bill would count veterans benefits in that total, not just Education Department aid, as is currently the law. Durbin is among a number of lawmakers who have said that some for-profit colleges are taking advantage of veterans, who have generous education benefits. Brian Moran, interim president of the Association of Private Sector Colleges and Universities, criticized the planned legislation. "Senator Durbin's reported legislation on recruiting will only cut off access for thousands of veterans to the skill-intensive, hands-on programming and intensive job-placement support that veterans transitioning into the workplace need," he said.

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For-profit-college group taps Steve Gunderson as next president

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For-profit-college group will name Steve Gunderson as its new president. The former Republican congressman has a reputation as a bridge-builder and strong ties to traditional higher education.

California Leads Nation in Unaccredited Colleges

California leads the nation in unaccredited colleges, The New York Times reported. Nearly 1,000 unaccredited or "questionably accredited" institutions operate in the state, frequently ignoring state regulations. "There are a lot of schools that beg the question 'What exactly is going on in California?' " Eyal Ben Cohen, managing director of Accredibase Limited, a company based in London that monitors diploma mills, told the Times. "California has very weak oversight procedures as far as allowing an institution to operate within its borders. An institution within California can obtain a license very easily."

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GOP Lawmakers Question Choice of Loan Negotiators

Representative John Kline, the Minnesota Republican who is chairman of the House Committee on Education and the Workforce, has asked Education Secretary Arne Duncan to explain the department's choice of negotiators for rule making panels this month on the federal student loan program. The department has said the negotiations, announced in October, will focus largely on technical issues. But the negotiators are also drawn from consumer protection groups, leading Kline and Representative Virginia Foxx, chairwoman of the higher education subcommittee, to ask for the department's rationale for why each constituency is relevant to the technical issues listed in the initial rule making notice, a list of all nominated negotiators, a description of the vetting process and the negotiators' credentials, as well as any new issues the department intends to address at the panel. "We are ... concerned about whether the panel represents the balanced perspective appropriate for any rule making process or is simply an attempt to raise new issues during the negotiation that furthers the policy goals of the administration," Kline and Foxx wrote. 

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U.S. Abandons Plan to Deduct Veterans' Debts from Payments to Colleges

The U.S. Department of Veterans Affairs on Thursday hastily withdrew a policy change that would have allowed the agency to deduct from its tuition payments to colleges any debts that student veterans owed the government from their Post-9/11 GI Bill benefits. The approach, which college officials had learned about this week via e-mail from a regional office of the veterans' agency, caused immediate consternation among campus veterans' education administrators and others, who feared they would then be put in the awkward position of becoming the government's debt collectors from their own students. "[T]he school will get shorted money and be expected to recoup it from the Veterans," one administrator wrote on a listserv for veterans' officials. "This is going to make the schools VERY mad."

A spokesman for the veterans' agency said in a statement late Thursday:  “System changes installed this week allowed for collection of Post-9/11 Bill debts from all education benefit payments issued to or on behalf of the student.  However, because these changes had not been fully vetted, they have been withdrawn effective today.”

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