Advocacy groups, including Campus Progress, US PIRG, Rebuild the Dream and other student groups, delivered 130,000 letters from students to Congress on Wednesday, asking the lawmakers to stop the interest rate on subsidized student loans from doubling to 6.8 percent in July. President Obama has urged Congress to stop the rate increase, and Congressional Democrats have called for the change as well. Keeping the interest rate for subsidized loans at 3.4 percent would cost about $5 billion.
The Education Department will track the number of students completing the Free Application for Federal Student Aid and release the data to the public, sorted by high school, the department announced Tuesday. The website, which lists the number of students per high school who have completed and submitted the form, is intended to help high school counselors (and others) and uses data from the Education Department's systems, the first time such data has been made available. The numbers will be updated every two weeks.
Another group of college presidents and chancellors has been invited to the White House for a meeting on college affordability and productivity. Details about the meeting, scheduled for March 23, are scant, including whether President Obama will attend (as he did when another group of college presidents was invited to White House in December).
According to an email forwarded to Inside Higher Ed by a person connected to an invited guest, "administration officials will engage presidents and chancellors in exploring constructive solutions to bringing down college costs, making higher education more affordable and attainable, and regaining America’s global leadership in higher education attainment."
A panel of state legislators in California on Thursday rejected a proposal by Gov. Jerry Brown to reduce spending on CalGrants, the state's generous financial aid program, theLos Angeles Times reported. Brown's plan would have reduced the amount of state aid that could be used at private and for-profit colleges, and also raised the minimum grade-point average for incoming students to qualify for grants.
The outstanding balance on student loans has now hit $870 billion, more than the total credit card balance ($693 billion) and the total car loan balance ($730 billion), according to a report released Monday by the Federal Reserve Bank of New York. The rise in student loan debt is hardly a new trend, but the report documents the extent of the debt and the impact it has not only on borrowers, but their families. The report notes that "unlike other types of household debt such as credit cards and auto loans, the student loan market is incredibly complex. Numerous players and institutions hold stakes at each level of the market, including federal and state governments, colleges and universities, financial institutions, students and their families, and numerous servicers and guarantee facilitators."
The Consumer Financial Protection Bureau began accepting complaints about private student loans Monday, a first step the agency is taking in regulating the private student lending market. The bureau is the sole agency regulating complaints about these loans, and is also preparing a report on the private lending market based on interviews with students, parents, college administrators and others, to be presented to Congress this summer. Before the agency, borrowers with complaints about their loans had to find a bank's regulator in order to lodge a complaint, which was effectively impossible, Rohit Chopra, the bureau's student loan ombudsman, said at a National Association of Student Financial Aid Administrators forum on Monday.
The bureau is also investigating why students borrow the way they do -- including why they don't max out federal loan limits before turning to credit cards, second mortgages and other financial instruments, Chopra said.
Is Harvard University less expensive than public universities in California? A Bay Area News Group article explores the question, using a hypothetical family of four with $130,000 in family income. With Harvard's generous financial aid for middle class families, such a family would pay only $17,000 for a student to spend a year at Harvard. At Cal State, with much lower tuition rates, but much less aid, an in-state resident would pay about $24,000. Many students say these figures illustrate the flaws of California's policy of increasing tuition rates without sufficient financial aid.
The state auditor's office in Texas has found numerous instances of public colleges and universities failing to follow federal rules for managing student aid, The Dallas Morning News reported. Ten institutions were found to be making incorrect calculations of the cost of attendance. Several institutions were found to award too much aid, or to fail to adequately monitor students' academic progress.
The U.S. Justice Department announced Tuesday that the government would join a lawsuit in which former employees of American Commercial College, Inc., allege that the for-profit college chain falsely asserted its compliance with federal requirements that it derive at least 10 percent of its revenues from sources other than federal student aid. The class action was brought under the federal False Claims Act, which allows individuals to bring lawsuits on behalf of the federal government, claiming that the defendants have defrauded the treasury of funds and hoping to be joined by the U.S. Justice Department. The plaintiff shares in any financial penalties, which can include trebled damages.
For-profit higher education providers have been a target of numerous False Claims Act lawsuits, and the federal government has joined several of them, including a high-profile case involving Education Management Corp. Some have speculated that the Obama administration -- which has toughened its oversight of the career college sector through regulation -- is increasingly turning to the courts to do so as well.
In announcing Tuesday's intervention, Tony West, assistant attorney general of the Justice Department’s civil division, said: “Colleges and universities that receive federal funds must be honest with the government and follow the law.... We will use the False Claims Act and other tools to protect students and taxpayers from for-profit institutions that fail to measure up to that standard.”
While the bill might be able to attract enough Democratic support in the Senate to become law, the Obama administration has said it strongly opposes any attempt to repeal the regulations, and the chairman of the Senate Committee on Health, Education, Labor and Pensions has waged a high-profile fight against for-profit colleges. The state authorization and credit hour rules apply to nonprofit, public and for-profit institutions, but Democrats who voted against the measure characterized it as an effort to erode consumer protections.