Financial aid

Problems plague Education Department debt management process

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Problems with direct loan servicing have left borrowers trying to rehabilitate their loans in default for months and cost the government millions of dollars.

Rule making on teacher preparation programs fails to reach consensus

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After a panel fails to reach consensus, the U.S. Education Department will have a free hand in writing regulations that affect whether students in teacher preparation programs can receive some forms of financial aid.

Company hopes to get alumni to provide private loans to students

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A company out of Stanford's business school hopes to transform the loan market by getting alumni to invest in students.

Higher education proposals in 2013 Republican budget

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A proposal announced Tuesday would cut Pell Grants and make student loans appear more costly on federal balance sheets.

Essay argues against bill to overturn U.S. rules on higher ed oversight

America’s leadership in the global economy depends on a highly skilled, highly educated workforce. That’s why taxpayers support aid for higher education. But taxpayers rightly demand that their dollars be spent only on bona fide educational programs, and students deserve the opportunity to be educated, not just enrolled.

The Department of Education has a fundamental responsibility to taxpayers and students to make sure aid dollars are spent appropriately. Therefore, I and many of my colleagues have deep concerns about legislation passed last month in the House of Representatives that would limit effective oversight of the nearly $200 billion in student financial aid granted or guaranteed each academic year by the federal government.

Known as the “Protecting Academic Freedom in Higher Education Act” (H.R. 2117), the bill takes aim at the federal minimum standard for a “credit hour,” the basic unit for evaluating instructional programs. This bill would not only repeal the current regulations on what constitutes a credit hour, which are eminently reasonable, but also prohibit the Secretary of Education from ever promulgating a regulation in the future.

I am also concerned by the bill's repeal of the Department of Education's state authorization regulations, including vital consumer protections. The federal government has always required that colleges and universities be authorized by their states in order to receive federal aid funds, and current regulations stipulate that States must have a process in place to evaluate student complaints. Both of these common-sense requirements would be repealed by the bill.

Under the bill, for example, my home state of New York would have no recourse if a university based in a state with less stringent quality and curriculum requirements began operating a distance learning program that enrolled New York students.  In short, the bill would make it impossible for states to guarantee the quality of programs operating inside their borders.

Federal regulations define an academic year as consisting of 24 to 36 credit hours and mandate that a student must carry at least 6 credit hours to be minimally eligible for financial aid. So if this bill became law, the government would determine eligibility for financial aid using a unit that is completely and permanently undefined. That situation is not only nonsensical, it also represents a threat to the government’s ability to police institutional fraud in the higher education industry.
 
Two years ago, the Department of Education's inspector general found that some colleges were awarding students more credits than they had actually earned, which allowed the institutions to collect more financial aid than they deserved. In response, the Department of Education formulated a reasonable minimum standard for the credit hour based on the so-called “Carnegie Definition” of instructional units, which has been widely used for decades. The federal regulation is also virtually identical to a regulation in place in New York State since 1976.
 
The regulation defines a credit hour as the amount of work represented in intended learning outcomes and verified by evidence of student achievement that is an institutionally established equivalency reasonably approximating not less than one hour of classroom instruction for 15 weeks per credit hour. The regulation’s use of the phrase “institutionally established equivalency” places the responsibility for determining what a credit hour is, within the context of a broad federal framework, where it belongs — with the faculty and with the accreditor of that particular institution.
 
I am very familiar with New York’s regulation, as I administered a college in Long Island for many years before I was elected to Congress.

Our cost of compliance with the credit-hour regulation was exactly zero, and we were able to create innovative programs including a semester at sea, cooperative education, internships, and courses that met in compacted time formats for 4 and 5 weeks -- all because we established an institutional equivalency that was sanctioned by our faculty, our accreditors, and -- for that matter -- the regulators in the State of New York.
 
The contention that this regulation stifles academic freedom and innovation is disproved by the record of New York’s internationally prominent colleges and universities over the past 35 years. The argument that it adds to the length of time students must spend in their degree program is simply not true.
 
What the regulation actually does is protect students and taxpayers from bad actors in the higher education industry who seek to profit from federal student aid funding while providing a substandard education to students. Furthermore, the permanent prohibition on regulating credit hours is effectively an invitation to future waste, fraud and abuse in aid programs.

The explosive growth in recent years of for-profit colleges, distance and online learning programs, and other nontraditional means of providing instruction educational services demand stronger oversight, not weaker. I am hopeful the Senate will reject this bill.

U.S. Rep. Tim Bishop is a Democrat of New York.

For-profits that receive federal aid charge more, study finds

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For-profit colleges that participate in federal financial aid programs charge more than those that don't, according to new study, which also finds the for-profit sector much larger than most think.

Congress, Duncan focus on rising college prices

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A Congressional subcommittee and Education Secretary Arne Duncan are both taking steps to address rising tuition costs.

Private Colleges Embrace Student Loan Reimbursement Program

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A few small private colleges are following the lead of law schools, using a loan repayment program to help students perform service work immediately after graduation.

Education Department enforced distance education rule before it was published

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A group of associations has charged the Education Department with asking colleges to comply with a new rule before it was ever published.

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