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Quick Takes: Sallie Mae Explains Loan Changes, 2 Robert Morris Students Killed, Colby Replaces Loans With Grants, Growing Call for Science Debate, Refunds for U. of California Students, Key Senate Aide Departs

January 24, 2008
  • Sallie Mae officials said Wednesday that they would shy away from lending money to students at institutions with poor graduation rates to try to limit the lender's exposure to risky loans. In a conference call with reporters to release the company's 2007 financial results, which were not pretty, Albert Lord, its chairman, said that "Sallie Mae has lent too much money to students who have gone to schools without very good graduation records," suggesting that many of those loans had led to defaults. Several for-profit higher education companies said Tuesday that they had been told by Sallie Mae that their students would no longer receive loans from the company, and the policy announced by Sallie Mae Wednesday would be likely to affect historically black colleges and some other institutions, four-year private and two-year public, that enroll significant numbers of low-income students. Also Wednesday, Sallie Mae acknowledged in a filing with the Securities and Exchange Commission that the SEC had requested information about the company's actions regarding sale of stock by Lord and other Sallie Mae executives last month, The New York Times reported.
  • Two students at Robert Morris University, in Pennsylvania, were shot dead Tuesday and a third was injured in a shooting in apartment building where they lived. A suspect who is in custody is not a Robert Morris student.
  • Colby College is replacing loans with grants in all financial aid packages, beginning in the fall. The new policy will apply to both new and continuing students.
  • The American Association for the Advancement of Science has joined the movement to encourage the presidential candidates for 2008 to have a debate about science issues. The effort, started by prominent researchers, also now has backing from key members of Congress.
  • The California Supreme Court has refused to hear an appeal in a suit over tuition increases for some University of California students in 2003, clearing the way for students to receive refunds awarded by lower court rulings, The San Francisco Chronicle reported. The total could be $40 million, with some students receiving $10,000 or more.
  • U.S. Sen. Charles Grassley of Iowa, the leading Republican on the Senate Finance Committee, has made it a mission in recent years to question the behavior of colleges and other nonprofit groups on a variety of fronts -- how they compensate their presidents, run their athletics programs and, most recently, spend down (or, in some cases, don't spend down) their endowments. One of Grassley's staff members has been widely seen as the driving force behind his boss's mission -- and now that aide, Dean Zerbe, is leaving Capitol Hill, to become national managing director of AlliantGroup, which provides tax services to accounting firms, a spokeswoman for the Senate Finance Committee confirmed Wednesday. Sources familiar with the committee's work said they expected Grassley to replace Zerbe with another staffer charged with investigating the same issues, but some college lobbyists are quietly hoping that Zerbe's departure will quell the senator's ardor.
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