New Site on Higher Education Finance

Nate Johnson, a consultant and expert on higher education finance, has created a new website that seeks to spark a broader discussion about the sources of funding for higher education and their implications for low-income students.

The Bill & Melinda Gates Foundation supported the project, which is dubbed Understanding Higher Education Finance and features a briefing report. Johnson said the project covers the full range of financial sources that the nation's postsecondary system depends upon, including state appropriations, institutions themselves, students' parents and state and federal tax expenditures. "I'd like to have people think about it as more of an ecosystem," he said, rather than as discrete funding sources.

Competing priorities help shape much of higher education's revenue, according to the site.

"The result is a set of incentives and a competitive economic environment that makes it difficult for low-income students and the institutions that serve them to thrive," the report said.

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Birmingham-Southern Cuts Tuition in Half

Birmingham-Southern College is the latest college to roll out a tuition reset in recent weeks, announcing Tuesday that it will cut tuition and mandatory fees by more than half starting in the fall of 2018.

Starting next year, tuition will be $17,650, according to That’s down from $35,840 this academic year.

The college anticipates being able to grow beyond its current enrollment of 1,300 students after slashing tuition. It currently has capacity to grow to 1,600 students.

President Linda Flaherty-Goldsmith said that the college has heard from students and families that high published prices are a barrier. The college will still award need-based and non-need-based financial aid, although its financial aid amounts will be reduced by the tuition cut. Students are expected to pay a net cost similar to what they pay today. More than 90 percent of students do not pay the college’s published price.

Birmingham-Southern joins colleges like Sweet Briar College in Virginia and Drew University in New Jersey in announcing tuition resets for next year. But even compared to those institutions, its expected cut is steep. Sweet Briar will cut its sticker price by about a third, and Drew will cut its by 20 percent.

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Iowa State Business School Gets $50 Million Gift

Iowa State University on Monday announced a gift of $50 million to its business school, which will be renamed the Debbie and Jerry Ivy College of Business. Jerry Ivy, who earned a bachelor's degree from Iowa State in 1953, is currently president and CEO of Auto-Chlor System.

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Senate Bill Includes Restoration of Pell for Defrauded Borrowers

A Senate appropriations package approved last week would restore Pell Grant eligibility for defrauded borrowers, among other boosts to financial aid and college readiness programs.

The appropriations committee voted last week to approve the bill, which most notably boosted the maximum value of the Pell Grant to $6,020. It also restores Pell eligibility to student borrowers who were defrauded or misled by their institution and were approved to have their student loan cleared through a borrower defense claim. 

"While I believe we need to do more to strengthen our investments in Pell Grants and financial aid, I’m pleased this budget builds on the reinstatement of year-round Pell Grants earlier this year by increasing the maximum Pell Grant and restoring eligibility for students defrauded by predatory colleges," said Sen. Patty Murray, the ranking Democrat on the Senate education committee. "Too many defrauded students were left with a mountain of debt and no degree to show for it, so I’m proud we are taking this step in the right direction to give these students a second chance.”

The appropriations package also included language asking for updated guidance from the Department of Education on the Public Service Loan Forgiveness program; restores funding for a program supporting child care on college campuses; and maintains or slightly boosts funding for several financial aid and college readiness programs targeted for cuts in the White House budget.

Less popular among some higher ed observers was language directing the secretary of education to provide flexibility to colleges with poor cohort default rates on student loans. And the bill doubles the amount of time for institutions formerly accredited through the Accrediting Council for Independent Colleges and Schools to find a new accreditor. 

The spending package, which differs from a spending bill approved by the House, awaits a vote by the full Senate. 

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Buffalo Administrators Plead Guilty to Larceny

Two former administrators pleaded guilty Thursday to stealing large sums of money from the University at Buffalo, with a longtime vice president pleading guilty to taking $320,000 from a university-related account and spending on personal expenses like concert tickets.

Dennis R. Black, a prominent University at Buffalo vice president who resigned last year, pleaded guilty in New York State Supreme Court to felony charges, The Buffalo News reported. He faces a maximum of five to 15 years in prison for a second-degree grand larceny charge and between 16 months and four years on a charge of first-degree filing of a false instrument.

He reportedly spent stolen funds on expenses like tickets to see James Taylor and Liza Minnelli, to New York Yankees games and Broadway shows, and travel with his wife and his son’s wedding. He also allegedly spent on a private club membership and university staff parties at a minor-league baseball team’s games.

Black will repay the $320,000 to the university in restitution and $22,238 in state taxes. He admitted to filing a false personal tax return for 2014, according to The Buffalo News.

Black earned a salary of $287,385 in 2015 from the University at Buffalo, a public research university in the State University of New York System. He had previously denied deliberate misuse of university money. The Buffalo News reported last year that he was under investigation by state and local officials for questionable expenditures at the university, including using university funds to make charitable gifts in his name and to pay for his wife’s travel expenses. The investigation reportedly focused on expenditures connected to a $40 million university-affiliated nonprofit organization.

Another former university administrator, its onetime director of campus living, Andrea Costantino, pleaded guilty Thursday to fourth-degree grand larceny. She admitted to stealing $14,664 from the university and will pay the sum back as restitution. Costantino resigned from the university in August after two decades there. Her annual salary was $123,542.

Black is scheduled to be sentenced Jan. 10. Costantino is scheduled to be sentenced Dec. 6.

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IBM Will Invest $240 Million on Joint Lab With MIT

IBM and the Massachusetts Institute of Technology announced Thursday that the company would spend $240 million on a joint lab with MIT focused on artificial intelligence. "The collaboration aims to advance AI hardware, software, and algorithms related to deep learning and other areas; increase AI’s impact on industries, such as health care and cybersecurity; and explore the economic and ethical implications of AI on society," said the announcement.

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Professor Owes Mizzou $600K in Intellectual Property Case

Galen Suppes, a former professor of chemical engineering at the University of Missouri at Columbia, must pay the institution $600,000 in damages, a jury decided this week, according to the Missourian. In an intellectual property lawsuit involving technology that converts glycerin to acetal, propylene glycol and antifreeze, the university system’s Board of Curators accused Suppes of violating his contract and financially competing against Mizzou in denying it property rights to inventions developed within the scope of his employment. 

The board argued that it lost $3.7 million over the disputed technology, while Suppes argued there was no proof of that claim and that both he and the university owned his technology. The jury voted 10-2 that Suppes breached his contract and was competing against it, but it rejected a third claim that Suppes had interfered in business relationships between the university and other parties. 

Suppes was fired from the university in 2016, according to the university, after 12-member faculty panel recommended termination.Mizzou “will continue to protect its intellectual rights, as well as those of the faculty and taxpayers,” it said in a statement. “Protecting and commercializing the intellectual property created by university researchers is pivotal to the growth and strength of our research and economic development programs.”

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Professor Owes Mizzou $600K in Intellectual Property Case

Senate Bill Boosts Maximum Pell Grant

The Senate appropriations committee will consider Thursday a spending package that boosts the maximum value of the Pell Grant by 1.7 percent, using funds from the program’s reserves.

The spending package -- part of a bill funding the Departments of Labor, Health and Human Services, and Education, and related agencies -- also holds steady current funding for the Federal Work-Study program and the Supplemental Educational Opportunity Grants.

Lawmakers also used the spending package to ensure Education Secretary Betsy DeVos doesn’t reconsider a plan to award handling of federal student loans to a single servicer -- a proposal that the department abandoned after getting pushback from state-based servicers as well as Democratic and Republican elected officials.

The $68.3 billion in discretionary funding for the Department of Education is $29 million above fiscal year 2017 levels.

Bumping up the Pell Grant increases its maximum value by $100, to $6,020. That would mean Congress and the administration would avoid letting the grant go without an annual increase for the first time since fiscal year 2007. That automatic increase was set to expire after the 2017-18 aid cycle.

The Institute for College Access and Success, which advocates for expanded access to student aid, praised lawmakers for the increasing the grant’s value while noting that the spending bill took about $2.6 billion from Pell Grant reserves.

"While we are very disappointed and concerned to see an additional $2.6 billion cut to Pell Grants in this bill, we praise both Senator [Roy] Blunt [of Missouri] and Senator [Patty] Murray [of Washington] for committing to work to reduce it through an ultimate congressional [fiscal year 2018] spending agreement that increases overall discretionary funding levels."

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Sweet Briar Will Reset Tuition

Sweet Briar College will cut its sticker price by about a third next year, it said Wednesday in an announcement that also detailed a series of planned curricular changes.

The small private women’s college in rural Virginia will drop its sticker price for tuition, room, board and fees by 32 percent to $34,000 for the 2018-19 academic year. Both new and returning students will be covered by the change.

Next year’s price cut is a tuition reset strategy, a strategy which has been drawing interest at many private colleges and universities recently. Tuition resets have been pitched as a way to counter the rise of tuition discounting -- the near-ubiquitous practice of institutions regularly raising their sticker prices but also offsetting their price hikes by offering increasing amounts of financial aid. In theory, tuition resets can attract more students by grabbing attention or by convincing students that they can pay for colleges that previously seemed too expensive. But resets’ chances of success remain controversial.

Sweet Briar will be resetting tuition just three years after it nearly closed. Its former board announced plans in March of 2015 to shut down the college at the end of that academic year despite the fact it had a considerable endowment, pointing to a rising tuition discount rate, poor admissions trends and the challenge of recruiting students to women’s colleges. Alumnae fought the closure and won a court battle to keep the college open under new leadership.

Currently, Sweet Briar’s tuition discount rate fluctuates between 65 percent and 68 percent, according to its president, Meredith Woo. After the tuition reset, its discount rate is expected to drop below 40 percent.

“It opens us up in a transparent, honest and simple way to families that really want to understand what’s available for their children,” Woo said. “We also want to make it very clear that at that rate, we are actually competitive price-wise with flagship public universities.”

The University of Virginia estimates a yearly cost of attendance of over $31,000 for new in-state students in its College of Arts and Sciences, before financial aid. It estimates roughly $62,000 to $63,000 for out-of-state residents.

Sweet Briar will also be rolling out substantial curricular changes next year. The college is revising its core curriculum around women’s leadership and reorganizing its academic departments into three interdisciplinary centers. It is also changing from 15-week semesters to a 3-12-12-3-week schedule. The new schedule’s short terms will allow for research, internship and study abroad.

Woo had written about some of the curricular changes at the end of August in a letter that also said Sweet Briar enrolled a new class of 95 students this year. But the college’s announcement Wednesday included new details, including that every undergraduate student will be eligible to receive up to $2,000 to fund experiential learning.

The near-simultaneous announcement of the tuition reset and curricular revamp come amid a period of change for the rebooted Sweet Briar. Woo started as president in May, taking over for the retiring Phillip C. Stone, who was brought in to lead the college after alumnae stopped its closure.

“We studied it very carefully,” Woo said of timing the tuition reset announcement. “We discussed it with the Board of Directors very intensely and we decided that the right time to do it is when we are coming up with new academic ideas.”

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White House Delays HBCU Conference

The White House said Friday it would delay an annual conference for historically black colleges and universities that had been scheduled for mid-September.

Congressional Democrats and multiple organizations representing HBCUs have called in recent weeks for the event to be delayed until after the White House names the executive director of its HBCU Initiative. They also called for more action related to Trump's March executive order on historically black colleges, such as "developing a meaningful plan of action with concrete commitments to invest in and advance HBCUs," as the United Negro College Fund said in its letter to the administration.

While the conference is postponed, the White House said it would instead meet with a small number of HBCU leaders and students on strategic issues.

Johnny C. Taylor Jr., president and CEO of the Thurgood Marshall College Foundation, praised the decision to postpone the event.

"TMCF will continue our substantive and positive working relationship with the entire Trump administration," he said.

Omarosa Manigault-Newman, director of communications for the White House Office of Public Liaison, had insisted in response to calls for a delay last month that the conference would go ahead as planned. She also promised that the White House would name an executive director for the HBCU Initiative as well as members of a board of advisers.

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White House Delays HBCU Conference


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