The Federal Reserve Board and Federal Deposit Insurance Corp. last month ordered Higher One to repay millions of dollars to students who had financial aid disbursement accounts with the company and to pay a $2.2 million fine for what the government agencies called deceptive practices. Higher One has been under increasing federal and state scrutiny in recent years for fees it charges to students and for how clearly it makes its fees and policies known to consumers, and the latest findings by the two federal agencies add to its woes.
Legislators in 10 states will announce today that they are introducing bills in their respective legislatures to create debt-free options in public higher education. The effort is part of a push by backers of the idea -- already endorsed by the major candidates for the Democratic presidential nomination -- to demonstrate the state-level interest that would be necessary. The plans of the Democratic candidates all call for state-federal partnerships. Among the states that will see bills are early caucus/primary states such as Iowa, New Hampshire and South Carolina.
Two-thirds of college freshmen who applied for federal student loans or grants last year indicated that they were applying to only one institution, according to new data released by the U.S. Department of Education on Thursday.
Sixty-eight percent of freshmen filling out the Free Application for Federal Student Aid during the 2014-15 academic year instructed the Education Department to send their information to only one college, the department said. That’s down from 80 percent in the 2008-09 school year.
The Obama administration called the new data “troubling.”
“By focusing on only one school, students run the risk of being turned down for admission or losing out on better financial aid and educational opportunities from another school, with ramifications that can last a lifetime,” Education Secretary Arne Duncan said in a statement.
The U.S. Department of Justice on Monday announced a $95.5 million settlement with the Education Management Corporation to resolve allegations that it defrauded the government. The Huffington Postreported on the settlement over the weekend.
The agreement ends a long-running lawsuit that accused the for-profit college chain of illegally paying bonuses to admissions recruiters based on the number of students they enrolled.
Those allegations were brought to light in a whistle-blower lawsuit by a former employee in 2007. The Justice Department, as well as another former employee, joined the suit in 2011.
The Education Management Corporation owns the Art Institutes, Argosy University, Brown Mackie Colleges and South University chains. The company was taken private last month amid falling enrollments and revenue.
Loretta Lynch, the U.S. Attorney General, called the settlement "historic," noting that the payment would be the largest false-claims payment by a for-profit institution in history. EDMC's actions were "were not just a betrayal of students' trust," Lynch said, "they were a violation of federal law."
Thursday was also the day for the Million Student March, which led to rallies at many campuses to call for free public higher education, the cancellation of current student debt and a $15 minimum wage.
Teaching assistants at the University of Wisconsin at Madison are planning to protest next week over a proposed restructuring of their working conditions and compensation. The students say they were not consulted, but rather learned of the plans to cap their maximum workload at 20 hours from emails directed to faculty members and administrators. The Teaching Assistants’ Association alleges the changes constitute a violation of the university’s promise to uphold its labor contract even after 2011 legislation pushed by Governor Scott Walker challenging public employee unions.
“The proposal to restructure graduate student worker pay is a nonstarter,” association leaders said in a statement. “University administrators' calls for more ‘flexibility’ and a reliance on ‘market forces’ will actually translate into fewer positions and workplace protections for graduate employees. This means that graduate students are going to lose their jobs, along with their paychecks and health insurance.”
John Lucas, a university spokesman, said the student association is wrong in asserting that the changes -- which don’t take effect until 2017 -- will have any impact on their take-home pay or benefits. Rather, he said, the university’s plans relate almost exclusively to a change in the administrative process by which the graduate research assistant stipends are set. “The change will have no impact on the take-home pay or benefits” for research assistants, he said. Lucas said the proposed 20-hour cap applies to international students and is designed to comply with federal requirements.