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Civil liberties and consumer groups sue Education Department for debt collection records

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Federal lawsuit seeks to force the Education Department to provide information about its debt collection practices, including their impact on minority borrowers.

Essay on value of states banding together for stronger, more clear regulation of online education

A coalition of consumer groups, legal aid organizations and unions object to the state of New York joining an agreement that would change how colleges offering distance education courses in the state would be regulated. As coalition members asserted in an Inside Higher Ed article, the state would be ceding its authority to other states. Students would be left with no protection from predatory colleges, and it would make it easier for “bad actors to take advantage of students and harder for states to crack down on them.”

That all sounds ominous. It would be, if it were true.

Even in the digital era, the regulation of educational institutions is left to each state. The resulting array of requirements confuses both students and institutional faculty and staff. The State Authorization Reciprocity Agreement (SARA) was created to apply consistent review standards across the states. An institution approved in its home state is eligible to enroll students (within limits) in any other SARA member state. As of this writing, 36 states have joined in a little over two years. That number may approach 45 by the end of 2016.

SARA means now there is a consistently applied set of regulations over distance education when students from one state take courses from an institution in another SARA state. Chief critic Robert Shireman, a senior fellow at the Century Foundation and former official at the U.S. Department of Education, cites Iowa as proof that “some states have discovered they can’t add more qualifications,” as if that were a surprise. Reciprocity agreements depend upon consistency. If Iowa wishes to change a policy, there is a process for regulators in the state to suggest a change. States enter into the agreement openly knowing that consistency is a requirement.

Currently, many states -- notably including New York -- have no regulations in place to protect their in-state students who enroll in courses from many out-of-state colleges. SARA’s critics depict New York as “a national leader in protecting its citizens from unfair business practices.” If a college has no other physical presence in New York other than enrolling students in an online course, it is not regulated and those students are not protected. The state has not allocated any funds to regulate the estimated hundreds of colleges from throughout the country currently serving online students in the state. Asking each state to regulate the institutions headquartered in their state regardless of where they serve students is a much more reasonable solution. Put another way, SARA increases the amount of regulatory oversight of distance education, but does it in a manner more relevant to today’s economy.

To be fair, New York has been aggressive in pursuing bad actors in the for-profit education sector, as evidenced by its $10.25 million settlement with Career Education Corporation. It is worth noting, however, that the lawsuit was largely based on brick-and-mortar schools that have nothing to do with SARA. In addition, this action was brought by the New York attorney general’s office and was not the result of education-based regulation. There is a relevant section in the SARA policy stating that nothing precludes “a state from using its laws of general application to pursue action against an institution that violates those laws” and another stating that “nothing precludes the state in which the complaining person is located from also working to resolve the complaint.”

The reality of SARA hardly qualifies as “ceding the ability to guard its citizens against abusive practices,” as a Century Foundation letter objecting to New York signing the SARA agreement claims.

What would be lost if New York were not to sign the SARA agreement? There is certainly a downside for institutions offering distance education courses and programs for out-of-state students. It might surprise readers of the letter, but fully 70 percent of students who take all of their courses at a distance do so from public and nonprofit institutions. Institutions like Empire State College, a longtime leader in distance education that is part of the SUNY system. Furthermore, the large for-profit institutions referenced in the article have the budget and history of obtaining state-by-state approval already. It is the smaller-profile nonprofits that have the most difficulty in obtaining authorization to serve students in different states.

A reciprocity agreement between Massachusetts and Connecticut is cited as an alternative. As best we can tell, it allows each state to continue using its own current regulations. This is not reciprocity and does not improve the consumer protection landscape for students or institutions.

Were New York to avoid signing the agreement, students who live in the state would end up with fewer choices, primarily from fewer nonprofit institutions that can operate there. Under SARA, New York students actually would have more consumer protection than currently exists as well as regulatory support for any complaint process, including from in-state agencies. Additionally, states systematically working in concert through SARA will more quickly find and deal with institutions that treat students poorly. This is far better than hypothetical, unfunded regulatory oversight by New York trying to operate independently from any other state.

New York has the opportunity to sign an agreement that would expand the regulatory oversight of distance education programs, would leave the state with the same ability to go after bad actors as they have done in the past and would increase choices for resident students -- particularly working adults -- seeking to get a valuable degree that is only enabled by distance education. It would be a mistake to let a complaint based on hypotheticals and misrepresentations of reality derail this progress.

Phil Hill is co-publisher of the e-Literate blog, co-producer of e-Literate TV and partner at MindWires Consulting. Russ Poulin is director of policy and analysis at WCET (WICHE Cooperative for Educational Technologies), which is a division of the Western Interstate Commission for Higher Education.

Obama Administration Names Key Higher Ed Official

The U.S. Department of Education announced Monday that Kim Hunter Reed (right), a former Louisiana higher education official, has joined the Obama administration as a deputy under secretary of education.

Reed will be part of the senior leadership of the team overseeing higher education issues at the department. She replaces Jamienne Studley, who stepped down late last year.

Most recently, Reed worked on state higher education policy issues as a principal at HCM Strategists, which included work with the Lumina Foundation. Previously she held various roles in Louisiana higher education, including as chief of staff for the Louisiana Board of Regents and executive vice president for the University of Louisiana System. Reed received a doctorate in public policy from Southern University as well as a master’s of public administration and a bachelor’s degree in broadcast journalism from Louisiana State University.

“Kim brings to the position a rich set of national, state and campus experiences focused on increased attainment and equity,” Under Secretary of Education Ted Mitchell said in an email to department staff on Monday.

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Education Department says more former Corinthian students are eligible for loan forgiveness

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Education Department says students who attended dozens of Corinthian-owned campuses across the country are now eligible for federal loan forgiveness.

Pell Surplus Could Help Year-Round Proposal

The federal government will spend roughly $22 billion on the Pell Grant program in 2016, according to new numbers from the U.S. Congressional Budget Office. The more than $7 billion projected surplus in the $30 billion program follows several years of declines in spending on Pell Grants, due to previous changes in eligibility for students.

As a result of the surplus, The Washington Post reported, more support may follow for restoring year-round access to Pell, meaning students can once again use the grants for summer courses. The elimination of that eligibility is one of the budget-related changes to the program during the Obama administration, which the White House recently has sought to reverse.

"Some have argued that Pell costs are unsustainable, but the CBO estimates show that the program has enough funding to restore year-round Pell, a policy with bipartisan support that incents completion and reduces college costs for low-income students," José Luis Santos, vice president for higher education policy and practice at the Education Trust, said in a statement. “Congress has the opportunity to preserve and strengthen this vital resource. We look forward to working with lawmakers to make this a reality.”

Bill Clinton speechifies on Hillary Clinton's plans for debt-free public college

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Bill Clinton hits the stump this week to make the case for Hillary Clinton's college affordability plan, criticizing states' "underfunding" of public higher education.

The significant differences between Hillary's and Bernie's higher ed plans (essay)

There has been much attention paid to higher education in the current Democratic debates, but most people still do not know how Hillary Clinton’s and Bernie Sanders’s policies differ. This lack of information is important because the two candidates have very different proposals. Not only is Clinton talking about debt-free public higher education and not tuition-free education like Sanders, but Sanders is offering a much more comprehensive approach to fixing many higher education issues.

Besides proposing to eliminate tuition at public colleges and universities, Sanders is also focusing on reducing administrative costs, increasing full-time faculty and dedicating more funds for instruction. Like Clinton, he proposes reducing student debt through refinancing at lower interest rates, and he acknowledges that free tuition will only deal with part of the high costs of higher education.

As I argued in Why Public Higher Education Should Be Free, we can substantially reduce tuition costs and improve educational quality if colleges and universities are given an incentive to reduce administrative spending and other nonessential activities. The plan Sanders proposed in Congress calls for providing “an assurance that not later than five years after the date of enactment of this act, not less than 75 percent of instruction at public institutions of higher education in the state is provided by tenured or tenure-track faculty.” This use of federal funds to restore tenure represents one of the many policies that one does not find in Clinton’s proposal.

Sanders’s bill also calls for funding all expenses for low-income students and requiring states to maintain their support for public higher education by mandating “that public institutions of higher education in the state provide, for each student enrolled at the institution who receives for the maximum federal Pell Grant award … institutional student financial aid in an amount equal to 100 percent of the difference between (A) the cost of attendance at such institution … and (B) the sum of (i) the amount of the maximum federal Pell Grant award; and (ii) the student’s expected family contribution.” It also calls on states to “ensure that public institutions of higher education in the state not adopt policies to reduce enrollment.” The push here is to maintain state support for higher education while significantly increasing the federal contributions.

Sanders also wants to make sure that more money ends up in the classroom: “a state that receives a grant under this section shall use any remaining grant funds and matching funds required under this section to increase the quality of instruction and student support services by carrying out the following: A) Expanding academic course offerings to students. (B) Increasing the number and percentage of full-time instructional faculty. (C) Providing all faculty with professional supports to help students succeed, such as professional development opportunities, office space and shared governance in the institution. (D) Compensating part-time faculty for work done outside of the classroom relating to instruction, such as holding office hours. (E) Strengthening and ensuring all students have access to student support services such as academic advising, counseling and tutoring. (F) Any other additional activities that improve instructional quality and academic outcomes for students as approved by the secretary through a peer-review process.”

These policy proposals are far-reaching and focus on improving the quality of instruction and supporting the faculty members who work at colleges and universities. The plan not only aims to increase the number of tenured faculty but also looks to improve the pay and professional development of non-tenure-track faculty. It is a shame that most of the news media has not covered these aspects of Sanders’s plan.

In perhaps his most radical and needed proposal, Sanders pushes these institutions to return to their core missions: “A state that receives a grant under this section may not use grant funds or matching funds required under this section (A) for the construction of nonacademic facilities, such as student centers or stadiums; (B) for merit-based student financial aid; or (C) to pay the salaries or benefits of school administrators.” Sanders’s plan would thus decrease the cost of making public higher education free by decreasing the costs associated with administration, athletics and merit-based aid that goes mostly to the wealthiest students.

Sanders wants to pay for the increase in federal funding for higher education by a tax on financial transactions. At first glance, there appears to be little relationship between Wall Street and public colleges and universities. But if we look at the economic history of the last 30 years, we find that, each time a Wall Street crash occurs, tuition costs and student debt go up. The reason for that correlation is that market crashes cause decreases in state revenue, which in turn cause reductions in appropriations for higher education, which are then followed by increases in tuition and student debt. It is also important to stress that at the very moment the federal government was giving banks and financial institutions trillions of dollars of interest-free loans, it was making a profit off student debt.

Clinton’s plan on her website states that her proposal will “ensure no student has to borrow to pay for tuition, books or fees to attend a four-year public college in their state. Enable Americans with existing student loan debt to refinance at current rates. Hold colleges and universities accountable for controlling costs and making tuition affordable.” Instead of eliminating all tuition at public universities and colleges, she wants to make sure that no student has to go into debt, but that requires a family contribution. She also is calling for an increase in public support for private universities and colleges, especially historically black colleges and universities.

Some of the more troubling aspects of her plan are a push for high-quality online education and increasing tax cuts for higher education, which mainly serve upper-class and upper-middle-class families. Clinton also wants to penalize colleges and universities when their students do not graduate or cannot repay their loans. This policy is a conservative idea that has been promoted by President Obama and Hillary Clinton. Unlike Sanders, Clinton says nothing about increasing the number of tenure-track faculty, improving the compensation and development of non-tenure-track faculty, reducing administrative costs, or controlling the costs of noninstructional expenditures.

The devil is clearly in the details of these proposals, but few people appear to know what these details entail.

Robert Samuels is president of UC-AFT and teaches writing at the University of California at Santa Barbara.

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NCAA Punishes Kalamazoo for Financial Aid Violations

The National Collegiate Athletic Association's Division III Committee on Infractions placed Kalamazoo College on three years' probation Tuesday for violating rules that prohibit Division III colleges from awarding financial aid based on athletic ability. Division III colleges are allowed to weigh athletic considerations in deciding whom to admit, but the rules adopted by the division's members bar them from taking such factors into account when packaging financial aid.

In a joint process through the NCAA's summary disposition process, the Division III infractions panel found that Kalamazoo had for at least five years used ratings that considered athletics participation in determining aid for prospective students, which meant that 567 students received aid packages based on their athletic skill or participation. In addition, the head baseball coach told dozens of players in email messages that "the college’s admissions office would increase merit-based financial aid upon his written recommendation," which the NCAA panel determined could be interpreted as a written offer of aid.

The NCAA panel imposed a ban on postseason play for any team that still has players who received aid based on sports participation.

Education Department rehires two debt collectors it accused of misleading student loan borrowers

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After pledging to stop using five debt collectors last year over allegations they misled borrowers, U.S. Education Department gives two of them new business.

Report on How Federal Aid Policies Affect Tuition

When federal aid increases, the goal, of course, is to help students afford their tuition.

But in reality, is that actually how the situation plays out? It’s a question that’s been part of the federal aid debate for decades, and it’s at the heart of a new paper by David Feldman and Richard Archibald, both professors at the College of William and Mary.

They start with an idea called the Bennett Hypothesis: the argument is that increased federal aid leads to higher tuition, because colleges know that their students will get help from the government.

It is true that colleges can “tax” federal aid, the researchers write. That is, they can give out less of their own aid than they would have otherwise, confident that federal subsidies will make up the difference. Over all, this happens rarely -- and almost never at public institutions.

The researchers also found little evidence that federal aid increases drive up list prices, which are often determined by what upper-income families -- who may be unaffected by financial aid -- are willing to pay.

“If the social goal of federal financial aid policy is to make higher education more affordable to many low-income families, there is ample evidence that it does so,” they write, “despite the fact that some of this aid displaces grant aid the institutions might otherwise have given.”

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