studentaid

Bill Focuses on Wealthy Colleges' Endowment Income

U.S. Representative Tom Reed, a New York Republican who has been critical of the financial policies of colleges and universities with large endowments, has drafted legislation to act on his concerns. Bloomberg reported that his draft bill would require colleges with endowments greater than $1 billion to spend at least 25 percent of endowment income on financial aid or risk losing their tax-exempt status. There are currently nearly 100 colleges and universities that would be covered by the legislation. Higher education leaders have generally opposed regulation of their endowments, and Reed told Bloomberg he expected lobbying efforts against his bill to intensify.

States cry foul over U.S. plan to curtail access to FAFSA student data

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States worry that a Department of Education plan to curtail their access to data from the federal student aid form will cause headaches for state aid awards.

U.S. Agencies Impose Penalties on Higher One

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.

The company announced on Dec. 15 that it was selling its disbursement business to Customers Bank.

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Report examines easing access to public benefits for low-income students

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A new report from the Center for Law and Social Policy recommends supplementing financial aid with other government assistance programs to help low-income students succeed in college.

Bills in 10 States for Debt-Free College

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.

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U.S. loosens part of its ban on college recruiter pay

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The Obama administration loosens part of its ban on the types of bonuses colleges may pay admissions recruiters.

Studley to leave her position at the Education Department

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Jamienne Studley, the No. 2 higher ed official at the Education Department, will leave this month after a frenetic two and a half years.

Most Freshmen Apply to One College, Data Suggest

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.

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Lawmakers, government watchdogs question Education Department management of student loans

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Lawmakers, government watchdogs question whether the Office of Federal Student Aid is up to the task of running the nation’s $1.2 trillion student loan system.

UPDATE: U.S. to Settle Fraud Case With For-Profit College Chain

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 Post reported 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."

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