studentaid

Proposed Federal Rule Making on 'Innovation' and Aid

The U.S. Department of Education plans to hold a negotiated rule-making session aimed at changing regulations for federal aid eligibility to try to "promote greater access for students to high-quality, innovative programs," according to a Wednesday posting from the Office of Management and Budget.

The posting's brief description of the proposed rule making said it would include a focus on the "credit hour, competency-based education, direct assessment programs and regular and substantive interaction between faculty and students in the delivery of distance education programs."

With such a broad mandate, experts said the session could go in several directions. And while the department can make changes in each area, other tweaks would require congressional action. In coming weeks Inside Higher Ed will attempt to report on the department's plans for those regulations.

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White House Spending Cuts Would Hit AmeriCorps Funding, Preserve Student Aid

A $15 billion package of proposed spending cuts released by the White House Tuesday would leave student aid and campus-based research untouched.

The proposed spending cuts, known as rescissions, would rescind $150 million in funds from the National Service Trust, which provides awards to eligible AmeriCorps volunteers. The Trump administration said those cuts would not affect the operations of the agency and that its current balance more than covers the amount needed for educational awards in fiscal year 2018.

The rescission package comes just over a month after President Trump signed a $1.3 trillion spending bill to keep the government running through September. Unlike other spending bills, the proposed cuts can be pushed through both chambers of Congress without a potential filibuster in the Senate.

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New Policy Group Adds Advocacy Panel

Higher Learning Advocates is a bipartisan group focused on federal policy that formed last year. This week it added a "network" of higher education leaders who it says will contribute to federal policy discussions, with a focus on student success.

The network includes:

  • Tony Carvajal, executive vice president of the Florida Chamber Foundation
  • José Luis Cruz, president of Lehman College of the City University of New York
  • Barbara Damron, secretary at the New Mexico Department of Higher Education
  • Joey Hatch, member of the Tennessee Board of Regents and retired general manager of Skansa Building USA Inc.
  • Mike Krause, executive director of the Tennessee Higher Education Commission
  • Michele Siqueiros, president of the Campaign for College Opportunity
  • Michael Sorrell, president of Paul Quinn College
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Some House GOP Urged Preservation of Public Service Loan Forgiveness

In a letter last month to Representative Virginia Foxx, the chair of the House education committee, 13 House Republicans urged that the Public Service Loan Forgiveness program be preserved.

Foxx, a North Carolina Republican, last year released a proposal to reauthorize the Higher Education Act, dubbed the PROSPER Act, that would eliminate PSLF as well as streamline several current loan repayment options. The bill was advanced out of committee in December but has yet to garner support for a floor vote.

In the letter, dated April 18, the Republicans focused in particular on how loan forgiveness could help in addressing a shortage of public health professionals.

"Public sector employers in our communities have told us that PSLF has transformed their workplaces," the lawmakers wrote. "It helps recruit and retain top talent, making workforces more efficient and effective and saving time and money on recruitment and training."

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student loans

New U.S. Approach on Delinquent Borrowers

The Department of Education told a federal judge Thursday that it would terminate a January contract award to two debt collection firms as it reassesses its strategy for serving borrowers in default on their federal student loans.

The department said in the filing that it plans to start “significant engagement” with borrowers as early as 90 days after they become delinquent on their student loans. Borrowers are considered to be in default when they go more than 270 days without making a payment on their federal student loans.

Those as yet unspecified outreach efforts would reduce the volume of borrowers in default, improve service to delinquent borrowers, and lower delinquency levels as well, the department argued.

In January, the department said in another court filing that it would award contracts to collect on defaulted student loans to two firms, Performant Recovery Inc. and Windham Professionals. The same week, it issued notices terminating collection contracts for seven firms originally issued in December 2016. Those awards, made under the Obama administration, set off a protracted legal fight that’s continued for more than a year.

The contract awards to Performant and Windham could be valued at as much as $400 million.

"The current private collection agencies (PCA) under contract with ED have sufficient capacity to absorb the number of accounts expected to need debt collection services while the process for transitioning to the new approach is developed and implemented," the department said in its court filing Thursday. "Therefore, additional PCA contract work is not currently needed."

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Private sector lenders ready to expand into graduate loan market

Private-sector companies say they're ready to expand footprint in student loan market (again) as they push for new caps on federal lending to graduate students.

Impact of Graduating With Debt as Recession Hit

Graduating from college in 2007-08, just as the recession hit, was particularly challenging. A new study by RTI International for the National Center for Education Statistics shows how much more difficult it was for those with student debt than for those who didn't have such debt.

Among the findings, which were based on a survey of the graduates as of 2012:

  • 44 percent of those with debt had taken "an undesirable job or job outside field due to education cost," while this was the case for only 28 percent of non-borrowers.
  • 44 percent of borrowers delayed the purchase of a home, compared to 23 percent of non-borrowers.
  • 26 percent of those with debt delayed getting married, compared to 14 percent of non-borrowers.

 

 

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Graduation Rates for Pell Recipients

Last year's upgrade of the federal government's primary higher education database for the first time allowed researchers to track graduation rates for recipients of Pell Grants. Now Third Way, a center-left think tank, has released an analysis of the new Pell graduation-rate data.

The group found that just under half of first-time, full-time Pell recipients earned a bachelor's degree within six years at the college where they first enrolled. And only 47 percent of institutions awarded degrees to more than half of the Pell recipients who initially enrolled.

"Taxpayers invest billions of dollars in Pell Grants because they provide a pathway to increased social and economic mobility for millions of low- and moderate-income students each year," Third Way said. "However, as this analysis shows, there is wide variation right now in the degree to which institutions admit and succeed with this population. This is in large part because there is little accountability to ensure our investment goes towards institutions that actually help their Pell students succeed."

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University gives away more scholarships than it budgeted for, and revokes them

If officials award more scholarships than budgeted for, should students lose funds? Is it fair to take away funds only from international students?

Win for Ashford in Battle Over GI Bill Benefits

Iowa's Supreme Court has tossed out a lower court's decision in the long-running legal battle over Ashford University's eligibility to receive Post-9/11 GI Bill benefits.

The state's approval agency in 2016 attempted to strike the for-profit university's eligibility, citing a previous decision by Ashford to close its physical location in the state. The university and its holding company, Bridgepoint Education, sued to block that decision, which could have meant that it would no longer be able to enroll veterans nationwide, as it had registered for GI Bill eligibility in Iowa. Arizona, however, later granted Ashford that status. But the legal battle in Iowa continued.

Last July an Iowa district court issued a setback to Ashford, dismissing its petition to block the loss of eligibility. The university later halted enrolling veterans as new students. Meanwhile, California's attorney general sued Ashford for allegedly making false promises to students, among other allegations, and Democrats in the U.S. Senate called on the U.S. Department of Defense and Department of Veterans Affairs to take additional steps to protect veterans and current members of the U.S. military who are enrolled at the university.

The for-profit appealed the district court's decision. And the state's Supreme Court last week backed its move to have the lower court's decision vacated.

The decision last week found that Eliza Ovrom, the district court judge, failed to disclose in a timely manner family ties to the state office of attorney general, which had been involved in the Ashford dispute. (Ovrom's son is an assistant attorney general who works in a child-support unit, and her husband is a consumer advocate for the state's utility board, according to the Supreme Court's ruling.)

"The issue is not whether Judge Ovrom’s ruling was correct or incorrect, but rather whether she should have been in a position to rule at all," the court said. "As in many ethical issues, it is the appearance of a lack of impartiality that is at the heart of Judge Ovrom’s failure to disclose a potential conflict. Had she done so, and assuming she would have recused herself at an earlier stage of the proceedings in response to a similar request, she would logically have not been the author of any such rulings."

Ashford can resume its legal challenge to the state's move to yank GI Bill eligibility, according to the ruling, and it will retain that eligibility for now. The university is again enrolling new students who receive GI Bill benefits.

In March the university announced that it plans to convert to a nonprofit, with Bridgepoint serving as an online program management (OPM) for Ashford and potentially other universities. Ashford's regional accreditor is expected to make the call on that attempt as soon as June.

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