studentaid

New papers find persistent barriers to aid for low-income students, despite federal policy changes

Two new papers find application rates for federal student aid continue to lag for low-income students, and serious barriers remain for those most in need of help paying for college.

Senate Budget Resolution Leaves Out Many Cuts

A Senate budget resolution released by Republican leaders Friday left out reconciliation language from an earlier House budget blueprint that mandated billions in cuts for education programs.

The House budget resolution released in July included more than $200 billion in mandatory spending cuts over the next 10 years -- about $20 billion of those directed at programs overseen by the House education committee. Carrying out those cuts would likely mean significant changes to student loan programs.

The absence of that language might be a positive sign for advocates of student aid. Those groups will watch to see whether an agreement that emerges from conference discussions includes the resolution language.

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IRS Restores Data Retrieval Tool for FAFSA

The IRS and the Department of Education on Sunday restored the data retrieval tool that allows students to automatically import their family income data into their applications for federal student aid.

The IRS abruptly suspended the tool in March, citing suspicious activity and potential vulnerability of taxpayer information. Student financial aid advocates rushed to communicate the change to students and provide assistance to those who would face greater challenges applying for aid. Lawmakers also asked the Department of Education to provide additional help to student aid applicants.

The department said in May that the data retrieval tool wouldn't be restored before the beginning of the new financial aid application cycle this weekend. The renewed availability of the tool means filling out the FAFSA will be quicker and more accurate for students and their families.

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Perkins Loan Extension Blocked in House, Senate

The hopes of a bipartisan group of lawmakers to extend the Perkins Loan program before it expires September 30 were frustrated Thursday.

Members of Congress in the House and Senate had introduced identical legislation to extend the program, which authorizes colleges to make small loans to students to bridge the cost of attendance, for another two years. Those bills hadn't gone anywhere in committee. 

Thursday, Sen. Tammy Baldwin, a Wisconsin Democrat, asked that her extension bill be considered under unanimous consent but the request was blocked by Sen. Lamar Alexander, the Tennessee Republican who chairs the Senate education committee. In the House, Majority Leader Kevin McCarthy, a California Republican, said he had no plans to bring Perkins legislation up for a vote. 

 

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In Reversal, Former Globe U Campuses to Close

Broadview University raised eyebrows earlier this year when it successfully pushed to reopen four Wisconsin campuses of Globe University, a for-profit that shares a common owner with Broadview.

The Obama administration shut down Globe after a Minnesota court ruled that the small chain had committed consumer fraud and deceptive trade practices by misrepresenting job opportunities for graduates of a criminal justice program -- a ruling that mostly applied to the Minnesota campuses. But the Trump administration and the Wisconsin state agency that oversees for-profits granted approval for Broadview to resuscitate four former Globe campuses in that state. One reason for that decision, the state regulator told Inside Higher Ed, was the valuable role Globe played in training veterinary technicians in the state. (Scott Walker, Wisconsin's Republican governor, this month terminated the for-profit oversight agency, which had a reputation as a relatively aggressive state regulator.)

This week, however, Broadview announced that it had made the "very difficult decision" to close three of the former Globe campuses.

"Approval to begin new student enrollment in the former Globe University campuses was granted by the U.S. Department of Education in late April of this year," the university said in a written statement. "Although we had hoped to be able to build campus communities in all of the former Globe locations, due to the low unemployment rate and unique challenges in higher education, Broadview University has made the decision to focus resources on the Madison, Wisconsin campus."

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Proposed Bill Would Grant Waivers to Accreditors

A newly proposed bill in the U.S. House of Representatives would grant broad waivers to accreditors aimed at allowing them to bypass federal requirements in order to encourage innovation and to reduce "administrative burdens." Some observers said the legislation could relate to regulatory questions about the faculty role at Western Governors University and at other competency-based education programs.

Rep. Bradley Byrne, an Alabama Republican and former chancellor of Alabama's community college system, introduced the bill. He's a member of the House's education committee. 

The proposed legislation, dubbed the Innovation in Accreditation Act, would amend the Higher Education Act, which is the law that oversees federal aid. It would establish a process for accrediting agencies to ask the U.S. Department of Education to waive requirements under the law if accreditors can successfully demonstrate a waiver is necessary to "enable to an institution of higher education or program accredited by the agency or association to implement innovative practices," according to draft language from the bill. Such innovation must also reduce administrative burdens without creating costs for taxpayers and "improve the delivery of services to students, improve instruction or learning outcomes, or otherwise benefit students."

Accreditors would also need to describe how they would ensure academic integrity and quality under the waiver.

Observers said the bill could be aimed in part at helping Western Governors University cope with the recently released results of a multi-year audit by the department's Office of Inspector General. Citing concerns about the faculty role in WGU's competency-based model, the inspector general labeled the nonprofit, online university a correspondence course provider and asked the department to seek a reimbursement of $713 million in federal aid.

The department is unlikely to follow those recommendations, many experts said. But lingering questions about what constitutes "regular and substantive" interaction between faculty members and students in competency-based programs -- and in online education more broadly -- could result in Congressional action or revised federal regulations.

The Council of Regional Accrediting Commissions applauded the proposed legislation, saying it addresses real barriers accreditors face and could help colleges better serve students.

"Enabling a process through which the U.S. Secretary of Education may waive barriers to innovation -- as long as accreditors are able to ensure ongoing academic integrity and quality -- is a commonsense way to address technological and other changes that challenge traditional education delivery," Barbara Gellman-Danley, the council's chair and president of the Higher Learning Commission, said in a written statement. "The Byrne bill can make a significant difference in freeing accreditors -- and colleges -- to advance strategies that have proven effective in yielding desired outcomes that otherwise would be prohibited."

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Ohio State to Cover Tuition of Pell Recipients

Ohio State University announced this week that it will cover all gaps in tuition and fees for in-state students who qualify for federal Pell Grants. The university will use institutional aid to pay for any tuition and fees for Pell-eligible students who aren't covered by Pell, state aid or gift aid.

The program will begin next fall at Ohio State's Columbus campus for new, existing and transfer students. The announcement follows a 2015 commitment by the university to increase institutional, need-based aid by $100 million.

“Ohio State’s tuition coverage program will help bring the American dream closer to many more individuals and families throughout the Buckeye State,” Michael V. Drake, the university's president, said in a written statement. “We are thrilled to open our doors even wider to so many more deserving students.”

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Federal Loan Default Rates Rise

Federal student loan default rates are on the rise after four years of declines, according to the U.S. Department of Education's annual release of loan default data.

The federal rate is based on borrowers who have been in repayment for three years. Of the group of roughly five million borrowers who entered repayment in 2014, 11.5 percent defaulted on their loans. That was a slight increase from the rate of 11.3 percent for last year's cohort. The rate began falling four years ago after hitting a peak of 14.7 percent. The Obama administration had attributed some of the declining rate to the growing popularity of income-driven repayment plans.

Ten colleges had rates that exceeded either the federal limit for a single year (at least 40 percent of borrowers in default) or for three years (at least 30 percent), according to the department. Those institutions included several barber and cosmetology colleges, as well as Daymar College, a for-profit based in Ohio, and Southeast Kentucky Community and Technical College.

By failing to hit department-mandated thresholds, those 10 institutions could lose access to federal financial aid.

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Gainful Employment Failures Cluster in 10 States

An analysis from Third Way finds a high concentration of graduates who attended programs that failed the gainful-employment rule in just a handful of states.

The Obama administration crafted the gainful-employment rule to hold career education programs accountable based on graduates' ability to pay off their student loan debt. Nearly one in 10 of the programs assessed under the rule failed to meet passing criteria, according to data released by the U.S. Department of Education in January.

Third Way found that three-quarters of graduates who attended failing programs were concentrated in 10 states. And six states -- Alabama, Idaho, Indiana, Missouri, Nebraska and Oregon -- had a significantly higher proportion of graduates attending failing programs than the national average, the group found. Third Way argues the large variation in outcome by states is evidence that strong national standards are needed for higher education programs.

After announcing in June that she would pursue a regulatory overhaul of the gainful-employment rule, Education Secretary Betsy DeVos has taken multiple steps to weaken or delay existing gainful-employment regulations.

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Study Questions Effect of Performance Funding

A growing number of states -- 35 so far -- have created performance-based funding models that tie portions of appropriations for public colleges to outcome measures such as degree production or student graduation rates. A new research paper examines results of performance-funding formulas in Ohio and Tennessee, which are home to two of the most established of such policies. Advocates also cite the two states has having particularly sound approaches to performance funding.

Production of bachelor's degrees at four-year public institutions did not increase in either state after the funding formulas were enacted, according to the study, which was published by the American Education Research Journal. Associate-degree production also was relatively flat during the decade between 2005-15, as the policies came into effect.

"In both states, community colleges produce significantly fewer associate’s degrees than community colleges in other performance-funding states," wrote the study's co-authors, Nick Hillman, an associate professor of educational leadership and policy analysis at the University of Wisconsin at Madison, Alisa Hicklin Fryar, an associate professor of political science at the University of Oklahoma, and Valerie Crespín-Trujillo, a graduate student researcher at the University of Wisconsin at Madison.

A sole positive effect on credential production found by the study was a substantial increase in certificate production by Tennessee's community colleges.

"The evidence presented here suggests the exemplar performance-funding states have not yet outperformed other states except with respect to certificate programs," the researchers wrote. "Considering the low returns to certificate programs, where graduates’ earnings are often not higher than high school graduates’, this outcome may work against other state policy goals related to economic mobility and work-force development."

The study cited three limitations: that the two states were phasing in their funding incentives during the examined time period; that both states introduced dual-enrollment policies at the same time, which could have muddied the findings; and that the study did not examine other student success-related outcomes, such as retention rates.

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