studentaid

U.S. House Passes One-Year Perkins Extension

The U.S. House of Representatives on Monday approved a one-year extension of the federal Perkins Loan program, which is set to expire this week.

House lawmakers passed, on a voice vote, legislation that would allow the federal Perkins Loan program to continue through next September. Unless the Senate acts, the Perkins Loan program will expire at midnight on Thursday. If the program were to expire, colleges would be able to continue to make Perkins Loans to some students who need the financing to finish their degrees, but colleges would be unable to make any new loans.

Passage of the House bill on Monday sends the fate of the Perkins Loan program to the Senate. Senator Lamar Alexander, the Tennessee Republican who heads the Senate education committee, has called for eliminating the Perkins Loan program as part of an effort to simplify and streamline the federal government’s student loan programs.

Senator Patty Murray of Washington, the top Democrat on the education committee, has said she doesn’t want to see the program expire.

In a statement, Education Secretary Arne Duncan said that Perkins is an “important campus-based financial tool” and called on Congress to “make it larger, better targeted and more effective at helping students and families.”

The legislation that cleared the House on Monday would also extend for a year two federal higher education committees, the National Advisory Committee on Institutional Quality and Integrity, which advises the education secretary on accreditation issues, and the Advisory Committee on Student Financial Assistance.

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Student Loans and the College First Date

Senator Elizabeth Warren of Massachusetts was in Wisconsin Saturday to boost the election chances of fellow Democrat Russ Feingold, a former U.S. senator seeking to return to that position. The Milwaukee Journal Sentinel said that she focused on student debt issues, noting that Republicans (including Feingold's opponent, Senator Ron Johnson) have blocked her legislation that would result in lower interest rate options for many borrowers. Feingold also focused on student debt, saying that it was an issue about which he was hearing regularly on the campaign trail. Feingold said one student recently told him that students discuss their debt situations on first dates. "We need a better ice breaker for kids," quipped Feingold.

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College Abacus Releases Tool for Low-Income Students

College Abacus is a free online tool for students and families to compare college pricing -- using net-price estimates taken from colleges and federal databases. The tool, which is owned by ECMC Group, a nonprofit loan guarantor, was one of several outside entities the U.S. Department of Education collaborated with on new data from the White House's College Scorecard, released earlier this month. College Abacus got early access to information from the large data sets that undergird the Scorecard, incorporating it into the online tool.

On Monday the group announced the release of a new tool aimed at low-income students. In addition to net-price comparisons, the new Pell Abacus uses data from the Scorecard to display college-specific information on financial factors such as average loan payments for Pell Grant recipients, the percentage of students who receive Pell Grants and the average monthly income percentage spent on federal loan repayments after college.

“By making this process simple to navigate without tax forms and accessible on mobile phones, we’re removing some of the key barriers preventing low-income students from exploring their full range of college options,” Abigail Seldin, co-founder of College Abacus and vice president of innovation and product management at ECMC Group, said in a written statement.

House Lawmakers Push Perkins Loan Extension

With just a week before the federal Perkins Loan program is set to expire, a bipartisan effort to extend the program emerged in the U.S. House on Thursday. Representatives Mike Bishop, a Michigan Republican, and Mark Pocan, a Wisconsin Democrat, introduced a bill that would allow the Perkins Loan program to continue through next September.

Colleges and higher education groups have stepped up their lobbying in recent weeks to prevent the program from expiring next Thursday, Oct. 1. Some Republicans have been critical of the program as they look to simplify and streamline the array of federal student loan options.

Representative John Kline of Minnesota, the Republican who chairs the House education committee, said Thursday that he supports the one-year extension. “The current financial aid system is too confusing, complicated, and can discourage students from pursuing a college degree,” he said in a statement. “But this is just one of many challenges facing today’s higher education system. This bill will ensure we continue to support students and institutions while we continue our larger effort to strengthen higher education.”

Beyond debates about whether the Perkins program should continue, lawmakers also need to come up with more than $500 million elsewhere in the budget to offset what the Congressional Budget Office has determined is a cost of renewing the program.

The deal reached by Democrats and Republicans on the House education committee Thursday would pay for the program’s renewal by scaling back the program’s grandfathering provisions, reducing the amount of time that borrowers are eligible to receive additional Perkins Loans.

Under the bill, students who receive a Perkins Loan for the current 2015-16 school year (or those who previously received one) will be eligible to receive additional Perkins Loans until March 31, 2018, instead of Sept. 30, 2020, which is the current law.

Separately, the Perkins Loan extension bill would also renew for one year the authorizations of two higher education committees: the National Advisory Committee on Institutional Quality and Integrity, which advises the Education Department on accreditation issues, and the Advisory Committee on Student Financial Assistance, which makes recommendations to policy makers on financial aid issues.

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Pell Grant recipients lag behind peers at same college and nationally, report finds

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Report sheds light on how well aid recipients fare at individual colleges, showing in some cases significant disparities among Pell and non-Pell students within a campus and across similar campuses.

U of Wisconsin Official Takes Temporary Federal Post

Deb Bushway, the interim associate dean at the University of Wisconsin-Extension, has joined the U.S. Department of Education as an adviser to Under Secretary Ted Mitchell, a spokeswoman for the department said Wednesday. Bushway will focus on innovation in higher education during her post, which is temporary.

The role appears similar to one recently vacated by Paul LeBlanc, president of Southern New Hampshire University. LeBlanc spent three months as an unpaid adviser to Mitchell. His focus included two experimental sites projects -- on competency-based education and on partnerships between traditional institutions and noncollege providers, including boot camps, online course providers and corporate training entities. The experiments waive some requirements for participation in federal aid programs. The department this week said it will release further guidance for the competency-based education one, and the feds plan to announce the alternative provider project soon.

Bushway is an expert on competency-based education. Prior to arriving at Wisconsin, where she has worked on a direct-assessment competency-based education program that does not rely on the credit-hour standard, Bushway worked as chief academic officer and vice president of academic innovation at Capella University. She helped develop the direct-assessment degree tracks at Capella, a for-profit chain. Bushway also previously worked at Minnesota's Metropolitan State University.

"Having an experienced, respected practitioner voice at the table when policy is being made is enormously helpful," LeBlanc said in a written statement. "Deb can bring institutional realities to bear in ways that help the department and those it regulates."

The department in the past has tapped officials who work at colleges as temporary advisers. In 2012 Karen Gross, who was then president of Southern Vermont College, served in a similar role at the department. Even so, some critics said LeBlanc's appointment raised at least the appearance of a conflict of interest, because Southern New Hampshire was among the first institutions to start a competency-based program.

Guidance on Competency-Based Education

The U.S. Department Education said Tuesday it is poised to release an extensive reference guide for institutions that are participating in an experiment on competency-based education. Since that project was begun last year, the department said it became clear that more guidance was needed -- for both colleges and accrediting agencies.

The department has yet to release the document publicly, but plans to post it at this link.

“We believe that this guide will offer tremendous support for both experienced and new competency-based education providers as they implement this experiment,” Ted Mitchell, the under secretary of education, said in a written statement. “We recognize that many of you were anticipating that the guide would be released earlier this summer, but it was very important for us to have a high level of confidence that the guidance it contains is on very firm ground.”

The experiment also will expand, the department also announced, to better include institutions with competency-based programs that are based on a subscription model. Under this approach, students can work through educational content and assessments at their own pace, paying a single fee for a specific amount of time.

Under the experiment’s expansion the department will change its financial aid disbursement period to fit with the subscription model.

Saint Leo President Skips Inauguration, Adds Scholarships

William J. Lennox Jr., the new president of Saint Leo University, has decided to skip an inaugural. "A day or more centered around me seems at odds with our student-centered mission. Quite honestly, it is not who I am or what I want to represent as your president," he wrote in an email message to students and faculty members. So to honor his new position, the university will award 20 one-time $2,500 scholarships, funded by a donor. The awards will be called inauguration scholarships.

Report: Too Little Done to Encourage Income-Based Loan Repayment

Many student loan borrowers who could qualify for the federal government's income-based repayment plans do not participate in them, and the Education Department has not done enough to make borrowers aware of their repayment options, the Government Accountability Office said in a report Thursday.

The Obama administration has worked hard in recent months to bolster the number of borrowers in its income-based repayment programs, which it has expanded and heavily promoted, and it reported some success last month. But the GAO report, which was requested by some Democratic members of Congress, said that fewer than one in seven holders of direct student loans were paying them back based on their income levels, while more than half were eligible for the programs that would allow them to do so.

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Essay on prior-prior (PPY) year data for Free Application for Federal Student Aid (FAFSA)

Most previous efforts to introduce transparency to college financial aid have not resulted in their intended changes. But a new policy that the White House announced this past Sunday has been described as a game changer. And it is.

Beginning in 2016 for the 2017-18 academic year, the Free Application for Federal Student Aid will be available earlier -- in October rather than January -- and students will be able to use income information from tax returns completed two years before they apply rather than the previous year. Allowing students to use this so-called prior-prior year (PPY) income data for the FAFSA moves the financial aid process forward in unprecedented ways.

When I began my career in admissions 24 years ago, my standard spiel included the following line: “Don’t rule out any college because of its sticker price, because you have no idea how much any college will cost until you apply, get admitted, and hear about scholarships and financial aid.” That line is just as relevant today, despite the changing landscape for higher education and admissions.

It has not been the most reassuring statement for students, and it has assumed a leap of faith from many families that we’ve not yet earned. But it has represented the reality of the college search and selection process. That reality has opened colleges and universities up to criticism that we are being elusive about cost and price and have not been providing the transparency we should to close the deal on a four-year partnership with students and families.

It has been a problematic aspect of the college search and selection process, but one on which work has continued to be done, with varying levels of success, to introduce simplicity and clarity.

First, there was the U.S. Department of Education’s mandated Net Price Calculator (NPC). But unfortunately, the NPC has done nothing to address the wait-and-see approach to paying for college. Instead, the NPC simply added another layer of complication and estimation that does nothing to provide the kind of insight we had hoped to give students, simplify the process of applying for financial aid or help families coming to terms with final cost of an advanced degree. (The truth is that, for many colleges, the NPC added more administrative costs, which are passed along to students.)

The Department of Education and the Gates Foundation have also called for simplifying the FAFSA as the solution. But higher education and the financial aid world seem to have only lukewarm support for making the FAFSA easier, because it could be oversimplified to the point that it is no longer useful or accurate. And some people predict that such efforts will lead more colleges to use more customized institutional forms or adopt other standardized applications for financial aid like the College Board’s College Scholarship Service (CSS) Profile.

This spring the National Association of Student Financial Aid Administrators issued a report about implementing prior-prior year income data for the FAFSA and some of the implications. Are there concerns and uncertainties about it? Yes. Will this force colleges and universities to change? Yes. Will traditional admissions practices be impacted? Yes. Will other enrollment professionals and I have to get creative to respond to a new admissions calendar? Yes.

Yet, despite those uncertainties and concerns, PPY, a truly student-centered solution, is ultimately good for the college search and selection process and the feds should be commended for this forward-thinking simplification of the financial aid process. Most important, will it simplify processes for families and make our complex system a bit easier for them to navigate? Undoubtedly.

Some of the major benefits include:

PPY will allow students to file their FAFSA much earlier. Instead of waiting until Jan. 1, after college applications have mostly been submitted, the financial aid application process now will align more closely with timelines for the traditional application process. PPY relies on tax returns and information completed before the senior year, so aid awards can be given much earlier in the recruitment and admissions process, consequently providing students and their families with valuable information about cost earlier.

Some within higher education circles will complain that this new timeline may result in more “shopping” by families from institution to institution, but I can’t imagine it being any worse than it is already. Imagine being able to provide real-time financial aid information to a student when they are most excited about your college, rather than telling them they have to jump through a bunch of hoops and then wait weeks, or even months.

PPY will allow most students to use the IRS’s Data Retrieval Tool. PPY would be a dream come true for those who advocate for simplicity. The Data Retrieval Tool, which is one of more positive developments that we’ve seen to improve the financial aid process in recent years, could be used to complete a FAFSA more accurately and with greater ease.

Moreover, since the FAFSA and financial aid award time frames have not kept pace with that of the college search, using PPY would eliminate the estimating that inevitably leads to confusion, delays and other potential problems in the financial aid process. PPY would also be friendlier to family-owned businesses and those students with complicated tax situations, often requiring extensions beyond April 15 for tax filing -- which does not allow some families to complete accurate tax information during what is now known as financial aid season. And since universal college decision day is May 1, these families often have to make a college choice without all of the necessary information.

PPY will result in more students accessing aid for which they are eligible. Because PPY relies on existing tax information and a new FAFSA could be populated using the Data Retrieval Tool, it has the potential to be more inviting for students who are turned off by the perceived complexity of the FAFSA and therefore opt not to complete it. Why wouldn’t we want to make it easier for these students to apply for and actually receive aid for which they are eligible, instead of having them opt out and ultimately miss out?

These students are likely to take out student loans to pay for college or perhaps take a semester off to earn tuition money -- only never to return. PPY is about access and choice, which are two of the most important defining qualities of the U.S. higher education system. Everyone should be excited about the prospect of greater accessibility to a college degree and realistic choices for paying for it.

If our goals are to provide earlier information about cost, to simplify the application process and to increase access to higher education and to financial aid available, then PPY -- regardless of the potential complications and anxiety for public policy makers and higher education professionals -- is one of the most important changes to the financial aid process in a generation. And, for me, it’s a great development because it is a win for students.

Kent Barnds is vice president of enrollment, communications and planning at Augustana College.

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