American Commercial Colleges, a for-profit higher education business in Texas, has agreed to pay the federal government up to $2.5 million to settle claims that it falsely certified that it was in compliance with certain requirements to receive federal student aid. A statement on the settlement from the Justice Department said that American Commercial Colleges had "orchestrated certain short-term private student loans" that the college repaid in order to appear to comply with the "90/10" rule. That rule requires that colleges seeking to participate in federal student aid programs receive at least 10 percent of their revenues from sources other than federal student aid. H. Grady Terrill, a lawyer for American Commercial Colleges, told The Lubbock Avalanche-Journal that he anticipated the institutions soon reapplying for authority to operate.
As some students continued to occupy the president's office at Cooper Union Wednesday, others took their protest to commencement, The New York Times reported. Students and alumni are angry at President Jamshed Bharucha over the decision to start charging tuition. Many graduates rose and turned their backs on the president when he spoke. The outside speaker was New York City Mayor Michael Bloomberg. In his remarks, Bloomberg did not take a stand on the decision of the university to deviate from the tuition-free system set up by the institution's founder Peter Cooper. But Bloomberg, citing his own history of giving to his alma mater (Johns Hopkins University), urged the new graduates to donate. "As frustrated and as angry as you may be about the school’s present situation, its future really is yours to determine," Bloomberg said. "When you walk out these doors today, do not leave the passion you have shown for this institution and its past and its future behind. Stay involved. Stay committed. And do what Peter Cooper did: Donate what you can."
Half of new college graduates are surprised by their levels of college debt, according to a new national poll of graduates by Fidelity. And 39 percent of new graduates said that they would have made some different choices had they fully understood the level of debt they were building up in college.
WASHINGTON -- The House of Representatives passed a bill Thursday that would create variable interest rates for student loans, but the measure is likely to stall since Senate Democrats strongly oppose it and President Obama has vowed a veto. Interest rates for federally subsidized Stafford loans will double to 6.8 percent on July 1 if Congress does not act, and both President Obama and Congressional Republicans had originally said they favored a long-term solution. But Congressional Democrats have opposed the House Republicans' plan, which would create interest rates based on 10-year Treasury bonds that would vary over the life of the loan, and want to sustain the 3.4 percent interest rate for another year or two so that Congress can consider the interest rate in the context of the broader renewal of the Higher Education Act.
The Obama administration had originally proposed a market-based solution of its own: as in the House Republican plan, rates would vary from year to year with interest rates in the broader economy. But, once a loan was issued, the interest rates would be fixed over the life of the loan. In a statement Thursday night, Education Secretary Arne Duncan suggested that the administration might support Democratic proposals to push the increase back. "Now is not the time to double interest rates on student loans, and we remain committed to working with Congress on a bipartisan approach to a long-term, fiscally sustainable solution that will help students and families afford higher education now and in the future," Duncan said. "Given the impending July 1 deadline, an extension that protects students against higher rates while Congress develops an alternative solution is another reasonable option."
The bill, H.R. 1911, passed by a vote of 221 to 198, largely along party lines.
A Dallas woman who has enrolled in and dropped out of 13 colleges since 2009 -- regularly applying for and keeping federal financial aid -- was indicted Tuesday on six counts of financial aid fraud, The Dallas Morning Newsreported. When some of the colleges asked her to return aid funds, she refused, and when one college cut off her aid, she filed an appeal.
The U.S. Education Department today published its annual compendium of all the data you'd want to know about American education: "The Condition of Education 2013." The report, published by the National Center for Education Statistics, includes special focus sections on the employment rates of young adults (noting that those with bachelor's degree are far likelier than high school graduates to be employed) and on various aspects of student debt.
Historically black colleges urge Education Department to reconsider changes to some student loan criteria, and for-profit colleges and student advocates gear up for rewrite of "gainful employment" regulation.
Education Department will delay enforcing a rule that requires states to submit evidence that colleges are authorized to operate within their borders -- and that could end colleges' aid eligibility if states don't do so.
As Congressional Democrats argue in favor of extending the current interest rate on subsidized student loans, House Republicans in committee back a bill that would overhaul how those rates are determined.
WASHINGTON -- Senate Democrats introduced a bill Wednesday that would keep the interest rate on subsidized student loans at 3.4 percent for another two years at a cost to the government of $8.6 billion -- a measure that underscored the distance between Congressional Democrats and the White House on interest rates. The interest rate for subsidized Stafford loans, need-based loans that don't accumulate interest while students are enrolled in college, will double to 6.8 percent on July 1 if Congress does not act.
The interest rate increase was long planned -- it was written into a 2007 law that gradually lowered interest rates for four years before letting them rebound -- and was supposed to occur last year, but Congress passed a one-year extension of the 3.4 percent rate. The White House and Congressional Republicans have both proposed plans to base the interest rate on the government's cost to borrow, which would allow the rate to vary from year to year.
Congressional Democrats, though, want to keep the rate at 3.4 percent until the issue can be considered in the reauthorization of the Higher Education Act. The legislation proposed Wednesday, sponsored by Senator Tom Harkin, the Iowa Democrat who is chairman of the Committee on Health, Education, Labor and Pensions, and Senate Majority Leader Harry Reid, among others, would pay for the extension through changes to tax law affecting retirement accounts, the oil industry and tax deductions for foreign companies. The House, meanwhile, will mark up its interest rate proposal at a hearing today.