studentaid

Controversial Accreditor Freezes Membership

The Accrediting Council for Independent Colleges and Schools today will announce a temporary halt in accepting new applications for colleges seeking to become accredited, as well as several other changes, including requirements seeking to ensure more accuracy in self-reported data from member colleges.

The council is a national accrediting agency that oversees many for-profit institutions. It's been under fire lately, due in part for accrediting Corinthian Colleges until the large chain collapsed amid a spate of lawsuits and regulatory challenges. A group of state attorneys general have called on the federal government to drop its recognition of ACICS, as have a coalition of consumer, higher education and labor organizations. The U.S. Department of Education is slated to consider the accreditor's recognition later this month.

ACICS appears to be taking the threat seriously. Albert Gray, the council's president and CEO, stepped down in April. And the accreditor shortly thereafter tightened the screws on ITT Technical Institutes.

“The ACICS Board of Directors is determined to restore trust and confidence in the accreditation process, strengthen ACICS’ oversight of member institutions and ensure that students are receiving a quality education that will put them on [a] path to employment,” Anthony Bieda, the council's executive in charge, said in a written statement. “As we assess the content, structure and effectiveness of all policies and resources, no stone will be left unturned. Every aspect of the agency must be re-evaluated, fortified and enhanced.”

The freeze on new member applications is effective immediately, Bieda said, and will be in place until the accreditor "is satisfied that its program of assessment and review protects student interests, enforces high standards of quality and contributes to the public good."

Other announced changes include:

  • Creation of an ethics board to act directly on potential conflicts of interest, including with ACICS board members;
  • A new data integrity standard that gives ACICS greater explicit authority to sanction programs and institutions that misrepresent their performance through student retention, placement and licensure data;
  • A review of institutions’ written plans for recruiting and admitting students;
  • Greater public disclosure and enforcement of probation standards; and
  • An increase in the frequency and intensity of interim on-site evaluations.

Northeastern Criticized for Fund-Raising Pitch

Northeastern University is getting grief on social media for a text it sent encouraging alumni to donate and to win a chance at having the university pay back $1,000 in their student loans.

A spokeswoman for Northeastern said via email: "Inspired by a well-intentioned donor, the university launched a one-time text message campaign to a limited group of alumni. It was a one-day effort and has now concluded."

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HBCUs cut from North Carolina $500 tuition bill

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North Carolina legislation would have cut tuition dramatically, and many at the institutions feared they would lose revenue. Two universities still are covered by bill.

A Different Approach to Private Student Loans

Private student loans could function more effectively -- and be a more useful tool for helping students pay for postsecondary education -- if lenders made them using criteria such as institutional quality and the likely return on a student's investment rather than credit scores and co-signers, the authors of a new report from the American Enterprise Institute argue.

The authors, Andrew P. Kelly and Kevin J. James, say that student loans made by non-government lenders -- which have shrunk to under 10 percent of all loans disbursed to students -- could play a more central role if they are were based more on market forces and if they were not backed by significant federal guarantees.

"Guarantees reinforce the most significant flaw in the current system: loans are given out with little regard for whether students will be able to pay them back," Kelly and James write. "In contrast, the promise of new ii forward-looking lenders is that by underwriting based on students’ potential -- rather than their background -- these organizations can expand opportunity while strengthening market discipline. Greater market discipline, in turn, can foster a system that is more affordable and higher quality."

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Report on Federal Aid and Affordability

A new report from the Center for American Progress looks at how federal health care and housing benefits address affordability and how those programs could help inform a rethinking of federal financial aid in higher education.

"The result of an expectation-light approach to college affordability is that the ability of federal postsecondary benefits to achieve their desired aims is completely dependent upon the choices made by schools, governors and legislatures across the country," the report said. It adds that "changing federal financial aid benefits to guarantee recipients can purchase a specific set of goods, not just receive a set amount of money, will better conform these programs to the rest of the U.S. social safety net."

Key points from the comparison, the center said, are:

  • Areas such as health care set distinct affordability policies for the most vulnerable individuals that result in minimal to no expectations for out-of-pocket spending.
  • The federal government limits which products within a market it will make affordable, refusing to subsidize the priciest options.
  • Related to this sense of limits, the federal government also creates affordability standards -- specifically, when it deals with debt in areas related to housing -- to protect consumers from unaffordable payments.
  • The federal government does not always pursue affordability on its own. For crucial items such as health insurance, it enlists the help of states and employers to achieve its aims.

Study Links Student Loan Debt and Postcollege Wealth

Those with student debt -- whether they graduated from or dropped out of college -- are less likely than their counterparts without debt to accumulate assets in the years after leaving college, according to a new study. The research linked debt with borrowers, compared to others, having lower net worth, fewer financial and nonfinancial assets, and homes with lower market values. The study, accepted for publication in Children and Youth Services Review, was written by Min Zhan, a professor of social work at the University of Illinois at Urbana-Champaign.

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Amherst president discusses college's welcoming environment for low-income students

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Amherst College's president talks about adding more community college transfers after receiving an award for supporting low-income students.

Interest Rates on Federal Loans Will Hit Record Low

The interest rates on federal student loans will fall by about half a percentage point in the 2016-17 academic year, to the lowest point in history, based on the results of the Treasury Department's auction on 10-year notes. The rate on federal undergraduate loans will drop to 3.76 percent from the current 4.29 percent, and the rate for graduate Stafford loans will fall to 5.31 percent and for Grad PLUS and Parent PLUS loans to 6.31 percent.

The interest rates on student loans used to be set by congressional action, but 2013 legislation linked the rates to market fluctuations.

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Study: Student Debt Doesn't Limit Home Ownership

Many worry that rising levels of student debt limit home ownership. But a new study from the Brookings Institution says that data cited as proof of those fears don't actually demonstrate their accuracy. What the statistics show, the Brookings analysis says, is that the dividing line between those who own homes and those who don't is actually between those with a college education and those who lack one. The study was done by Susan Dynarski, a professor of public policy, education and economics at the University of Michigan.

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Federal Default Rate Adjustment List Published

The Wall Street Journal on Friday published an article revealing the 21 colleges that benefited from an adjustment the U.S. Department of Education made to the institutions' student loan default rates. The department had not disclosed which colleges received the controversial default-rate tweaks, even when members of the U.S. Congress asked.

The newspaper filed a Freedom of Information Act request to get the list, as did Inside Higher Ed, unsuccessfully. But the department mistakenly released the information to the Journal. The colleges included 10 for-profits, many of them small, six historically black colleges or universities, and five community colleges.

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