Quick Takes: U.S. Audit Slams Fifth Third Over Student Loans, Northeastern Ill. Withdraws Proposal on Protests, Effort to Save AP Italian Fails, Baltimore Hebrew May Merge Into Towson U., For-Profit Purchases

January 8, 2009
  • The Bush administration's Education Department has taken a lot of heat for its perceived failings in regulating the student loan industry, which critics say have resulted in conflicts of interest and excessive profiteering by lenders. Are department leaders trying to go out on a different note, or has its inspector general been fully unleashed? An audit released Wednesday by the Office of Inspector General concludes that Fifth Third Bank violated federal prohibitions against illegal inducements in agreements the lender had (jointly with the now-defunct Student Loan Xpress) with several firms that helped it market consolidation loans to borrowers. The audit found that Fifth Third paid the three companies (MSA Solution, Inc., Pacific Loan Processing, Inc.,and Law School Financial) increasing commissions when they signed on more borrowers, violating federal rules against inducements, and urged the department to examine arrangements that Fifth Third had with other such middlemen to see if they violated the same rules. The inspector general urges the department's Federal Student Aid Office to limit Fifth Third's participation in the federal loan programs and to consider fines or other financial penalties. A spokesman for Fifth Third declined to comment on the audit, but the report itself contains comments in which bank officials protest that the department's interpretation conflicts with years of previous guidance and rulings.
  • Northeastern Illinois University has withdrawn a proposed policy on protests and signs that angered many students and civil libertarians. The proposal would have required, among other things, that protesters to submit copies of fliers and signs to administrators two weeks before bringing them on the campus. Sharon Hahs, the president, sent a memo this week to faculty leaders telling them that the plan was being withdrawn, but the note did not provide detail on why. That prompted the College Freedom blog, which has been critical of the proposal, to say that "it's not clear that the administration has learned to respect freedom on campus, and that existing and future policies will be interpreted to protect academic freedom."
  • An effort to save the Advanced Placement Italian program has failed, but it could be revived in the future, the Los Angeles Times reported. The College Board announced last year that the program had failed to attract enough students to be sustainable. But following protests from Italian teachers and Italian-American leaders, the board said it would reconsider if private funds could be raised to support the program. The Italian Language Foundation was created for that purpose, but failed to attract enough money. College Board officials told the Times that if funds are raised in the future, the program could still be revived.
  • Baltimore Hebrew University may merge into Towson University, The Baltimore Sun reported. Baltimore Hebrew is a small institution focused on training teachers for Jewish schools and programs. It is officially non-denominational. Towson officials said that a merger could enhance Jewish studies offerings.
  • It's been a busy week for for-profit acquisitions in higher education. Rockbridge Growth Equity announced the purchase of Northcentral University, an online institution with 7,500 students in undergraduate and graduate degree programs. Kaplan Inc. meanwhile announced the purchase of companies that provide English language training in Vietnam and in Britain.
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