Higher Education Quick Takes

Quick Takes

February 26, 2014

Ever since a 2009 law restricted the ability of credit card companies to push their wares on college students, the companies have substantially reined in their marketing to students -- but are targeting alumni instead, the Government Accountability Office said in a report released Tuesday

The GAO report found a decline in the number and value of affinity card agreements, in which issuers use the institution's name or logo in exchange for payments. Several leading providers of credit cards said that they had ceased their marketing to students, and college officials interviewed by GAO agreed.

February 26, 2014


Sallie Mae’s loan servicing operations will soon be housed in a separate business entity called Navient, the company announced Tuesday.

As it first disclosed last year, Sallie Mae--formally known as SLM Corp.-- is in the process of splitting up into two distinct companies: Navient and Sallie Mae.  

Navient, starting this fall, will service most of Sallie Mae’ existing private student loan portfolio and also assume responsibility for Sallie Mae’s contract with the U.S. Department of Education to manage the payments of federal student loan borrowers.

The company’s consumer banking business will continue under the name Sallie Mae and will originate new private student loans and service those loans.

Sallie Mae is the largest servicer of the federal government’s portfolio of direct student loans, with some 5.7 million accounts.

The Education Department also issued guidance Tuesday about the changes, which will begin to affect borrowers this fall. The department described the impact on federal student loan borrowers as “minimal.”

Federal borrowers whose accounts are currently managed by Sallie Mae will be able to contact Navient at the same phone numbers and mailing address, but they will need to log on to their accounts at a new website. In addition, borrowers will have to write checks using the new name and change any online bill paying services. A borrower who has set up automatic debiting from a bank, however, no action will be required, the department said.

Sallie Mae said in a statement that those borrowers would receive this spring and summer “personalized information about their account and any changes needed to ensure a smooth transition.”

The company’s split comes as its student loan servicing practices have come under scrutiny from federal regulators, several members of Congress and consumer advocates. Sallie Mae is facing multiple inquiries over how it applied the loan payments of military servicemembers, who are entitled to special borrower benefits.

Sallie Mae has disclosed to investors that it set aside $70 million, as of the end of 2013, to cover the “expected compliance remediation” relating to those inquiries.

Consumer advocates, Senator Elizabeth Warren of Massachusetts, a Democrat, have also complained that the Education Department is too lax in its oversight of how Sallie Mae services federal loans.

A group of state attorneys general, led by Illinois Attorney General Lisa Madigan, are also probing the company’s debt collection, loan servicing and other practices. 

February 26, 2014

The University of Michigan is under federal investigation for its handling of a rape allegation against a former football player, The Los Angeles Times reported. The U.S. Education Department’s Office for Civil Rights will examine the university’s Title IX grievance procedures and determine whether Michigan responded appropriately to complaints, reports and incidents of sexual violence. The athlete, Brandon Gibbons, was expelled in December for sexual misconduct, but the incident in question allegedly occurred in November 2009. Gibbons was arrested but no charges were filed.

February 26, 2014

A state judge has backed the City University of New York on a challenge by its faculty union to the controversial "Pathways" program to align the curriculum to ease transfer from CUNY's two-year to four-year colleges. The Professional Staff Congress, the union, challenged the system's legal authority to institute a major academic change, arguing that faculty members needed to play more of a role. A state judge found this argument "devoid of merit."  The faculty union is vowing to appeal the judge's decision, and is also urging the New York City Council to intervene in the dispute.


February 25, 2014

At the request of President Neil D. Theobald, Temple University’s Board of Trustees voted Monday to reinstate its women’s rowing and men’s crew teams, after cutting the squads, along with five other sports, in December based on a recommendation by Athletics Director Kevin Clark. Although the cuts were motivated by both financial and Title IX considerations, the U.S. Education Department’s Office for Civil Rights announced last week it would investigate whether the university “is failing to provide equal athletic opportunity for female athletes compared to male athletes, with regard to locker rooms, practice and competitive facilities, housing and dining facilities and services, and in the area of athletic financial assistance.”

Campus officials had said the cost of renovating the crew and rowing teams’ facilities was too high to continue with the sports, but Theobald and Philadelphia Mayor Michael Nutter also announced Monday that the city and a trustee have donated money to renovate the East Park Canoe House.

February 25, 2014

In today’s Academic Minute, Nicholas Leadbeater of the University of Connecticut continues his examination of the chemistry of the show "Breaking Bad." Today he discusses Walter White's use of acids to make evidence disappear. Learn more about the Academic Minute here.


February 25, 2014

Kent State University plans to start awarding associate degrees to students in bachelor's programs who complete 60 credits, The Plain Dealer reported. The idea is that those who drop out will have a credential, while other students will be encouraged by their progress to continue on for a bachelor's degree. Further, officials hope to qualify for more state funding as Ohio shifts more funds for public higher education to be based on degrees awarded, not enrollment.


February 25, 2014

President Obama will announce Tuesday the opening of two new "manufacturing innovation instititues" in the Detroit and Chicago areas that pair research universities with private sector firms.

The administration will provide $140 million for the two centers, and non-federal sources will provide an additional $140 million, according to a White House official. The goal of the institutes, the White House said, is to bridge the gap between applied research and manufacturing product development.

One of the institutes will be headquartered in the Detroit area and will focus on lightweight and modern metals manufacturing. The center will pair 34 companies with nine universities and labs: Colorado School of Mines, Michigan State University, Michigan Tech University, The Ohio State University, University of Kentucky, University of Michigan, University of Notre Dame, University of Tennessee, and Wayne State University. Columbus State Community College, Ivy Tech, Macomb Community College, and Pellissippi State Community College are also involved in the partnership.

A second institute for digital manufacturing and design innovation will be based in Chicago and led by UI Labs, a nonprofit research organization at the University of Illinois. The consortium includes 41 companies and 23 universities and labs: University of Colorado Boulder, Illinois Institute of Technology, Indiana University, Iowa State University, Missouri University of Science and Technology, Northern Illinois University, Northwestern University, Notre Dame, Oregon State, Purdue University, Rochester Institute of Technology, Southern Illinois University, University of Chicago, University of Illinois at Chicago, University of Illinois at Urbana - Champaign, University of Iowa, University of Louisville, University of Michigan, University of Nebraska- Lincoln, University of Northern Iowa, University of Texas – Austin, University of Wisconsin – Madison, and Western Illinois University.

The administration has proposed federal funding to create a network of 45 similar institutes, but Congress has not approved that plan. Last year, the Obama administration used its executive authority to use existing funding across five federal agencies in order to provide $200 million to establish three institutions. The first institute, an electronics manufacturing center in Raleigh, N.C., was announced last month, and the administration previously set up a pilot site in Youngstown, Ohio.


February 25, 2014

Amherst College and the Federal Bureau of Investigation are renewing a search for a painting stolen in 1975, the Associated Press reported. Three paintings were stolen at that time and two were recovered in 1989. But college officials and the FBI hope that publicity will produce leads to the whereabouts of the third work stolen, "Interior with Figures Smoking and Drinking," by the Dutch artist Jan Baptist Lambrechts, believed to have been painted in the early 18th century.


February 25, 2014

Rutgers University, already the most prolific subsidizer of sports of all Division I public institutions, gave its athletics department nearly $47 million in 2012-13, USA Today reported, a 67.9 percent increase over the 2011-12 subsidy of $27.9 million. Rutgers athletics is $79 million in the red, but officials say that the university’s move to the Big Ten Conference will generate close to $200 million over its first 12 years as a member. The most recent subsidies make up 59.9 percent of the athletics department’s total allocations, and total more than the entire operating revenues at all but 53 of Division I’s 228 public sports programs.


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