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Higher Ed Watch

A Blog from New America's Higher Education Initiative

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Happy Holidays

December 22, 2009


Higher Ed Watch will be taking a break from publishing until Jan. 5. Happy Holidays to all and we'll see you in 2010.

Ed Dept's IG Sends a Shot Across the Bow of Accreditors

December 18, 2009

For years, for-profit colleges have pointed to the fact that they are accredited by independent agencies recognized by the U.S. Department of Education as proof that they provide a quality education. Why should they be subject to additional regulation when they have received the seal of approval from the august bodies that the federal government relies upon to ensure that students are being well served?

At Higher Ed Watch, we wish we could share the schools’ faith in the accreditation process. The truth is that accreditors have long had a dismal record of policing the proprietary schools they count as members. In case after case, these agencies have failed to take action against unscrupulous schools even when it is clear that abuses are occurring and students are being harmed.

On Thursday, the Education Department’s Inspector General sent a shot across the bow of the accreditors, warning that the government may no longer tolerate such lax oversight. In a move that sent shockwaves throughout the higher education establishment, the IG called on the Department to consider terminating the authority of the nation's largest regional accrediting agency over its decision to accredit a major for-profit university despite knowing that the institution had potentially violated the law and harmed students.

Catching Up With ECASLA

December 17, 2009
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The Ensuring Continued Access to Student Loans Act (ECASLA) is back in the news. The law, which has helped prop up the Federal Family Education Loan (FFEL) program in the wake of the credit crunch, is set to expire this summer, but some loan industry officials and Republican lawmakers are pushing Congress to extend it for another year. The Obama administration and Democratic Congressional leaders, who have proposed eliminating the FFEL program in favor of 100 percent direct lending, oppose an extension, saying it is unnecessary.

With this debate heating up, we thought it would be a good time to catch up on the ECASLA programs. With that in mind, Jason Delisle, the director of the Federal Education Budget Project at the New America Foundation, has updated an issue brief that our Education Policy Program published in January on the student loan purchase programs put in place under ECASLA. The paper provides a detailed description and explanation of the four loan purchased programs designed and implemented by the Department of Education. The updated version includes the latest data available on the volume of FFEL loans that the program has supported.

We hope that this updated report will be a valuable tool for policymakers, the newsmedia, and the public as the debate over the future of ECASLA and the federal student loan programs heats up in the new year.

Third Annual Academic Bowl Championship Series Rankings

December 16, 2009

By Ben Miller and Lindsey Luebchow

College football’s Bowl Championship Series (BCS) is in hot water again this year with five undefeated teams and still no playoff system to determine the national champion. It’s unsatisfying to fans—and apparently to members of Congress and the White House too—when a complicated series of computer rankings, coaches’ polls, and other metrics magically reward two squads. But there’s a much more unsettling story swept under the rug during these debates: the poor academic performance and embarrassing graduation rates of most of the country’s top 25 football schools.

It is with those concerns in mind that Higher Ed Watch has analyzed, for the third year in a row, the federal graduation statistics and Academic Progress Rates of the top gridiron teams. The blog’s goal is to find those teams that have players delivering both on the field and in the classroom—and those that leave too many of their players without a degree and with few career prospects.

So who would be contending for the crystal trophy in Pasadena, Calif., if the match-up was determined by academic performance? They may not be playing for the title, but Penn State and Stanford are the class of the BCS, according to Higher Ed Watch’s rankings of the top 25 college football teams.

With two-time champion Boston College dropping out of the rankings this year, Penn State’s Nittany Lions moved up from sharing the number two spot in last year’s ranking to take over the top spot. The Stanford Cardinal, which is making its Academic BCS debut thanks to an 8-4 season, takes the second spot as the only other squad to receive more than 100 points under Higher Ed Watch's calculation. These two teams are followed by Cincinnati (number four last year) and Boise State (eighth).

Meanwhile, this year’s top football contenders wouldn’t even come close to competing. In fact, the University of Texas, which is scheduled to face the University of Alabama in the title game, again comes in dead last in the rankings. The Longhorns have occupied the bottom rung now for the past two years, and only an appearance by the University of Hawaii in 2007 has kept them from the three-peat. Other poor performers are the University of Arizona, the University of Oregon, and Oregon State University.

As for the current defending champion University of Florida Gators, they will not be competing for the BCS title this year, but they can take some solace from the fact that their score increased 10 points in the rankings, moving them from 21st to 20th in the poll.

New Data Reveals Sky-High Default Rates at Career Colleges

December 15, 2009

A day after the U.S. Department of Education released three-year cohort default rates for federal student loans, for-profit college leaders and lobbyists are breathing a sigh of relief. Apparently their investors are too, judging by the rise in some of the education companies' stock prices yesterday. While the news was certainly not good, it wasn’t as bad as most of them had feared. After all, few of the largest publicly traded for-profit school chains (besides Corinthian Colleges, Kaplan University, and a couple of others) had campuses with default rates high enough to eventually put them in jeopardy of losing access to federal student aid.

But policy makers should not take false comfort in these numbers, as they clearly show the serious risks that many low-income and working-class students are taking by enrolling in for profit colleges. As we have seen, many of these students are left with little to show for their effort but a heap of debt that they can’t pay off.

Here’s a look at some of the most disturbing default rate numbers that were revealed yesterday:

Pell Grants: It’s Not the Shortfall, It’s the Funding

December 10, 2009

There’s buzz around Capitol Hill and within Washington’s education policy community that the Pell Grant program faces serious funding challenges. Much attention has incorrectly fallen on a possible “shortfall” in funding, which occurs when Congress accidentally underfunds the program one year and has to backfill it in the next. A close look at the numbers, however, suggests a shortfall isn’t the main cause for concern. The real funding challenge stems from increased student eligibility, college enrollment trends, and a higher maximum grant that have brought program costs from $14 billion in fiscal year 2008 to a projected $32 billion in 2011. In other words, at this rate Pell Grants will likely account for half of the entire discretionary budget of the U.S. Department of Education in 2011.

How did this come to be?

Five Reasons to Oppose the Student Loan Community Proposal

December 9, 2009

We are sorry to report that legislation that would eliminate the Federal Family Education Loan (FFEL) program remains stalled in the Senate, as debate on the health-care overhaul bill continues to drag on and on. Unfortunately, the delay appears to be working to the student loan industry’s advantage. Recent news media accounts indicate that some moderate Senate Democrats are flirting with an alternative “reform” proposal that industry officials have been shopping around Capitol Hill.

But no matter how the loan industry spins it, the “Student Loan Community Proposal” does not represent real reform. On the contrary, it aims to keep as much of the status quo in place as possible. As we said yesterday, loan industry officials ultimately want to be well-positioned should the political tide shift back in their favor.

It's Déjà Vu All Over Again for the Student Loan Industry

December 8, 2009

In their fight against legislation that would end the Federal Family Education Loan (FFEL) program, student loan industry officials have one overriding goal: to persuade lawmakers to keep as much of the current program in place until the political winds in Washington shift back in their favor. In adopting this approach, industry officials are essentially going back to the playbook that worked so well for them in the early 1990s, the last time the FFEL program faced possible elimination.

In 1993, a new, popular Democratic president came to power and quickly made reforming the federal student loan program a top priority. Within weeks of taking office, President Bill Clinton called on Congress to eliminate the FFEL program and replace it with a new program in which the U.S. Department of Education would provide federal loans directly to students through their colleges. The plan was met with fierce resistance from the student loan industry and its allies in Congress. Eventually, the Clinton administration and Democratic Congressional leaders bowed to the pressure and agreed to phase the program in gradually.

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