Higher Ed Watch

A Blog from New America's Higher Education Initiative

Five Things to Know about the Students First Act

  • By
  • Stephen Burd
March 13, 2013

As I wrote on Tuesday at Higher Ed Watch, the recently introduced “Students First Act” would require the U.S. Department of Education to automatically conduct program reviews of colleges that are most at risk of violating federal law. But this is only one way in which the bill, which was sponsored by Democratic Senators Frank Lautenberg of New Jersey and Tom Harkin of Iowa, would strengthen the tools that the Education Department employs to protect the integrity of the federal student aid programs and safeguard students from unscrupulous schools. Here are some key features that would greatly enhance the Department’s oversight and enforcement authority and provide relief to students who have been harmed.

The bill would:

  • Hold School Executives Accountable for Compliance

Under the measure, college presidents, chief executive officers, and chief financial officers would personally sign the student aid program participation agreements that the Education Department enters with their schools. They then would be held liable if their schools “knowingly and willfully” violated the agreements, or engaged in “gross negligence.” In such cases, these officials would be fined an amount equal to their yearly compensation, and they would be barred from working at another college that participates in the federal financial aid programs for at least five years.

California's Groundbreaking State Online Higher Education Plan

  • By
  • Kevin Carey
March 12, 2013

California is currently home to two of the most important things happening in higher education, one good, one bad. The good thing is the rapid advancement of cheap and free online courses offered by companies like Udacity and Coursera. The bad thing is the catastrophic failure of California lawmakers to provide enough money to support basic access to foundational courses at community colleges. Tomorrow, California Senate President pro Tem Darrell Steinberg will announce a plan that essentially tries to use the one to fix the other. This groundbreaking initiative has broad implications for the nature, financing, and regulation of higher learning.

As of today nearly half a million students are on waiting lists for basic courses in California’s public higher education system, increasing the cost and duration of college and reducing the number of students who ultimately earn degrees. This is a human tragedy and a policy failure on a massive scale. Under the plan, waitlisted students would be able to take online classes that have been approved by California’s Open Education Resources Council, a faculty-led body that was created by recent Steinberg-sponsored legislation creating free open textbooks. ACE certification would be a point in course's favor. Students would have to take in-person proctored exams to pass the courses. Public colleges and universities in California would be required to accept those courses for credit.

A Gut Check for the Education Department

  • By
  • Stephen Burd
March 12, 2013

Does the U.S. Department of Education have the guts to enforce its own federal student aid program integrity rules? Judging by the Department’s record and legislation recently introduced by Senate Democrats, entitled the “Students First Act,” the answer to that question appears to be “No.”

During President Obama’s first term, administration officials went to great lengths – and spent a substantial amount of political capital – to strengthen the agency’s authority to crack down on schools that deliberately mislead students into enrolling. Yet, the Department has shied away from using these expanded powers, even when evidence of abuse has been delivered to the agency on a silver platter.

Career Education Corporation is a case in point. In the fall of 2011, the publicly-traded for-profit higher education company revealed that a significant number of its schools had been cooking the books on the job placement rates they were disclosing to prospective students. But despite this remarkable admission, the company didn’t receive even a slap on the wrist from the Department.

Syllabus: Week of March 3, 2013

  • By
  • Rachel Fishman
March 8, 2013
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Welcome to the Syllabus, a weekly guide that provides insight into what’s happening in higher education.

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Poor Scholars Hit by Money Squeeze From Wealthy Colleges, Janet Lorin
Bloomberg

It’s the classic game of bait and switch: Low-income student gets accepted to a selective, high-tuition/high-aid college, only to have institutional aid taken away once awarded an outside scholarship. This practice, known as displacement, reduces the grant aid awarded to students who win outside scholarships, giving aid to other students. Furthermore, many students find they can’t apply their scholarship funds to summer savings requirements. At Barnard, for example, students must save about $2,200 over the summer to help cover costs of their education that cannot be covered by scholarships. The National Scholarship Providers Association, a group whose 320 members include the Gates, Coca-Cola Scholars, and Michael & Susan Dell Foundations, argues that if a college rescinds funding because of outside scholarships, it “takes away a reward that the student earned through hard work and concentrated effort.”

Preserving Need-Blind Admissions Comes at a Price at Grinnell

  • By
  • Stephen Burd
February 28, 2013

When it comes to private colleges enrolling and supporting low-income students, Grinnell College has been one of the best. Nearly a quarter of its students receive Pell Grants, and the lowest-income students have to take on only a relatively small amount of debt to receive a top-notch liberal arts education.

That’s why it is so disheartening to hear that Grinnell plans to become more aggressive in using so-called “merit” aid for the explicit purpose of recruiting wealthy students. According to college’s president Raynard Kington, this is the price Grinnell will have to pay for maintaining its need-blind admissions policy for the next two years.

Last year, Grinnell’s board raised alarms on campus when it announced that it was considering abandoning its costly policy of admitting students regardless of their financial need. But after months of heated discussions among students, faculty, administrators, and alumni, the board relented and agreed to allow the practice to continue for another couple of years. In return, however, the school must “find a way to curb growth in its discount rate (the percentage of sticker price provided by the college in aid, on average) and to reduce the share of its operating budget paid by the endowment,” according to Inside Higher Ed. They need to, in other words, bring in more students who can pay full freight.

Syllabus: Week of February 17

  • By
  • Rachel Fishman
February 22, 2013
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Welcome to the Syllabus, a weekly guide that provides insight into what’s happening in higher education.

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Obama, Rubio Put Higher Education on Notice, David Wessel
The Wall Street Journal

Senator Marco Rubio and President Barack Obama may not agree on much these days, but they do agree that the way the federal government spends money on student aid needs to change. In this year’s State of the Union, President Obama called for incorporating measures of value and affordability into higher education’s accreditation system or establishing a path to alternative accreditation for nontraditional providers. Senator Rubio, in his response to the State of the Union, said, “We need student aid that does not discriminate against programs that nontraditional students rely on—like online courses or degree programs that give you credit for work experience.” While it is unclear how and when accreditation could be changed, something needs to update the archaic 19th century practice and bring it to the 21st century. “The focus by Mr. Obama and Mr. Rubio on accreditation suggests a worry that the old system could stifle innovation,” writes Wessel, “And prevent competition from new, perhaps more efficient forms of teaching.”

Free Money for Graduate Students Won't Go Unnoticed

  • By
  • Jason Delisle
  • Alex Holt
February 21, 2013

Last year, we demonstrated in painstaking detail that the Obama administration’s new Income-Based Repayment (new IBR) program for federal student loans, known as Pay-As-You-Earn, will be a boon to graduate students and the schools that enroll them. Because graduate students can take out federal student loans to pay for the full costs of their educations (including living expenses) using the Grad PLUS program, even students who go on to earn six-figure incomes will qualify for low payments under IBR and have substantial debt forgiven after 20 years.

Some observers might dismiss those warnings, arguing that such outcomes are outliers, something that will happen very rarely. But there are plenty of reasons why the new IBR’s graduate school benefits won’t go unnoticed or unused.

Read the full post at Ed Money Watch.

The Academic Graveyard Shift: A Thin-Crust Guy’s Faculty

  • By
  • Andrew Lounder
February 20, 2013
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Starting in 2014, the Affordable Care Act (ACA) mandates that employers with more than 50 employees must provide health insurance to those working more than 30 hours per week. To prevent having to give their employees proper benefits, Papa John’s Pizza voiced intent to cut the hours of employees to fall just below the 30 hour threshold.  Customers expressed reprehension at the prospect of the pizza giant further limiting the earnings of its lowest income employees in the name of corporate revenue. The public backlash was so powerful that Papa John’s founder and CEO, John Schnatter walked back his loophole planning, but it remains to be seen whether universities—American cultural bastions of fairness and opportunity—will fare differently. The government has hedged on behalf of adjuncts, but the question of whether and to what degree universities will ultimately be allowed to implement similar plans to fudge compliance with the ACA remains unresolved.

Syllabus: Week of February 10

  • By
  • Rachel Fishman
February 15, 2013
President Obama

Welcome to the Syllabus, a weekly guide that provides insight into what’s happening in higher education.

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President Obama gave his State of the Union address on Tuesday and higher education played a feature role. “Tonight, I ask Congress to change the Higher Education Act, so that affordability and value are included in determining which colleges receive certain types of federal aid,” President Obama said, “And tomorrow, my administration will release a new ‘College Scorecard’ that parents and students can use to compare schools based on simple criteria: Where you can get the most bang for your educational buck.”

But what does this mean for higher education?

One Thing Obama and Rubio Agree on: Higher Education Innovation

  • By
  • Kevin Carey
February 13, 2013

This post ran first on the Future Tense blog.

The opposition response to the State of the Union is normally a time to denounce the president and all his works. For the most part, Sen. Marco Rubio, R-Fla., kept to form last night, repeatedly slamming Barack Obama for his big government, job-killing agenda. But there was one area in which, perhaps without realizing it, Rubio and Obama agree: They both want to unleash a wave of innovation that could transform American higher education and finally bring the eternal problem of rising college prices to heel.

In his speech, Obama put colleges on notice about “skyrocketing costs [that] price way too many young people out of a higher education, or saddle them with unsustainable debt.” The blame, the president said, lies on campus. “Taxpayers cannot continue to subsidize the soaring cost of higher education. Colleges must do their part to keep costs down.”

But Obama’s truly revolutionary proposal was kept inside the more detailed policy agenda released by the White House directly after the speech. The administration proposed “establishing a new, alternative system of accreditation that would provide pathways for higher education models and colleges to receive federal student aid based on performance and results.” The existing accreditation system is a cabal of incumbent colleges and universities that controls access to the $140 billion that the federal government disburses to college students every year in grants and loans. Breaking up this monopoly would have far-reaching effects on the higher education market. Most importantly, it would create a level financial playing field for firms that provider higher education services but aren’t “colleges” in the traditional sense of the word.

Rubio’s response? He wants to do exactly the same thing. “We need student aid that does not discriminate against programs that non-traditional students rely on,” said Rubio, “like online courses, or degree programs that give you credit for work experience.”

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