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10 Higher Ed Questions for Arne Duncan

Published:  January 12, 2009

Education Secretary-Designate Arne Duncan will appear before the Senate Heath, Education, Labor, and Pensions Committee for his confirmation hearing on Tuesday morning. While Higher Ed Watch won't be there to grill Duncan, we do have some tough questions on higher education policy for the Chicago Public Schools chief. Feel free to suggest ones of your own.

(1) Do you believe that the federal student aid programs, as currently designed, are appropriately targeted and work both efficiently and effectively in expanding college access, or do you believe that the programs need to be overhauled to ensure that the doors of college remain open for low-income and working-class students?

(2) Do you expect the administration to continue supporting both the Direct and Guaranteed Student Loan Programs or instead push for a 100 percent Direct Lending model given research that shows this program is less costly to run?

(3) As currently designed, federal higher education tax credits disproportionately favor middle- and upper-income families and are largely unavailable to low-income families due to the fact that they are nonrefundable and have limitations on the costs that they cover (tuition and fees versus cost of attendance). Given that the federal student aid system was created to increase the enrollment rates of those who could not otherwise afford to attend, are tax credits an efficient way to deliver limited student aid resources? Has the administration given any thought to revamping the current tax credits so they are available to lower-income families? What steps do you anticipate taking to ensure that the President-elect's proposed American Opportunity Tax Credit is available to low-income students who may have trouble meeting the 100 hour service requirement due to family and work responsibilities?

(4) Over the last several years, the federal government has increasingly asked and expected families to save more for their children's college education, and more and more are doing so in 529 college savings plans. As currently designed, 529s disproportionately benefit higher-income families who can afford to save and who reap enormous tax benefits for doing so. Potentially building on some innovations in various states, what would you do to make 529s more progressive or more attractive to the millions of moderate- and middle-income families who find it hard to save for their children's education but very much want to?

(5) The College Cost Reduction and Access Act, signed into law in September 2007, included a new auction program to determine taxpayer subsidy levels paid to private lenders that make federal student loans. The auction program will apply to all federal Parent PLUS loans made in the 2009-2010 academic year and thereafter. Does the administration plan to implement the program as required under law, or will it seek changes to the program, or argue that it be postponed as some stakeholder interest groups have suggested?

(6) Studies have shown that a large percentage of students taking out private loans do not first exhaust their eligibility for cheaper federal student loan options. This can be extremely harmful to students, since private student loans almost always have much higher interest rates than federal loans and rarely provide repayment options that take into account income or public service. What do you think can be done to ensure that students first exhaust their cheaper federal student loan options before turning to private student loans?

(7) Private student loans currently enjoy a level of protection in bankruptcy court akin to unpaid taxes, child support, and government fines. In reality, they are more similar to a car or home loan, which is dischargeable during bankruptcy proceedings. This disparity in treatment creates an enormous burden for students who find themselves stuck with high-cost debt during tough financial times. Do you believe that more should be done to equalize the bankruptcy treatment of private student loans so that they are closer to other conventional types of consumer debt?

(8) Ever-increasing college prices are a major concern of American families. Some experts fear that college will be absolutely unaffordable for all but the most affluent within the next 25 years. Do you envision a proactive way for the federal government to do more to control college costs?

(9) According to budget officials at the Department, the Pell Grant program is facing a $4 to 5 billion shortfall in the coming year. Will attempting to close that gap prevent the administration from being able to fulfill its campaign promise to significantly increase the maximum Pell Grant?

(10) The Bush administration has been accused of turning a blind eye to allegations of corruption in the student loan industry. Will the Department of Education, under your leadership, make enforcement of student loan law and regulations a higher priority than it has been? How would you accomplish that?

Image used under a creative commons license from flickr user Obama-Biden Transition Project

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