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Category: Higher Ed News

Obama administration announces plan to expand Pell Grant program

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The Obama administration has introduced a plan to bring back year-round Pell Grants and to create a $300 bonus for Pell recipients taking at least 15 credits a semester. Both elements of the plan are designed to incentivize students to graduate faster and accrue less debt in school. The plan would cost $2 billion over the next year,

The year-round Pell Grant program was initially put in place by President Bush in 2008 but was cut in 2011 as a budget-saving measure. While the effort to reinstate the program will likely face significant Congressional opposition, there is some bipartisan support. Senator Lamar Alexander (R-LA), Chair of the Senate education committee, and Democratic Senator Michael Bennet of Colorado are cosponsoring legislation to reintroduce year-round Pell Grants. “We have long supported providing students a more flexible Pell Grant program and hope this is one of many areas Congress and the administration can work together to strengthen higher education,” a Republican education committee spokesman Even with this bipartisan support, however, the administration faces a difficult task in getting the legislation through a very budget-conscious Congress.

The $300 bonus, dubbed 鈥�15 to finish鈥� by education non-profits, is also somewhat controversial, though the division is between a different set of stakeholders than the Pell Grant expansion. Many college completion non-profits support 15 to finish, saying that encouraging 15 credit semesters is an important tool in incentivizing Pell recipients to graduate on time. The plan has drawn criticism, however, from community college leaders and adult student advocates, who contend that 15 credits is too many for students who are busy working or who have come into higher education unprepared for college-level work.

See the for further information on the Pell Grant proposal.

New York expands student loan forgiveness program to include lower earners

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New York state has recently instituted the 鈥淕et on Your Feet鈥� loan forgiveness program in an effort to keep young college graduates living and working in the state. The program, originally introduced as a part of Governor Cuomo鈥檚 2015 Opportunity Agenda, is designed to help struggling recent graduates in the state pay back their student loan debt. Get on Your Feet is the most recent extension of NY state鈥檚 financial aid to its college graduates, which includes loan forgiveness for several public service professions and need-based with awards of up to $5,165.

There are a number of eligibility stipulations for the program, including that the graduate be enrolled in the federal Income-Based Repayment plan or the Pay As You Earn plan, that they are making less than $50,000 per year, that they work and have graduated in-state, and that they have received their degree during or after the 2014-15 academic year. Get on Your Feet also only applies to federal loans; private loans are ineligible for relief through the program.

The plan, which has been covered by , , , and the , is not without controversy 鈥� recent graduates who do not qualify for Get on Your Feet are upset because they feel they are paying for others鈥� college costs while reaping none of the benefits of the loan forgiveness. The program is financed through the state鈥檚 General Fund, for which the primary sources of revenue are in-state taxes.

The Washington Post lists some of the other states that have forms of student loan forgiveness. Forty-five states and the District of Columbia offer some form of loan forgiveness for its residents, according to the article, but New York is the only state that specifically targets lower-income graduates. Most programs in other states are concentrated in public-service industries; health, social work, teaching, and public law.

Washington state provides聽health-care professionals with loan forgiveness of up to $70,000 over two years (details ) and also gives financial assistance in the form of the (SNG), which聽distributes financial aid awards up to the price of in-state undergraduate tuition鈥�$10,344 at UW鈥攆or Washington residents whose families meet the minimum income requirements.

Unfortunately, , 3,500 of whom attend the UW, are eligible to benefit from the SNG but do not because the program has not received sufficient funding from the state.

 

 

Higher Ed News Roundup

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A recent report released by the Organization for Economic Cooperation and Development (OECD) reveals that the United States continues to fall behind in educating its populace. The study shows that the US has dropped to fifth in the percentage of young adults, defined as those between age 25 and 34, who have some sort of higher education degree (46 percent). This drop comes despite the Obama administration鈥檚 stated goal of having the highest proportion of young adults with degrees in the world by 2020. The report also noted that the percentage of students who leave their home countries for college in the US has dropped significantly since 2000, from 25 percent to 19 percent, with more students opting for the UK, Japan and Australia than ever before.

Income-based repayment now most popular higher ed federal aid program: The U.S. Department of Education reports that more student debt is now being repaid through the Income-Based Repayment (IBR) Plan and the Pay as You Earn (PAYE) Plan鈥攁nother form of income-based repayment鈥攖han any other type of repayment. The combination of IBR and PAYE accounts for $188 billion out of a total of $586 billion, a dramatic increase from past years; the percentage of loan dollars in these two programs has doubled since 2013. According to Jason Delisle at edcentral.org (article linked to above), this is both good and bad news. On the one hand, it seems that more students are learning of income-driven repayment plans and are attracted to the affordability they offer. On the other hand, it could be that more borrowers are not expecting to get jobs that would allow them to afford more traditional loan repayment programs.

19.3 million students enrolled in higher education institutions in fall 2015, 340,000 fewer than enrolled in fall 2014, according to released by the National Student Clearinghouse. The drop was most pronounced among for-profit institutions, which saw a decline of over 180,000 enrollees from 2014, and among community colleges, at which 145,000 fewer students enrolled. Given the demographics of the students who are choosing not to enroll鈥攑rimarily full-time community college students and students over the age of 24鈥攔esearchers have attributed the drop in enrollment largely to the improving job market. The enrollment levels of public and private 4-year institutions stayed largely the same; for information about enrollment trends at the UW, please visit 91探花Profiles鈥� enrollment dashboard.

DOJ reaches largest-ever settlement with for-profit higher education provider

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U.S. Attorney General Loretta Lynch that the Department of Justice (DOJ) has reached a settlement in its false claims case against the Education Management Corporation (EDMC), an operator of for-profit colleges and universities. The $95.5 million settlement is the largest ever in a higher education false claims case. EDMC will also forgive a total of $102.8 million in loans to over 80,000 students who attended its schools, which include Argosy University, the Art Institutes, Brown Mackie College, and South University, between 2006 and 2014.

The lawsuit was originally filed in 2007 by whistle-blowers within EDMC, who alleged that the organization was offering extra incentives to their admissions officers based on the number of students they enroll, a violation of the in the Higher Education Act. Said Attorney General Lynch in her statement, 鈥淓DMC鈥檚 actions were not only a betrayal of their students鈥� trust; they were a violation of federal law.鈥�

Reactions to the settlement have been mixed.听While it is encouraging to see the DOJ take action against illegal and unethical practices at for-profit institutions, many student and consumer advocates have criticized the settlement for providing too little relief for students who accrued thousands of dollars of federal student loan debt at EDMC institutions.

Secretary of Education Arne Duncan has indicated that his Department is willing to listen to claims from students who believe that EDMC mislead them when if offered loans, but critics of the deal say listening is not enough. “I am disappointed that the department鈥檚 only plan for EDMC students is to hear their complaints,” said Robyn Smith, a lawyer at the National Consumer Law Center, who was quoted in .听

Others have criticized the language of the settlement, which did not force EDMC to admit wrongdoing for its actions. Stephen Burd, a senior policy analyst at New America, laments the continued lack of accountability of聽for-profit institutions.

“Too many of these cases are settled without finding fault,” he said in the , “and the for-profit industry has been able to say, 鈥極h, nothing is proven.鈥�”

Despite its issues, this settlement is another step in the Federal Government鈥檚 continuing efforts to rein in the questionable behavior of for-profit colleges and universities. Last year, the Department of Education formed an interagency task force to more rigorously oversee for-profit institutions of higher learning. The Department of Defense also聽suspended all tuition assistance to聽the University of Phoenix, which targets veterans in its recruiting efforts.

UC Plans to Expand Resident Undergraduate Enrollment

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A recent story in the LA Times, 鈥溾�� outlined the University of California鈥檚 plan to expand resident undergraduate enrollment at their nine undergraduate campuses. Like many U.S. public universities that have faced significant state divestment during the recession, the UC system has enrolled more nonresident students in recent years to help cover funding cuts and keep resident tuition increases to a minimum. To adjust this trend, the California Legislature recently increased its investment in the UC system by $25 million to partially fund the enrollment of 5,000 additional resident undergraduate students by no later than 2016-17.听 To pay for an additional 5,000 enrollments proposed by UC, system President Janet Napolitano plans to phase out aid for low-income non-resident students and request additional funding from the California Legislature. Napolitano was quoted as assuming the legislature would 鈥渃ontinue to support access for California students.鈥�

According to the article, UC officials are now 鈥渨orking through the logistics of housing, laboratory availability, and classroom sizes.鈥� The increase in undergraduate students will also necessitate enrolling 600 more graduate students for instruction and lab support.

The 91探花 has faced similar financial pressures as a result of the recession, but remains committed to providing Washington students with affordable, quality higher education.

  • The 91探花continues to fully fund , which covers, at minimum,聽tuition and fees for resident undergraduate students who qualify for the Pell Grant or State Need Grant.
  • Since 2009-10, the 91探花has increased incoming enrollment of resident undergraduates by聽more than聽1000 students at its three campuses.
  • During the recession, the 91探花increased its contribution to institutional financial aid in order to maintain access for students with the most financial need.
  • The percentage of Pell-eligible students at the 91探花rose from less than 20 percent in 2007-08 to 29 percent in 2014-15.

With undergraduate students in the UC system, the plan would increase their undergraduate enrollment by over 5 percent. To achieve a similar overall increase, the 91探花would need to add approximately 2000 students and would face significant barriers in doing so. Unlike the UC system, 91探花does not provide need-based aid for non-resident undergraduate students, and thus would not be able to cut that non-resident aid funding to pay for additional resident enrollment. Additionally, all three campuses are nearly at capacity without significant capital investment.

Average National Undergraduate Loan Debt Continues To Rise

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Undergraduates who graduated with student loan debt from four-year colleges聽in 2014 owed an average of $28,950, according to a by The Institute for College Access and Success (TICAS).[1][2]聽69 percent of graduates have loan debt,聽the same figure as聽last year and slightly higher than it was in 2004 (65 percent). The average amount of debt per borrower is up 56 percent from 2004 – more than double the inflation rate over the same period – but only up 2 percent from 2013.

A number of factors have contributed to the rising student debt load over the past decade. States have decreased their investment in public higher education over the last ten years, causing students at public institutions to bear a higher percentage of the funding burden. Since 2004, the share of public higher education funding provided by states has dropped (from 62 percent to 51 percent) and the share paid by students and their families (in the form of tuition) has increased (from 32 percent to 43 percent).

In addition, the growth of Pell Grants has not kept up with rising costs. The TICAS report shows that between 2004 and 2012鈥攖he last year in which data is available鈥攔ecipients of Pell Grants at public four-year colleges saw average cost of attendance rise by $7,400 and聽grant aid rise by just $2,900. At private, non-profit colleges the gap is even wider; costs rose by $14,400 and grants increased by $8,700.

Washington state is performing well with regard to student loans: only 58 percent of Washington bachelor鈥檚 degree recipients who graduated in 2014 had loans, and those who聽did had an average of $24,804, more than $4,000 below the national average. The 91探花 also looks good by these metrics: thanks in large part to the University’s commitment to institutional aid through programs such as Husky Promise, less than half of all 91探花undergraduates who graduated in 2014 had student debt and the average debt burden was $21,558, well below the state and national averages.

While Washington鈥檚 performance relative to its peers is laudable, student debt is still a major issue for many students. The TICAS report offers a series of proposals to mitigate the student debt load, among them doubling the size of Pell Grants, simplifying income-driven repayment plans, and improving student loan servicing to make it easier for students to pay back their loans. It is important that policymakers remain focused on reducing the student debt burden and continue working with institutions to make higher education accessible and affordable for all students during and after graduation.

 

 

 

[1] It鈥檚 important to note that borrowing rates and debt levels vary widely by state, college and sector.

[2] Because the federal government does not require colleges to report debt levels for their graduates, data in the TICAS report is based on voluntary reporting by institutions. Hardly any for-profit colleges voluntarily report their graduates鈥� average debt, so this year鈥檚 debt figures are for public and nonprofit colleges only.

National 3-Year Cohort Default Rate Drops For Third Consecutive Year: 91探花Continues to Excel

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The Department of Education recently released their detailing the 3-year cohort default rate (CDR)鈥攁 metric that measures what percentage of postsecondary students default on their loan payments within the first three years of entering repayment鈥攁nd the data are encouraging: the 3-year CDR for FY 2012 is 11.8 percent, almost two percent lower than the previous year and three percent lower than FY 2010.

While reasons for the drop are uncertain, administration officials have credited the increased enrollment in income-based repayment plans as partially responsible. Secretary of Education Arne Duncan has cheered the lower default rate but cautions that there is more work to do. 鈥淭here鈥檚 no real reason why we can鈥檛 significantly reduce default rates even further,鈥� he told reporters in a statement . 鈥淲e鈥檙e going to keep working to hold schools accountable.鈥�

The report also breaks down the CDR by . Below is a breakdown of the most salient statistics.

National statistics:

  • Public four year institutions saw their 3-year CDR drop to 7.6 percent, down from 8.9 percent last year.
  • Private non-profit four year institutions鈥� default rate also dropped, to 6.3 percent from 7 percent.
  • Private for-profit four year institutions鈥� CDR dropped to 14.7 percent, down from 18.6 percent last year.

State statistics:

  • Schools in Washington state have an average 3-year default rate of 10.1 percent, slightly聽below the national average.
  • The 91探花 performed exceptionally well by this measure: the 3-year CDR for 91探花dropped to 2.7 percent, almost 5 percent lower than the national average for public four year universities and聽down from 4.3 percent last year.

As previously stated, the declining CDR average nationwide is a hopeful sign for the future of student loan repayment. Nevertheless, loans remain a massive strain on millions of college students and graduates and more must be done to alleviate the student debt burden. The CDR itself has come under fire as a flawed metric; it only measures those students who default on payments and does not take into account the who make payments but cannot make any progress on paying down their debt or the share of students at a given institution who borrow.听Some in the education policy world have called for using loan repayment rates, rather than default rates, as聽the primary metric for gauging an institution鈥檚 ability to prepare its students for repayment.

 

91探花is Most Innovative Public University in the World and 鈥淏est Bang for the Buck鈥� Among Western Schools

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recently ranked the 91探花as the fourth most innovative university in the world among public and private institutions, surpassed only by Stanford, MIT and Harvard.听 When looking at public institutions alone, however, the 91探花topped the list.

As the noted, 鈥淭he ranking takes into account academic papers, which indicate basic research performed at a university, and patent filings and successes, which point to an institution鈥檚 interest in protecting and commercializing its discoveries.鈥�

In addition to the innovation ranking, recently ranked 91探花Seattle as the #1 鈥淏est Bang for the Buck鈥� among Western institutions.听 Institutions are scored on 鈥溾�橬et鈥� (not sticker) price, how well they do graduating the students they admit, and whether those students go on to earn at least enough to pay off their loans.鈥澛� For more information about the 鈥淏est Bang for the Buck鈥� rankings, please see the .

Third House Committee Operating Budget Released Today

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Leadership in the House Appropriations Committee released a third operating budget proposal today in the form of and . This proposal still differs from the Senate budget proposal and varies from the previous House operating budget .

All of higher education (including financial aid) would receive nearly $3.348 billion (8.8 percent of near general fund appropriations). Under this proposal, the 91探花receives a total appropriation of $650.5 million, of which $598.19 million is from Near General Fund account.

Here are some of the key points from the House Budget () released today :

  • Tuition 鈥� This budget assumes tuition rates remain at the levels charged in 2012-2013. Funding is provided to freeze resident undergrad tuition in the first year; however, funding in the second year is provided in HB 2269 (see below).
  • Compensation Increase 鈥� This budget proposal is similar to prior proposals, authorizing a 3% and 1.8% for FY16 and 17 respectively; in addition, this budget provides limited funds for the UW鈥檚 contracts with SEIU and WFSE.
  • WWAMI 鈥� This budget contains a proviso to transfer $4.68 million a year from WSU to the 91探花to maintain WWAMI and support expansion of this program to 60 students.
  • O&M Funding – $1.762 million over the biennium to cover the Operating and maintenance cost of 91探花Bothell Discovery Hall which is the same as the House budget, but slightly higher than the Governors funding.

was introduced alongside the primary appropriations bill and would fund the following activities:

  • Medical Residencies 鈥� HB 2269 appropriates $8 million over the biennium for medical residencies.
  • Computer Science 鈥� This budget provides $8 million over the biennium to increase bachelor鈥檚 degrees awarded in computer science.
  • Computer Science Building 鈥� This budget appropriates $32 million over the biennium from State building construction account.

We anticipate significant activity this week and will post additional updates to the blog.

Report confirms continuing economic recovery and restoration of state funding for higher education

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announced its annual release of for FY14, which provides a comprehensive review of state and local funding, tuition revenue, and enrollment trends for public higher education.

National trends and Current status of state funding for higher education

On average, state and local support per full time equivalent (FTE) student was $6,552, a slight increase from $6,215 in 2013. Net tuition collections per FTE student is at $5,777, a 2.7 percent increase from 2013. Two rather interesting findings were highlighted in the report:

  • State and local support was 57.3 percent in 2014 as a share of per-student total educational revenue available to public institutions of higher education.
  • The explosive enrollment growth at public institutions from 2008 through 2011 tapered off in 2012 and is continuing in the downward trend. In 2014 enrollment fell another 1.3 percent from 2013.

Washington State compared to U.S Average

As a reminder, the SHEEO SHEF report combines community and technical college and college/university enrollment, state appropriations and tuition revenue for purposes of this report. In it, they found that enrollment (FTE) increased by 3.5 percent from 2009 to 2014, which is close to U.S. average (3.9 percent). They also found that public higher education in Washington improved in a number of other dimensions; including:

  • 15.3 percent increase in educational appropriations per FTE since 2013, higher than the U.S. average of 5.4 percent;
  • 3.7 percent increase in net tuition revenue per FTE from total educational revenue, higher than the U.S. average of 2.7 percent; and,
  • Total educational revenue per FTE increased by 9.4 percent, which was higher than the U.S. average of 4.1 percent.

However, two years of per-student funding increases might have meant that national average was on the path to exceeding pre-recession funding levels, which was not the case. Educational appropriations per student in FY14 remained 18.9 percent below 2008 pre-recession levels.

Read the full report for more data, analysis and methodological details.