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On September 14, 2012, the House of Representatives approved a $1.047 trillion six-month Continuing Resolution for FY 2013, by a vote of 329 to 91, that would keep the Federal government open through March 27, 2013 or until final appropriations legislation can be passed. The Senate voted in the early morning of Saturday, September 22, 2012, by a vote of 62 to 30, to approve the Continuing Resolution. The President is expected to sign the bill. The current appropriations were set to expire on September 30, 2012.
As part of the bipartisan compromise, no significant policy riders were attached to the bill, including higher education. Appropriators had been debating the House and Senate versions of the appropriations bills. The Senate version would have restored a “pathway for student” without high school diplomas to receive federal aid, and the House version would have prevented the Department of Education from enforcing the gainful employment requirement. However, these provisions were excluded from the compromise bill that was passed.
In accordance with the Budget Control Act of 2011, the Continuing Resolution adheres to the top line budget figure, which is an increase of about $8 billion over FY 2012, representing an across-the-board increase of 0.612 percent over the base rate for all government programs. The annual rate that the federal government would be funded is $1.047 trillion.
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On September 13, 2012, Senator Richard Blumenthal (D-CT) introduced S. 3550, the Advancing College Choice and Ethics to Protect Taxpayers Act of 2012, which seeks to amend the Higher Education Act of 1965, as amended (HEA), to protect students from deceptive practices and high pressure sales by institutions of higher education to provide a waiting period for students to make enrollment decisions, to guard against misrepresentation and to standardize and elevate institutional disclosures.
S. 3550 calls for a standardized disclosure sheet, which will include the following information:
- Average cost of attendance and net price;
- Information on the institution’s net price calculator, average net price for students receiving Title IV, disaggregated by family income, and percentage of students receiving grant aid;
- An institution’s cohort default rate;
- Average federal student loan debt of graduates;
- Transfer-out rate if the institution’s mission includes preparing students to enroll in another eligible institution, or retention rate, if its mission is otherwise; and
- Information on completion/graduation rate.
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On September 13, 2012, Congressmen John Tierney (D-MA) and George Miller (D-CA) introduced the College Student Rebate Act of 2012, H.R. 6407, a bill to ensure that taxpayer and student dollars go to education and not CEO pockets or advertising accounts. According to the press release, “[t]he bill would require for-profit postsecondary institutions to dedicate at least 80 percent of their total revenue to educational expenses or provide rebates to student, taxpayers or both. As college costs continue to rise, this bill helps ensure that we are investing in a high-quality education rather than profits or deceptive marketing.”
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On September 12, 2012, the Senate Veterans’ Affairs Committee approved an amended package of bills, including S. 2241, the GI Bill Consumer Awareness Act of 2012. The Ranking Member, Senator Richard Burr (R-NC) stated some of the following concerns about S. 2241:
- S. 2241 was drafted without the benefit of input from the Minority, the Department of Veterans Affairs, or the higher education groups;
- The bill was considered without an analysis of the cost;
- The onerous, burdensome disclosure requirements encroach on the jurisdiction of the Health, Education, Labor and Pensions (HELP) Committee and are already included in the Higher Education Act (HEA).
The American Council on Education (ACE) sent a letter to the Chair and Ranking Member expressing their concerns, which Senator Burr read aloud as part of the markup record. ACE expressed its support of any efforts to protect veterans from fraudulent and unduly aggressive recruiting practices occurring at a “subset of institutions,” however, ACE stated that S. 2241 calls on institutions to provide detailed data not currently collected by institutions. S. 2241 also would require institutions to provide an explanation of transfer of credit policies including whether credits awarded are transferable to other public institutions in the state and whether the institution awards credit for prior military experience. ACE pointed out that institutions are already required to disclose their transfer of credit policies under section 485(a) of the HEA and the awarding of transfer credit is a “highly complex and individualized determination.”
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On September 20, 2012, the House Subcommittee on Higher Education and Training, chaired by Congresswoman Virginia Foxx (R-NC), held a hearing titled, “Assessing College Data: Helping to Provide Valuable Information to Students, Institutions, and Taxpayers.” In preparation for the next reauthorization of the HEA, the hearing explored whether the federal higher education data collection system is appropriately serving students, taxpayers, and institutions.
Congresswoman Foxx opened the hearing by stating: “Without a doubt, the 2008 reauthorization of the Higher Education Act started a process of enhancing higher education transparency. But as tuition continues to rise at an astonishing pace, it is clear more work must be done to help students and families make informed choices about their higher education options without overburdening institutions with counterproductive red tape.” Ranking Member Rubén Hinojsoa (D-TX) stated that the data that institutions collect help students and their families make informed decisions about colleges.
During the hearing, higher education experts discussed their concerns about the current federal higher education data collection system. American Institutes for Research Vice President Dr. Mark Schneider said: “IPEDS would be a pretty good data system for the 1950s, but IPEDS is flawed – perhaps fatally so – given our current system of higher education.” Dr. Schneider pointed out that “[t]he fixation on first-time, full-time students makes no sense for the world we live in.” Dr. Schneider said that the reauthorization of the HEA “is an ideal opportunity for Congress to start cleaning out the IPEDS attic.”
Dr. Tracy Fitzsimmons, President of Shenandoah University, offered visual confirmation of the burden by demonstrating the reams of paper needed to disclose information to the public. Dr. Fitzsimmons said: “I don’t disagree with the view that there are some important data points we might place in front of prospective students…[But] if we don’t keep it simple, we have accomplished nothing but more costs for colleges and more confusion for the student.” Dr. James Hallmark, Vice President of Texas A&M University System, said: “The solution is not to avoid data reporting, but rather to do so wisely…” Dr. Hallmark identified retention rates, numbers of graduates and graduation rates with a focus on both traditional and nontraditional students as key data the federal government should collect. Others testified that critical data included completion rates, progression rates, student success in the labor market, knowing data at the program level, and financial aid status information.
Congresswoman Foxx pointed out that of the 7,000 colleges and universities in this country, they spent 800,000 hours and $28 million in 2011-2012 just filling out the requirements for the Department of Education’s data base.
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On September 28, 2012, the Department of Education released the official FY 2010 two-year and the official FY 2009 three-year cohort default rates. This is the first official three-year cohort default rate, which was 13.4 percent nationally for the FY 2009 cohort, a slight decrease from the trial three-year cohort default rate of 13.8 percent for the FY 2008 cohort. For-profit institutions had the highest average three-year cohort default rates at 22.7 percent, with public institutions following at 11 percent, and private nonprofit institutions at 7.5 percent.
The national two-year cohort default rate increased to 9.1 percent from 8.8 percent in FY 2009. The two-year cohort default rates increased over last year’s rates for both the public and private non-profit sectors, increasing from 7.2 percent to 8.3 percent for public institutions and from 4.6 percent to 5.2 percent for private non-profit institutions. Cohort default rates decreased for for-profit institutions from 15.0 percent to 12.9 percent.
Two schools are subject to sanctions for having two-year cohort default rates of 25 percent or more for three consecutive years: Centro de Estudios Multidisciplinarios in San Juan, Puerto Rico and Tidewater Tech in Norfolk, VA. As a result, these schools face a loss of eligibility in federal student aid programs unless they submit successful appeals. No sanctions will be applied based on the three-year cohort default rates until three annual official rates have been calculated, which would be in 2014. However, 218 schools have three-year cohort default rates of over 30 percent.
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Section 487(d)(4) of the Higher Education Act of 1965, as amended, requires the Secretary to annually submit a report to Congress containing information regarding the amount and percentage of each proprietary institution’s revenues from Title IV sources and non-Title IV sources as provided by the institution in its audited financial statements. The reports are sent to the Chairmen and Ranking Members of the House and Senate authorizing committees.
On August 30, 2012, Acting Assistant Secretary David Bergeron transmitted the information for the July 1, 2010 to June 30, 2011, reporting period. The data show that 15 institutions failed to satisfy the 90/10 rule during the reporting period. Three of the 15 institutions have had two consecutive years of missing the required ratio and have lost eligibility to participate in the Title IV programs.
The full report and access to the 90/10 transmittal letters, summary charts and reports for institutions are available on the Federal Student Aid Data Center website.
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On September 27, 2012, Secretary of Education Arne Duncan indicated to the National Journal that he would remain in his position if President Obama were elected for a second term. “I am staying until the President gets sick of me.”
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On September 24, 2012, the Department of Education announced the new “MyStudentData Download” button (originally it was called the “MyData” button) on the NSLDS Student Access website. The MyStudentData Download button will allow students to download their loan, grant, enrollment and overpayment information from the National Student Loan Data System (NSLDS) into a machine-readable, plain text file. The downloaded file can then be viewed, printed, and saved on a hard drive.
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On September 28, 2012, the Department of Education issued an electronic announcement on the implementation of the Financial Aid Shopping Sheet. The electronic announcement provides institutions and their software providers HTML specifications to produce and populate the Shopping Sheet. The HTML includes a “download” button on the Shopping Sheet to allow prospective students to download their aid offer into a machine readable format (XML). The XML is also attached. The Department will provide the institutional metrics, specifically graduation rate, loan default rate, and median borrowing figures in the coming months.
The electronic announcement reminds institutions that the Shopping Sheet may be used to supplement or replace an institution’s existing award letter. The Shopping Sheet must be used to meet the disclosure requirements to service members and veterans under Executive Order 13607.
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On September 25, 2012, the Department of Education announced that 316 institutions have voluntarily adopted the Financial Aid Shopping Sheet for the 2013-2014 school year. “Our goal is to help students arrive at school each fall less worried about how they will pay for college, and more focused on how they will complete college,” according to Secretary of Education Arne Duncan. “Institutions share that goal, and many have shown their support by joining their colleagues across the country that have already agreed to adopt the Shopping Sheet. The Shopping Sheet will make it dramatically easier for students to both understand and compare costs at different institutions-and ultimately enroll in the college that is best fit for them.”
In addition to the more than 300 institutions that have already committed to providing the Shopping Sheet to their students, colleges that sign on to the Principles of Excellence for Serving Military and Veterans will also begin using the form for the 2013-2014 school year.
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According to a Pew Research Center report of government data, about one out of five, or 19 percent, of the nation’s households owed student loan debt in 2010, which is a 15 percent rise since 2007. Since 2007, student debt has increased in nearly every demographic and economic category, as has the size of the debt. Among households owing student debt, the outstanding student loan balance increased from $23,349 in 2007 to $26,682 in 2010.
While every income group had more total student loan debt in 2010 than in 2007, the increases were greatest in the lowest fifth of households by annual income and in the highest fifth by annual income than in the middle three-fifths. In 2010, the least affluent fifth of the households owed 13 percent of the outstanding student debt as compared to 11 percent in 2007. The share of outstanding student debt owed by the richest fifth of the households rose 28 percent in 2007 as compared to 31 percent in 2010.
Student loan debt is growing as compared to other debts in the households, such as property-related debt, credit card debt, and all installment debt. Student debt rose to 5 percent of all debts in 2010 from 3 percent of all debts in 2007.
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On October 3, 2012, the Institute for College Access & Success released a report on a review of almost 50 randomly selected colleges’ net price calculators. The report titled “Adding It All Up 2012: Are College Net Price Calculators Easy to Find, Use, and Compare?” found that nearly a year after the federal requirement went into effect, “consumers can’t count on net price calculators’ being easy to find, use, or compare.”
Some of the report’s findings are:
- Nearly 25 percent of the colleges in the sample did not have a link to their calculator on their website’s financial aid or costs page. Even when the link was on a relevant page, it was difficult to find. Three of the 50 colleges in the sample did not have a net price calculator.
- The number of questions asked by the calculators ranged from eight to about 70. More than one-third asked for information that students and parents would not be able to provide without digging up detailed financial records. The majority of the calculators in the sample did not tell students how their information would be used.
- Some colleges subtracted loans and work from the net price estimate, frequently making the resulting lower dollar figure more prominent than the required net price figure. Forty percent of calculators in the sample provided cost estimates for academic years as far back as 2008-2009 and 2009-2010.
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On October 6, 2012, The Chronicle of Higher Education published a study it conducted with ProPublica on the Parent PLUS Loan Program. The article, titled, “The Parent Loan Trap,” highlights Parent PLUS Loan borrowers who are struggling to repay the college loans they have taken out for their son or daughter. Last year, the Department of Education disbursed $10.6 billion in Parent PLUS Loans to almost one million families, which is about $6.3 billion more than was disbursed in 2000 (adjusted for inflation). One of the reasons for the increase in Parent PLUS Loans is that the loans are easy to obtain because ED does not check credit history, assess the borrower’s ability to repay, or check current debt obligations or income.
The article explains that when it comes to repaying Parent PLUS Loans, the Department takes a hard line, as PLUS Loans are not dischargeable, can be repaid through seizure of tax refunds, garnished wages or Social Security, and carry few repayment options. While ED does not publish default rates for the PLUS Loan Program, the Department estimates that for all Parent PLUS Loans originated in the 2011 fiscal year, about 9.4 percent will default over the next 20 years.
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The National Center for Education Statistics (NCES) has released a new report titled “Enrollment in Postsecondary Institutions, Fall 2011; Financial Statistics, Fiscal Year 2011; and Graduation Rates, Selected Cohorts, 2003-2008” that provides preliminary findings on postsecondary enrollment and student aid from the spring 2012 data collection of the Integrated Postsecondary Education Data System (IPEDS). The report found that by extending the time, students were tracked for program completion from within 100 percent of normal time to within 200 percent of normal time, graduation rates for undergraduate students who were full-time, first-time students in 2007 increased from 21 percent to 37 percent at two-year institutions and from 46 percent to 69 percent at less-than-two-year institutions.
Other findings include:
- In the fall 2011, Title IV institutions enrolled 18.6 million undergraduates and 2.9 million graduate students. Of the 18.6 million undergraduates, 57 percent were enrolled in four-year institutions, 41 percent were enrolled in two-year institutions, and 2 percent were enrolled in less-than-two-year institutions.
- The 18.62 million undergraduate enrollment for the fall 2011 was down from the 18.65 million undergraduate enrollment in the fall 2010. Graduate school enrollment also fell from 2.93 million students in the fall 2011 from 2.94 million students in the fall 2010.
- About 59 percent of full-time, first-time undergraduate students at four-year institutions in 2005, who were seeking a bachelor’s or equivalent degree, completed a bachelor’s or equivalent degree within six years at the institution where they began their studies.
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