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On September 10, 2012, the House Committee on Appropriations released a $1.047 trillion bipartisan six-month Continuing Resolution (CR) for FY 2013 to keep the government running through March 27, 2013. The Continuing Resolution (H.J. Res. 117) is needed to avoid a government shutdown since Congress has failed to reach agreement on the twelve FY 2013 funding bills and the current CR expires at midnight of September 30, the end of the 2012 federal fiscal year.
The stop-gap spending bill for FY 2013 represents an across-the-board increase of 0.612 percent above FY 2012 levels or an additional $416.8 million being added to the Department of Education’s budget. The plan states that all programs should operate under the same terms and conditions as in FY 2012, which means that new programs would not be started and existing programs would not be eliminated. It also contains provisions extending the current pay freeze for federal employees, including members of congress. The Continuing Resolution does not contain any policy riders.
The House is expected to vote on the FY 2013 Continuing Resolution on September 13, 2012, while the Senate is expected to vote on it next week. Both houses are expected to pass the CR.
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On September 6, 2012, President Barack Obama officially accepted the Democratic nomination for the second term as President. During his remarks, the President described his education achievements over the last four years, including terminating student lending in the private sector and a renewed focus on college affordability. President Obama said: “No family should have to set aside a college acceptance letter because they don’t have the money.” He continued by stating that “[m]illions of students are paying less for college today because we finally took on a system that wasted billions of taxpayer dollars on banks and lenders.” The President also called on voters to help the Administration work with colleges and universities to cut in half the growth of tuition costs over the next ten years and give two million workers the chance to learn skills at their community college that will lead directly to a job, adding that he refuses to ask students to pay more for college.
During the Democratic National Convention, the Democrat party unveiled its party platform, “Moving America Forward,” which calls for greater access to higher education that will produce an economy that “out-educates the world.” The platform states that “To help keep college within reach for every student, Democrats took on banks to reform our student loan program, saving more than $60 billion by removing the banks acting as middlemen so we can better and more directly invest in students. To make college affordable for students of all backgrounds and confront the loan burden our students shoulder, we doubled our investment in Pell Grant scholarships and created the American Opportunity Tax Credit worth up to $10,000 over four years of college, and we’re creating avenues for students to manage their federal student loans so that their payments can be only 10 percent of what they make each month. President Obama has pledged to encourage colleges to keep their costs down by reducing federal aid for those that do not, investing in colleges that keep tuition affordable and provide good value, doubling the number of work-study jobs available to students, and continuing to ensure that students have access to federal loans with reasonable interest rates.” [In his speech of September 5, 2012, President Bill Clinton devoted several minutes in his address at the Democratic National Convention to “exploding college costs,” which increase college drop-out, and to President Obama’s solution of improving the income-based repayment program.]
The Democratic Party Platform responds to what the Democrats believe is Mitt Romney’s position, which is that students should “shop around” for the “best education they can afford.” “We Democrats have focused on making sure that taxpayer dollars support high-quality education programs, but Mitt Romney is a staunch supporter of expensive, for-profit schools - schools that often leave students buried in debt and without the skills for quality jobs and that prey on our service members and veterans.” The Democratic Party platform is found at: http://assets.dstatic.org/dnc-platform/2012-National-Platform.pdf
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On August 28, 2012, Mitt Romney was officially selected by the Republican delegates to be the party’s Presidential candidate. The Republican Party Platform, “We Believe in America,” was unveiled and addresses job creation, rebuilding the economy, and outlines higher education policy goals including the expansion of opportunities for the private sector in student loans.
The platform points out that college costs are on an “unsustainable trajectory” rising ahead of overall inflation every year. Further, student loan debt now exceeds credit card debt and over 50 percent of recent college graduates are unemployed or underemployed.
The Platform states that the first step is to acknowledge the need for change when the status quo is not working. There is a need for new systems of learning to compete with traditional four-year colleges: “expanded community colleges and technical institutions, private training schools, online universities, life-long learning, and work-based learning in the private sector.”
The Platform notes that “federal student aid is on an unsustainable path” and efforts should be made to provide families with greater transparency and information on completion rates, repayment rates, future earnings, and other factors that may affect their decisions. Regarding student lending, the platform encourages private sector participation, stating that “[t]he federal government should not be in the business of originating student loans; however, it should serve as an insurance guarantor for the private sector as they offer loans to students.” The platform also states that “any regulation that drives tuition costs higher must be reevaluated to balance its worth against its negative impact on students and their parents.”
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On August 27, 2012, Congressman Mike Quigley (D-IL), Congresswoman Jan Schakowsky (D-IL), and Senator Dick Durbin (D-IL) held a congressional forum that examined the impact of the growing student loan debt on families and the economy. The forum included higher education experts, students, and consumer protection advocates that included Illinois Attorney General Lisa Madigan and the Consumer Financial Protection Bureau’s (CFPB) Student Loan Ombudsman, Rohit Chopra. Mr. Chopra stated that despite a college degree being a “terrific investment,” there are some student borrowers who are underwater on their student loans and cannot modify or refinance their loans. Mr. Chopra said that “While policy makers have launched a number of programs to assist homeowners with modification and refinancing programs, many student loan borrowers have not been able to take advantage of today’s historically low interest rates. This might have more long-term consequences than we expect.” Mr. Chopra also stated that CFPB launched its student loan complaint system in March to address student loan servicing issues but “without adequate servicing, it may be difficult to achieve a successful level of modification or refinancing for borrowers.”
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In late August, the Association of Private Sector Colleges and Universities (APSCU) filed a motion opposing the Department of Education’s motion filed on July 30, 2012, which attempted to modify Judge Rudolph Contreras’ of the U.S. District Court for the District of Columbia ruling that the Department’s threshold for the loan repayment rate was arbitrary and capricious. The Judge had ruled that the Department could require institutions to disclose certain measures for their gainful employment programs, but could not use the metrics to determine a failing program nor could the Department require institutions to report information on their gainful employment programs.
The Department argued that institutions must provide some data to the Department in order to calculate some of the measures. For example, institutions must provide student data so that the Department could obtain earnings information from the Social Security Administration to determine the debt-to-earnings ratios. APSCU argued that the Department could instead provide instructions to institutions as to how to calculate the gainful employment data so that the institutions could calculate the measures to be disclosed. On August 22, 2012, the Department asked the Court to extend to September 6th the deadline to file a reply brief.
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On August 17, 2012, the Department of Education released Gainful Employment Electronic Announcement #40, announcing that institutions may voluntarily submit corrections to previously reported Gainful Employment (GE) Program information. The Department is providing additional functionality for institutions that choose to update the GE Program information, including adding students that should have been reported for the 2006-2007 through the 2010-2011 award years. The Electronic Announcement reminds institutions that they should not submit GE Program reports for the recently ended 2011-2012 award year.
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On August 30, 2012, the Department of Education issued a Dear Colleague letter (GEN-12-17), which reminds institutions that agree to comply with Executive Order 13607, the Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses, and Other Family Members, of their commitment to use the Financial Aid Shopping Sheet. The DCL reminds institutions that the Dear Colleague letter GEN-12-12 posted on July 25, 2012, announced the Financial Aid Shopping Sheet format and encouraged institutions to adopt this format to deliver financial aid offer information to all students beginning with the 2013-2014 award year. While the Financial Aid Shopping Sheet is currently in PDF format, ED is working with financial aid software providers about how they can help institutions produce the Shopping Sheet, which will also be included in the EDExpress packaging module when it is released in January 2013.
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On September 11, 2012, the Department of Education issued an implementation update about the Financial Aid Shopping Sheet for the 2013-2014 award year. The Department stated that it is engaged in discussions with financial aid software providers about how they can help institutions produce the Shopping Sheet. The current version is in PDF format. The Department disclosed that it will post a comprehensive file on the Department’s website from which either the institution may pull its data (graduation rate, loan default rate, and
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On September 12, 2012, the Department of Education published a notice in the Federal Register requesting information about promising and practical strategies, practices, programs, and activities that have improved rates of postsecondary success, transfer, and graduation. In addition, the Department announces the availability of the material submitted by respondents to an earlier request on the same subject. The Department believes that this information will be useful to others in situations similar to those described in the submissions and will be useful during future deliberations concerning improvements to the Higher Education Act. Responses are due by November 30, 2012.
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The Consolidated Appropriations Act of 2005 (P.L. 108-447) requires educational institutions that receive Federal funds to hold an educational program on the United States Constitution on September 17th each year. The Department of Education issued an Electronic Announcement on August 31, 2012, indicating that since September 17th is Rosh Hashanah, a religious holiday, educational institutions may celebrate Constitution Day in the preceding or following week.
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On August 21, 2012, the Department of Education issued an Electronic Announcement that provides guidance to institutions on instances when the Department has determined that a signed copy of the appropriate tax return or other documentation may be used to complete verification. The guidance applies to both the 2012-2013 and the 2013-2014 award years. One of the instances is when the IRS determines that a tax filer has been, or likely was, a victim of identity theft. Under this circumstance, the IRS will not permit the tax filer to use the IRS Data Retrieval System or to receive an IRS Tax Return Transcript until the matter is resolved. Therefore, the institution may accept for verification a signed copy of the paper IRS income tax return that was filed along with additional documentation as described in the Electronic Announcement. Other instances when a signed tax return may be used are when the tax filer amended his or her tax return, the taxpayer filed a foreign tax return, or a taxpayer filed a Puerto Rican tax return.
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On September 4, 2012, the Department of Education issued a Dear Colleague letter (GEN-12-18) that describes procedures institutions may use if a student wishes to decline or return previously disbursed Pell Grant funds within the same award year to preserve eligibility for a future enrollment period. The Consolidated Appropriations Act of 2012 (P.L. 112-74) reduced the maximum time frame during which a student is eligible to receive a Federal Pell Grant to a maximum of 12 semesters or its equivalent. Some students may decline all or part of a disbursement if the student expects to qualify for a larger Pell Grant in future years or if the student is planning to transfer to a more expensive institution.
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The Consumer Financial Protection Bureau (CFPB) released a revised version of its July “Private Student Loan Report” that reflects new methodologies used to calculate the statistics in the report. The announcement made on August 29, 2012 states that there are not any changes to the key findings and recommendations, new methodologies were used to calculate the proportion of private student loan borrowers who exhausted their Federal Stafford Loan options and the extent to which schools certified a borrower’s need for a private student loan. Compared to the original estimates, the revised report shows that the number of borrowers who exhausted their federal options is lower than the original estimate and the level of school certifications is higher than the original estimate.
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The National Center for Education Statistics (NCES) has released the report titled “Higher Education: Gaps in Access and Persistence Study” that includes indicators and analyses on gaps in access and persistence in higher education by sex and race/ethnicity. Some of the findings are:
- In 2008-2009, a lower percentage of males than females graduated with a regular high school diploma (71.8% versus 78.9%). This was true for Whites, Blacks, Hispanics, Asians/Pacific Islanders, and American Indians/Alaska Natives;
- In 2010, a lower percentage of males than females were enrolled in college or graduate school (39% versus 47%). The pattern was true for Whites, Blacks, Hispanics, American Indians/Alaska Natives, and persons of two or more races; and
- Among beginning postsecondary students who were recent high school graduates in 2004, males were 32% less likely to attain either an associate’s or bachelor’s degree by 2009 than were females.
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On August 22, 2012, The Institute for College Access & Success (TICAS) released a new report titled, “Making Loans Work,” which takes a look at how some community colleges in California are promoting the responsible use of federal student loans. Some of the practices described in the report include:
- Some colleges, including Santa Rosa Junior College, use worksheets to help students plan and budget for their education.
- Santa Barbara City College offers in-person counseling to every borrower, every year the student borrows. The meetings cover budgets, borrowing history, and academic progress and plans.
- Long Beach City College and City College of San Francisco assign academic counselors to the financial aid office to help make important connections between academic concerns and financial concerns.
- Student borrowers at Antelope Valley College who have taken 70 units must see a counselor and submit an explanation of their plan for finishing their degree or transferring. Mendocino College does the same at 60 units.
- Several California community colleges have also improved their technology to develop early warning systems and better communication with their students.
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