Ed Policy Watch

At Ed Money Watch, we discuss and analyze major issues affecting education funding. In our Friday News Roundup, we try to highlight interesting stories that might otherwise get overlooked. These stories emphasize how federal and state policy changes can affect local schools and districts.

Alabama Considers Charter Schools in Pursuit of Federal Race to the Top Funds

New York Plans to Reform Teacher Preparation Efforts

Missouri Freezes Higher Education Tuition

Florida Will Request $1 Billion in Federal Race to the Top Funds

The dismal state of America's high school graduation rates - less than 75 percent nationally and below 50 percent in some areas - has become a key federal public policy issue in the last decade. Existing federal programs, including TRIO and GEAR UP, already seek to improve high school graduation and college going rates in underserved populations. But recent developments, the Student Aid and Fiscal Responsibility Act, and President Obama's 2010 Budget Request, have brought new high school intervention programs to the table. Are these programs really all that different? And what resources could the federal government commit to these efforts?

TRIO/GEAR UP
TRIO Talent Search, TRIO Upward Bound, and the Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP) are three existing federal programs that attempt to increase high school graduation and college going rates in low-income students through small programs aimed at individual students or groups of students. These programs include out-of-school programs or pull-out sessions during the regular school day, after-school and weekend instruction, tutoring support for core academic subjects and college and financial aid applications, and counseling, mentoring, academic support, and college outreach services.

[Last week, we reported  (see here and here) on the fact that some of the student loan industry's most fervent supporters in the financial aid world are potentially putting their schools and students at risk by refusing to take even the initial steps to prepare for a possible shift to direct lending next fall. Since then, we've been wondering how these aid directors would explain their inaction to students. So, after hearing the comments that  financial aid administrators and lenders made at last week's Lexington Institute event and on the Finaid-L listserv, we decided to write up a fictional account of how these aid officials might explain themselves. We hope you enjoy it.]

Dear Students,

As you may have heard, we have recently taken action that could potentially disrupt your ability to obtain federal student loans next fall. But we want to assure you that there is absolutely nothing to worry about. Our good friends in the student loan industry have a sure-fire strategy in place to stop any efforts in Washington that would force us to change the way we do business. And for that we're very grateful because we can't imagine doing things any other way.

Here's some background. Last month, we received a letter from U.S Secretary of Education Arne Duncan urging us to take at least the initial steps to become "Direct Loan-ready" for the 2010-11 academic year. As you may know, the Obama administration has proposed ending the Federal Family Education Loan (FFEL) program in favor of 100 percent direct lending. Under the plan, tens of billions of dollars in savings from making the switch, and eliminating lender subsidies, would be used to provide a substantial boost in spending on Pell Grants, which go to the most financially needy students. This may sound good but it won't help us much because we don't enroll many of those students. In other words, the upper middle income students we predominantly serve will be left out in the cold!

U.S. Secretary of Education Arne Duncan presented the fullest picture yet of his vision for a birth-to-8 education system in remarks yesterday at the opening of the annual meeting of the National Association for the Education of Young Children. 

 In a wide-ranging speech that emphasized the importance of "raising the bar" on the quality of early learning environments, Duncan said that early childhood advocates now face two challenges. One, he said, is the need for better transitions and "follow through" between pre-K and the K-12 years. The other is what he sees as a necessary shift in thinking about how to measure quality -- moving from "inputs" like teacher qualifications and child-to-staff ratios to "outcomes" that indicate whether children are developing and learning well.

Duncan praised the NAEYC, the nation's largest membership organization of preschools, child care centers, kindergartens and public elementary schools, for its insistence that to close the achievement gap, we must prevent the gap through high-quality early learning experiences.

"I want our schools to get out of the catch-up business," he said. "To prevent the gap," he continued, "we must be ready to dramatically improve outcomes for our children."

Over the past several months, I have spent a lot of time talking to early childhood stakeholders about collaboration, and today the Early Education Initiative is releasing a policy brief based on that reporting. "The Next Step in Systems-Building: Early Childhood Advisory Councils and Federal Efforts to Promote Policy Alignment in Early Childhood." It provides a status report on all 50 states and the District of Columbia.

You'd think that sharing information and working together nicely would be second nature to leaders in early childhood policy. After all, it is something they teach in kindergarten. But in practice, collaboration -- or more specifically, policy alignment -- is more than just a matter of making sure everyone knows what everyone is doing and playing nicely. It takes hard work.

What makes policy alignment so hard? Government programs serving young children and their families are spread across departments of education, health and welfare. Non-profit organizations and private childcare providers also play a significant role in caring for and improving the lives of young children. The result is a tangled web of avoidable dysfunction. Low-income parents may not know that their children are eligible for Medicaid or Head Start, kindergarten teachers are given no information on the background of their incoming students, providers file redundant paperwork for different agencies, and the list goes on.

In July we analyzed funding for K-12 school facilities in the student loan reform bill, the Student Aid and Fiscal Responsibility Act, as passed by the House Education and Labor Committee. The full House passed the bill in September and preserved the $2.0 billion per year school repair program. Although the Senate has not yet acted on a similar student loan reform bill, a version drafted by the Senate Health, Labor, Education and Pensions Committee was leaked a couple of months ago. The leaked bill suggests the Senate is headed in a different direction than the House when it comes to funding school facilities construction.

Both of these pieces of legislation provide a glimpse into the federal government's first major foray into directly funding K-12 school facilities and neither propose an insignificant amount of money. The most striking difference between the two versions is that the House includes a two-year, formula-based investment in K-12 school facilities, and the Senate bill creates a five year competitive program for K-12 school repair, renovation, and construction.

[Editor's Note: A version of this post ran yesterday in the Albany Times Union]

The College Board reports tuition is up nine percent this year in inflation-adjusted terms, despite declining prices throughout the economy and stagnant median family income. Parents want to know why the sharp increase and why college costs so much in the first place.

The answer, in a word, is demand. Until we channel higher education demand in a more rational direction, tuition will continue to outpace inflation, grant aid, and family income.

Higher Ed Watch readers know that demand isn't the only factor driving tuition. College supply is relatively limited. Higher education is slow to embrace productivity gains seen elsewhere in the economy. Most important, states cut higher education funding to balance budgets, and colleges backfill those cuts by hiking tuition. Banks act as enablers, supplying big student loans to anyone willing to borrow.

But at its base, tuition rises because suppliers, including those who finance them, take advantage of high, under-informed, and often irrational consumer demand. As families shop colleges this fall, they would be well served to focus on value. The Department of Education can help by protecting consumers from the worst deals. We need a lemon law for colleges that cost too much and deliver too little.

Yesterday, the U.S. Department of Education released the application and notice of final priorities for the Race to the Top competition, a $4.35 billion grant program that rewards states that have shown the most commitment to and progress on education reforms to improve student achievement. The final priorities and application reflect a number of changes from a draft the department released in July that drew more than 1,100 comments.

At Ed Money Watch, we discuss and analyze major issues affecting education funding. In our Friday News Roundup, we try to highlight interesting stories that might otherwise get overlooked. These stories emphasize how federal and state policy changes can affect local schools and districts.

New Mexico Lawmaker Proposes Budget Fix Using Endowment Fund

Colorado Cuts to Education Bigger than Expected

More Cuts for South Carolina Schools

Earlier this week, we called attention to the fact that some of the student loan industry's most fervent supporters in the financial aid world are potentially putting their schools and students at risk by refusing to take even the initial steps to prepare for the possible shift to direct lending next fall.

This is particularly worrisome, because as we wrote, no matter what happens with the student loan reform legislation that Congress is considering, the end of the Federal Family Education Loan (FFEL) program is coming. That's because an emergency law that is currently propping up FFEL, the Ensuring Continued Access to Student Loans Act (ECASLA), is set to expire this summer and neither the Obama administration nor Democratic Congressional leaders are interested in extending it. So unless the financial markets improve enough so that lenders do not have to depend on federal financing to make government-backed loans to students, colleges will likely have to shift to direct lending.

Department of Education officials have been trying to get that message out. Late last month, Secretary of Education Arne Duncan sent a letter to colleges that have not taken any steps yet to start preparing for a possible conversion. "While there are encouraging signs that financial markets are rebounding, the most prudent course of action is for you to ensure that your institution is Direct Loan-ready for the 2010-2011 academic year," he wrote. "That way, loan access to your students will be assured."

The Education Secretary's letter set off a firestorm of controversy on Capitol Hill, with the student loan industry's closest allies in Congress falling all over themselves to be the first to condemn the Obama administration of strong-arming colleges. Both the Democrat Ben Nelson and the Republican Mike Johanns from the great State of Nelnet (whoops, we mean Nebraska) sent letters to Duncan (see here and here) last week expressing their outrage.