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Our Wish List for President Obama’s Second Term

November 7, 2012
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Now that President Obama has been reelected, and he has more time to sit back and read Higher Ed Watch, we are presenting our wish list for his second term. [And Mr. President, while you're at it, we're sure you'll enjoy our posts from last week highlighting your first term's biggest higher education hits and misses!]

Among other things, we (the authors of this post) would like to see the Obama administration do the following:

  • Develop long-term solutions for revamping the federal financial aid programs, rather than continuing to scramble to come up with stop-gap measures to shore up funding for these programs in the heat of high-stakes budget battles.
  • Finalize the financial aid shopping sheet and scorecard—and make them mandatory. Students and families need clear, consistent, useable information at key points in their decision-making process. Given that many institutions currently benefit from the lack of this information, voluntary adoption of these efforts will accomplish very little.

President Obama’s Biggest Higher Ed Misses

November 2, 2012

With the presidential election fast approaching, we are taking a closer look at President Obama’s higher education record. Yesterday, we highlighted the administration’s most significant accomplishments in this area. Today, we are examining the administration’s most significant blunders and missed opportunities.

So without further ado, here are the Obama administration’s biggest higher ed misses:

1. Fighting to Keep the 3.4% Interest Rate: Eager to woo the youth vote and tap into America’s anxiety about student debt, the Obama administration launched an all-out “don’t double my rate” PR campaign earlier this year aimed at stopping Congress from allowing the temporary 3.4 percent fixed interest rate on federally-subsidized Stafford loans to revert to 6.8 percent. Not wanting to be on the wrong side of this popular issue during an election year, Republicans and Democrats lawmakers made national headlines for their bipartisan efforts to maintain the lower rate. Largely left out of this debate, however, was any acknowledgement of how small the benefits of this fix would be: after all, it only extended the 3.4 rate for another year, only applied to a subset of new borrowers (those who qualify for subsidized Stafford loans), and only would save eligible borrowers about $9 a month. And it cost the government $6 billion. With the Pell Grant program facing a multi-billion dollar funding cliff, it’s a shame that the administration spent so much political and financial capital on a one-year gimmick that provided neither meaningful relief to financially-distressed borrowers in the short term nor to the Pell Grant program over the long haul.

President Obama’s Greatest Higher Ed Hits

November 1, 2012

With the presidential election only days away, we thought it would be a good time to take a closer look at President Obama’s higher education record. In this post, we highlight the administration’s five greatest hits. Tomorrow, we will examine the administration’s five biggest misses.

So without further ado, here are the Obama administration's most significant higher ed accomplishments:

1. Reforming Student Loans: President Obama achieved his single most significant higher education victory in March 2010 when he signed into law legislation ending the wasteful practice of subsidizing private lenders to make federal student loans. Overcoming the fierce opposition of the student loan industry, the Obama administration and Democratic Congressional leaders eliminated the Federal Family Education Loan program, which had long been racked by corruption, and shifted to 100 percent direct lending, which delivered the same federal loans to students at a much lower cost for taxpayers and without all the scandals. And despite dire warnings from the industry and its allies in Congress about the risks of moving thousands of colleges out of FFEL and into direct lending, the U.S. Department of Education pulled off the transition without disturbing even a single student’s access to federal student loans.

Yeshivas Score Huge Pell Grant Windfall | Forward

October 31, 2012

Stephen Burd, a senior policy analyst with the New America Foundation's education policy program, said the Obama administration has tried to curb abuse by introducing regulations that assess whether colleges provide “gainful employment” to their students.

Phoenix Reloads | Inside Higher Ed

October 26, 2012

"I wouldn't bet against them," says Steve Burd, a senior policy analyst at the New America Foundation and frequent critic of for-profits. Burd joined fellow skeptics about the industry as well as some financial analysts in praising Phoenix for making painful but proactive moves to reposition itself ...

Original article

In the Fight Over Financial Aid Award Letters, Students Must be Heard

October 25, 2012

A slew of recent reports dealing with student debt make crystal clear that students need to be better informed about the financial aid packages that colleges are offering them. Too often, colleges are not upfront about the amount of debt they are asking students to take on – leaving these individuals without even a basic understanding of how much they will be on the hook for once they leave school.

This argument is made most explicitly in a report released this month entitled “Lost Without a Map: A Survey About Students’ Experiences Navigating the Financial Aid Process.” The firm NERA Economic Consulting and the advocacy group Young Invincibles surveyed 13,000 students and recent graduates with an average debt of more than $75,000, and found that about a quarter of respondents with federal loans and nearly half of those with private loans felt that they had not received accurate information about their financial aid from their schools. As a result of the lack of adequate guidance, many students who take on extremely high levels of debt “do not have a clear idea about the consequences of the loans they take out, with many experiencing misunderstanding or surprise regarding repayment terms and interest rates,” the report states.

Those surveyed clearly believe that colleges have a responsibility to ensure that students understand their student aid options. In fact, more than 90 percent of the respondents agreed that the financial aid award letters that most colleges send out each spring need to be standardized to make the forms easier to understand and compare – with “common definitions and clear terms” to describe the schools’ student aid offerings.

Battle Of The Student Loan Scams | Daily Reckoning - Australian Edition

October 24, 2012

'Stephen Burd, the editor of the New America Foundation's Higher Ed Watch blog, has written that Sallie Mae has often allied itself with for-profit colleges—not all of them reputable—thereby helping fund private student loans "with interest rates and ...

The Real Story Behind Corinthian Colleges’ Plummeting Default Rates

October 8, 2012

In examining the student loan default rate data that the U.S. Department of Education recently released, it’s hard not to marvel at the success that Corinthian Colleges has had in driving down its schools’ two-year cohort default rates.

The for-profit higher education corporation’s two-year rates have plunged across the board, with most of them dropping by double digits. For example, the company’s Everest College campus in Thornton, Colorado saw its rates plummet, from 27.3 percent in 2009 to 3.7 percent in 2010. Similarly, at Everest Institute in Pittsburgh, the rate dropped from 25.2 percent to a remarkably low 1.1 percent. [The company has been much less successful in lowering its schools’ 3-year default rates. Those were 34.9 percent at the Thornton campus and 28.6 percent in Pittsburgh. But the government won’t start holding schools accountable for these rates until 2014.]

How did Corinthian’s leaders achieve this remarkable feat? Did they do it by:

A. Radically improving the quality of the programs their schools offer to ensure that their graduates have the skills they need to obtain gainful employment in their fields of study?

B. Slashing prices so that students don’t have to take on so much debt?

C. Overhauling their schools’ recruiting practices to ensure that they enroll only students who they know can succeed in their programs?

The correct answer is “none of the above.” Instead, as the Senate Committee on Health, Education, Labor and Pensions has documented, Corinthian officials have engaged in a no-holds-barred campaign to drive down their schools’ rates by pushing former students to obtain temporary forbearances and deferments on their loans. The company’s sole purpose has been to prevent these borrowers from going into default during the current two-year window when the Education Department holds schools responsible for their rates.

Why Congress Should Not Revive the Higher Education Tax Deduction

September 18, 2012

The Higher Education Tax Deduction, the most regressive of all the government’s tuition tax break programs, expired in December. But unfortunately, we may not have seen the last of it.

As our sister blog Ed Money Watch reported last month, the U.S. Senate Finance Committee has approved legislation that would revive the tuition tax deduction program, which allows students and their families to subtract from their taxable income up to $4,000 a year in tuition and fees. Under the measure, filers would be able to continue claiming the benefit in tax years 2012 and 2013.

Congress created the tuition tax deduction as part of President George W. Bush’s broader tax cut legislation in 2001. Private college leaders championed the deduction, saying it would be more helpful to students attending their high-priced schools than the Hope and Lifetime Learning tax credits that the Clinton administration and Congress created in the late 1990s to make college more affordable for the middle class. Powerful lawmakers from Northeastern states, where these institutions are heavily represented, took up the cause and convinced their colleagues to include the deduction in the larger tax cut package.

A Big Default Problem, but How Big? | New York Times

September 8, 2012

Stephen Burd, senior policy analyst with the New America Foundation's Education Policy Program, called the official default rate “an extremely flawed measure.” “For years, Democratic and Republican administrations alike touted 'record low' rates to ...

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