Friday News Roundup: Week of May 18-22

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.

Report Released on Stimulus Funds and Reform

California Voters Reject Budget Proposals

Credit Card Bill Could Limit Student Access to Credit for College

California Community Colleges Plan to Slash Enrollment

Florida Lawmakers use Stimulus Aid to Avoid K-12 Budget Cuts

Report Released on Stimulus Funds and Reform
The Center on Reinventing Public Education (CRPE) on Monday released a report by Marguerite Roza, “Ranking the States: Federal Education Stimulus Money and the Prospects for Reform.” The paper uses state revenue projections and estimated federal stimulus education funds to rank states according to their proportionate vulnerability to cuts. Using these rankings, it projects different ways in which reforms may occur in states with different budget outlooks. Roza demonstrates the differences among states in education budgets over the coming fiscal years, and points out that while some states are facing deep cuts even with federal stimulus dollars, those that don’t face budget shortfalls before receiving stimulus dollars can count the federal money as an unexpected windfall. Still others will use the stimulus funds to maintain previous spending levels. Instead of assuming that states facing budget shortfalls will maintain the status quo and that those facing windfalls will institute reforms, Roza suggests that reforms may occur in both situations, but in different ways. States facing large shortfalls may institute reforms that increase efficiency and address otherwise constrained resources, while those with windfalls may use the stimulus funds to make new investments, like acquiring new data systems. View the full report here.

California Voters Reject Budget Proposals
On Tuesday, voters in California overwhelmingly rejected a series of budget proposals that would have increased taxes to help shore up the state’s severe budget shortfalls. The University of California system predicted before the vote that defeat of the budget measures would mean a cut of $322 million, or 10 percent, for 2009-10, which UC system president Mark Yudof said could translate into dramatic decreases in the quality and accessibility of the university. The California State University system faces a similar situation, expecting a 10 percent budget cut, while community colleges face the prospect of turning students away. More here.

Credit Card Bill Could Limit Student Access to Credit for College
This week, the Senate passed legislation that would reform federal credit card rules, and add new consumer protections with respect to fees and interest.. The bill also includes extra protections for students, but critics argue that these protections may make it more difficult for students to access the credit they need to finance their education. Under the new legislation, students under age 21 would need a parent cosigner or proof of an independent ability to pay. Student borrowing would be capped at either $500 or 20 percent of the student’s annual income, whichever is higher. Critics contend that these changes would limit students’ ability to pay for college or the costs associated with their education. According to a study by Sallie Mae, 84 percent of college students have at least one credit card, and 92 percent of these students use their credit cards to pay for education-related expenses. More here.

California Community Colleges Plan to Slash Enrollment
With the failure of California’s six budget propositions this week, the state’s community colleges have announced that the system will reduce enrollment by 250,000 students in the coming academic year. This unprecedented reduction is a result of Governor Schwarzenegger’s proposed budget, which would cut state support for community colleges by 11 percent over the next 13 months. The system, which currently enrolls about 2.7 million full- and part-time students, has already absorbed budget cuts without shrinking the student population, cannot sustain these new budget cuts without firing teachers and reducing the number of courses offered. These reductions are especially difficult at a time when unemployment is high, since enrollment has been surging as job searchers seek out new training. Though the state’s two university systems also face cuts, community colleges will be hit harder than the state university systems, as the universities have more diverse funding streams. More here.

Florida Lawmakers use Stimulus Aid to Avoid K-12 Budget Cuts
Florida lawmakers have used federal stimulus dollars to patch together a fiscal 2010 budget that keeps K-12 spending at roughly the fiscal 2009 current level. The state was granted a waiver on May 11, allowing access to a large portion of education aid that could have been held up due to drops in financial support for public schools since 2006. That money will be used to increase per-pupil spending in districts by an average of about $28. However, Florida’s high-profile Virtual School program will see a 10 percent cut in its per-pupil allocation. Several other measures included in the legislation would raise revenue at the state and district levels through a variety of new taxes and fees. They measures still need the Governor’s approval. More here.

Briefly Noted

• Primary teachers in Massachusetts may be tested in math.
• Two-year degrees are key to Obama’s goal of increasing the number of students graduating from college.