Higher Ed Roundup: Week of January 19 – January 23

Ed. Dept. Institutes Its Own Lender Subsidy Change

Many Students Don’t Enroll in Recommended Remedial Classes, Report Finds

NCAA Considering “Academic Progress Rate” for Coaches

Briefly Noted…

Ed. Dept. Institutes Its Own Lender Subsidy Change

The U.S. Department of Education announced last Friday that it is taking special action to calculate the interest rate subsidy owed to private lenders making Federal Family Education Loans for the last quarter of 2008. The subsidy rate (called a Special Allowance Payment) is calculated each quarter using 3-month commercial paper interest rates. Due to credit market disruptions, however, commercial paper markets broke down completely for 33 of the 62 business days in the fourth quarter of 2008 — meaning there were no interest rates available to calculate the subsidy for those days. In response, the Department opted to use interest rates on commercial paper financed under the Federal Reserve’s Commercial Paper Funding Facility, which was instituted on Oct. 27 to prop up faltering markets. The Department will carry forward the previous day’s commercial paper rate for any day between Oct. 1-27 that is missing those interest rates. The rates under the Fed’s funding facility are also generally 1.50 percentage points higher than those reported in the regular commercial paper market. It should be noted that the Department’s change is different from a proposal in the House of Representatives’ stimulus bill that would use the LIBOR index instead of commercial paper in the 2008 fourth quarter subsidy calculation (see Higher Ed Watch for more on this topic). It’s unclear at this time if the Department’s action will stop Congress and the student loan industry from pushing for the LIBOR substitution.

 

Many Students Don’t Enroll in Recommended Remedial Classes, Report Finds

Nearly two-thirds of all community college students are referred to remedial courses, but many students never enroll in the suggested classes, thus failing to complete all their developmental coursework. That is the finding from “Referral, Enrollment, and Completion in Developmental Education Sequences in Community Colleges,” a study released last month by researchers at Columbia University. The report posits that as few as three out of every 10 students who are referred to remedial courses ever finish all their developmental coursework. But this is largely because many community college students — 36 percent referred to remedial math classes and 27 percent referred to remedial English classes — never actually enroll in the suggested courses. Black students, part-time students, and students in vocational programs were least likely to complete recommended developmental coursework. The researchers suggests that students’ developmental coursework completion rate could be increased by putting more students into college-level classes; combining different levels of remediation into a single, intensive course; and using saved resources to provide more tutoring and support for students enrolled in credit-bearing courses.

NCAA Considering “Academic Progress Rate” for Coaches

The NCAA’s Board of Directors will vote this spring on a plan that for the first time would publicly measure and report the academic performance of athletes under specific coaches. This metric would be modeled on the existing Academic Progress Rate (APR), which tracks the enrollment and academic eligibility of student-athletes on teams and at individual institutions. The proposed APR for coaches, however, would follow a head coach as he or she moves from school to school. The coach metric would also carry no penalties for bad scores, unlike current APRs, which have scholarship penalties for low marks. If approved, the NCAA could begin calculating the APR for coaches late next year.

Briefly Noted …

• As expected, Arne Duncan was quickly confirmed by a voice vote in the Senate on Tuesday and was sworn in as secretary of education on Wednesday afternoon.
• Also on Tuesday, the Department of Education issued a report to Congress on simplifying the federal financial aid application. In it, the Department said it could use data from the Internal Revenue Service to simplify the Free Application for Federal Student Aid without hurting the eligibility of low-income students, though it noted that substantial reform would also require changing the federal needs analysis formula.
• Postsecondary credentials, even certificates from two-year colleges, can lead to higher earnings for students of all incomes was the unsurprising conclusion reached by a study of 144,000 Florida high school graduates released this week by the Hudson Institute and funded by the Bill and Melinda Gates Foundation. More interestingly, the study found that students with a certificate from a two-year college received a larger earnings boost than those who had an associate’s degree — suggesting that even completing some postsecondary education could be beneficial for students. [Disclosure: the Bill and Melinda Gates Foundation funds other work done by New America’s Education Policy Program.]