Higher Ed Roundup: Week of December 8 – December 12

College and Student Groups Push to Include Higher Ed in Stimulus Bill

Report Outlines Student Aversion to Borrowing

College Board Settles with NY Attorney General

College Board Presents Higher Ed Reform Proposals

College and Student Groups Push to Include Higher Ed in Stimulus Bill

A group of organizations representing students, consumer advocates, and colleges sent a letter to Democratic Congressional leaders on Thursday asking them to include a major expansion of federal financial aid as part of a giant economic stimulus package that Congress is hoping to consider early next year. In the letter the group calls for substantially increasing the maximum Pell Grant for the lowest income students from $4,731 to $7,000, expanding Federal Work Study spending by 25 percent, and making PLUS loans more affordable for college students’ parents. In addition, the groups call for creating a new temporary “emergency access” student loan program, which would provide financing to students who have exhausted federal eligibility but still need help paying for college. To participate in the program, colleges would have to agree to maintain or increase the amount of institutional need based aid they provide their students. Among the organizations that signed the letter were the American Association of State Colleges and Universities, the National Association of Student Financial Aid Administrators, the National Consumer Law Center, the Project on Student Debt, and the United States Students Association.

Report Outlines Student Aversion to Borrowing

Part time, community college, Asian, and Hispanic students were less likely to take out federal students loans than others, according to a report released this week by the Institute for Higher Education policy. The study also found that there were large numbers of students who, despite having unmet financial need of $2,000 or more, did not take out federal student loans. These students, the report says, were more likely to leave school without a degree, with even higher attrition rates among non-borrowing black and Hispanic students. Failing to borrow federal loans is especially dangerous for students who then take on private loan debt, which is generally more costly and has fewer repayment options. Students that are averse to borrowing, meanwhile may attend at a lower rate or select a cheaper institution — such as a community college over a four-year university. These decisions could prolong the time it takes to get a degree, which also decreases the likelihood of receiving a credential. The report has several recommendations for getting more students to borrow federal loans. These include: increased financial literacy programs to better address the risks and benefits associated with borrowing, changing the financial aid system to reduce the need for borrowing, and investigating whether restrictions prohibiting borrowing by some groups of students are a good idea.

The report was sponsored in part by the following student loan companies: the Education Resources Institute (TERI); TG, a guaranty agency and nonprofit lender in Texas, and USA Funds, the largest student loan guarantor in the country.

College Board Settles with NY Attorney General

New York State Attorney General Andrew Cuomo announced on Monday that his office had reached a settlement agreement with the College Board over its former private student loan marketing practices. The agreement follows allegations that the College Board engaged in deceptive marketing practices by providing incentives to colleges that placed the organization on the schools’ preferred lender list. Under the agreement, the testing company will spend $675,000 to develop tools, including an online loan calculator, “to help financial aid administrators, students, and parents across the country compare student loan offers and identify the lowest-cost student loan options.” The company, which ended its private student loan operations in August 2007, also agreed that it would adhere to Cuomo’s Direct-to-Consumer Marketing Code of Conduct if it resumed loan operations at any point.

College Board Presents Higher Ed Reform Proposals

Poor high school-college academic alignment, complex admissions and financial aid processes, college affordability, and access to adult education are among the seven great challenges facing PK-16 education in America today, according to the final report released this week by the College Board’s Commission on Access, Admissions and Success in Higher Education. Focused on finding ways to get 55 percent of young Americans to hold a community college degree or higher by 2025, the commission’s report calls for several new or increased education funding streams and programs across all levels of education.

These proposals include: increasing the maximum Pell Grant to $5,100; raising Federal Supplemental Educational Opportunity Grant funding to $1 billion; providing voluntary preschool for all families at or below 200 percent of the poverty line; and creating a “Title I-like” program to help colleges that serve large numbers of low-income students. The commission also proposed raising federal spending on adult education to $1 billion and creating an “honors GED” program that has stronger connections to postsecondary curricula. Finally, the commission report said schools and states should boost high school counseling programs, control college costs, and use “data-based” strategies to increase postsecondary degree completion rates. Composed of several university presidents and representatives from higher education groups, the commission first formed 18 months ago.