Roundup: Week of April 2 - April 6

Financial Aid Directors & Education Dept Official Placed on Administrative Leave

All three financial aid directors under investigation regarding student loan company stock ownership, as identified by the New America Foundation, have been placed on administrative leave from their respective universities. Columbia University took action first, placing financial aid director David Charlow on paid leave Wednesday, April 4th. The University of Texas at Austin and the University of Southern California quickly followed, placing directors Lawrence Burt and Catherine Thomas on paid administrative leave on Thursday. One day later, an Education Department Federal Student Aid official, also under investigation regarding student loan company stock ownership, was placed on leave as well. Secretary Spellings further asked for Mr. Burts resignation from the Advisory Committee on Student Financial Assistance.

Edwards Injects Student Loan Investigation Into 2008 Presidential Campaign

John Edwards became the first Presidential candidate to comment on recent revelations regarding student loan company stock ownership by at least three financial aid officers and one Department of Education employee. In a statement released Thursday, April 5th, Edwards criticized student lenders excessive profits, specifically singling out Sallie Mae, and called for reform of the system to redirect taxpayer subsidies away from loan providers and to students and families. Edwards is proposing moving to an entire system of Direct Loans that would eliminate private federal loan providers, a move he claims would free up $6 billion a year to increase college affordability. In 2003, Edwards asked for greater federal regulation of lenders to ensure that colleges were not being paid to promote loans from certain companies, a request that was postponed by the Department of Education.

Florida Eliminates Early Decision

The University of Florida (UF) announced on Wednesday that it will end early decision and adopt one November 1st deadline for all applications. UF is largest state flagship university to take this step, and the first major school since last fall to follow in Princeton, Harvard, and UVAs footsteps. UF claims that its decision is based both on practicality, in terms of consolidating the admissions schedule, and fairness. According to the university, early decision applicants at UF tend to be from wealthier families and are less likely to be first generation students. Students who count on financial aid are often wary of committing to one school before they have received their financial aid packages and can compare offers from multiple institutions.

MOHELA Records Subpoenaed by State Auditor

Last Friday, the Missouri Higher Education Loan Authority (MOHELA) was issued a subpoena by Missouri Auditor Susan Montee to submit all closed meeting and executive board session records to her office. The records requested date back two and a half years and include closed meetings at which the controversial proposal to fund construction at several state colleges and universities through the selling of MOHELAs assets was discussed. The subpoena was issued after MOHELA refused to provide the information voluntarily. Montee believes that the records are necessary to conduct a thorough audit, and has given the MOHELA board until April 12 to produce them.

Assessing Academic Competitiveness and SMART Grants

The Department of Education has released its first data on recipients of Academic Competitiveness and National Science and Mathematics Access to Retaining Talent (SMART) Grants. The grants are given to low-income students who complete a rigorous high school curriculum. They have been criticized for redirecting need-based aid to a complicated aid program that conditions grants on academic merit and full-time enrollment in higher education. The results have been mixed so far. The Department of Education is pleased with the rate at which the grants are being rewarded, and is pleased to note that states with the highest high school standards are taking the greatest advantage of the new grants. However, only 4 percent of low income students who qualify for the Pell grant have received either an Academic Competitiveness or SMART grant. Critics believe that grant requirements are too restrictive, and that the application process needs to be simplified and opened up to part-time students.