Friday News Roundup: Week of June 15-19

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.

Connecticut Student Loan Foundation Cannot Make New Loans

North Carolina Governor Proposes $1.5 Billion Tax Hike

In Hawaii, Governor Proposes Cuts to Education, Suggests Volunteerism

Oregon Governor Threatens to Veto Measure to Guarantee Reserve Money to Schools

Connecticut Student Loan Foundation Cannot Make New Loans
The Connecticut Student Loan Foundation, which has been struggling financially in recent months, announced that it will not offer new federally-backed student loans. The decision will not affect existing loans. Officials cite many causes for the foundation’s struggles, including changes to federal student loan subsidies, bond market disruptions, and interest rate changes. However, state auditors found this spring that the foundation was still handing out raises and bonuses, spending money on golf memberships and parties, and buying football tickets even in the midst of its financial troubles. Students in the state seeking loans have been directed to consult the financial aid offices of their schools for help. More here.

North Carolina Governor Proposes $1.5 Billion Tax Hike
In order protect public education and other services, North Carolina Governor Beverly Perdue has called for a $1.5 billion increase in revenue next year. The amount is significantly greater than what state legislators have formally approved, and Governor Perdue will likely have difficulty convincing both Republicans and Democrats to approve the measure. However, Governor Perdue argues that public education cuts proposed by the legislative branch would prevent students in the state from succeeding in the classroom. Without more revenue, funding for teachers and teachers assistants will be on the chopping block. More here.

In Hawaii, Governor Proposes Cuts to Education, Suggests Volunteerism
Hawaii Governor Linda Lingle has proposed cutting millions of dollars from the state’s public education system. Though she cannot impose furloughs on teachers, who are outside the control of the executive branch, she plans to cut an equivalent amount of money from the education budget, effectively forcing the same outcome. Governor Lingle claims she needs the nearly $500 million in savings over the next two years to balance the state budget. She suggests that schools should look to volunteers to cope with the cuts, claiming that many retired residents would be willing to assist during the crunch. More here.

Oregon Governor Threatens to Veto Measure to Guarantee Reserve Money to Schools
Democrats in the Oregon State Legislature want to guarantee an extra $200 million from the state’s reserve funds to public schools, a measure Governor Ted Kulongoski has threatened to veto the action. This proposal has led to a rare intra-party standoff as the Democratic governor faces off with the House and Senate Democratic leaders. Oregon’s public schools currently stand to receive $6 billion over the next two years, with $400 million in reserve funds in case the economy continues to struggle. While Governor Kulongoski would prefer to keep the funds in reserve given the economic uncertainties, the legislative leaders would like to take $200 million out of reserve funds and guarantee it to schools. They say this would give schools more certainty as they plan their budgets for the next two years. Even if Governor Kulongoski follows through on his veto threat, House Speaker Dave Hunt says he is confident that the legislature could override the veto. More here.

Briefly Noted

• Education Secretary Arne Duncan warns states that they could lose out on stimulus funds.
• 500 new colleges will participate in veterans program under new GI bill.
• As California makes big budget cuts, districts turn to voters for money.