Friday News Roundup: Week of March 2-6

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 changes can affect local schools and districts.

Student Loan Auction Plan Moves Forward

Schools Making Questionable Charges to Nutrition Programs

Are Rewards for Students Helpful, or Harmful?

Georgia Governor Still Undecided on Stimulus Money

Student Loan Auction Plan Moves Forward
The U.S. Education Department is moving ahead with plans to set subsidies for PLUS loans through an auction, putting the department on track to choose winners by Congress’ July 1 deadline. Lenders will bid for the right to make PLUS loans in each state. Ultimately, the two lenders in every state that agree to the lowest federal subsidy for loan making will win the right to originate loans for two years. Financial aid offices are concerned that the auction will not be completed in time to award loans for the coming academic year. Some also wonder whether lenders will bid at all, given the state of the financial markets. However, President Obama has called for abolishing the guaranteed loans affected by the auction, meaning that the process may be irrelevant by the time the auctions are complete. More here.

Schools Making Questionable Charges to Nutrition Programs
Congress Daily reports that many federal school nutrition programs are charging the government for indirect costs like electricity and garbage pickup. The federal reimbursement is intended to compensate school districts for costs associated with providing meals to students. Saxby Chambliss, ranking member of the Senate Agriculture Committee, contends that new legislation should explicitly forbid food agencies from claiming reimbursement for these indirect costs. Due to increasing quality standards on meals served in schools, districts are already spending more on direct costs like food and other supplies. As the committee considers increasing federal support for the school meal program, indirect costs are an important consideration. More here.

Are Rewards for Students Helpful, or Harmful?
As schools strive to find ways to raise student achievement, many are debating whether rewarding students with prizes or money for academic performance is acceptable. Schools in high-poverty areas like New York City, Washington, DC, and Chicago, among others, are piloting programs in which students are rewarded with money for good grades, behavior, and attendance. While economists cite studies showing that cash incentives improve participation rates and performance on AP tests, psychologists argue that these results can be deceiving. Incentives that are not used properly can actually decrease student motivation, especially when reward programs are eliminated. Psychologists cite the difference between extrinsic and intrinsic motivation as an explanation for decreased motivation. However, some acknowledge that the right types of rewards, used appropriately, could have positive effects on students. More here.

Georgia Governor Still Undecided on Stimulus Money
Georgia Governor Sonny Perdue is still undecided on whether to accept all of the $6 billion offered to the state under the American Recovery and Reinvestment Act. He is concerned that the state will not be able to sustain funding levels after stimulus dollars are spent. Georgia schools Superintendent Kathy Cox is hoping to collect all of the $2.2 billion expected for education in the state. She says the money would be used to avoid layoffs in Georgia schools and keep class sizes small. Rural areas, where school districts are the biggest employers, would be hardest hit with teacher and school nurse layoffs without the stimulus funds. Cox hopes to have definite answers in the next couple of weeks. More here.

Briefly Noted

• Catholic schools increase aid to help struggling families keep students enrolled.
• Arne Duncan says DC students should keep vouchers.
• Glendale schools ban teachers’ personal appliances to save on energy costs.