Higher Ed Roundup: Week of August 11 – August 15

President Bush Quietly Signs Higher Education Act Into Law

No Need for Additional Loan Changes for Now, Congressional Research Service Says

Massachusetts Calls Off Plan To Rescue Lender

ACT Exam’s Popularity Increases

President Bush Quietly Signs Higher Education Act Into Law

Without any comment or ceremony, President Bush signed into law on Thursday legislation to reauthorize the Higher Education Act for five years. The measure, which was approved by Congress with overwhelming bipartisan support late last month, has received a less-than-enthusiastic reception from the Bush administration. On the day the legislation won final approval, Education Secretary Margaret Spellings released a statement criticizing it for creating more than 60 “new, costly, and duplicative” programs. Spellings also complained that lawmakers were not tough enough on colleges. “While the legislation takes some positive steps forward, it fails to create the necessary reforms in accessibility and affordability, and it falls short on strengthening accountability,” she said. “More work can — and must — be done to make achievement outcomes more transparent to students and families.” Among other things, Spellings was reportedly peeved that the new law reduces the education secretary’s power to regulate college accreditation.

No Need for Additional Loan Changes for Now, Congressional Research Service Says

The need for additional changes in federal student loan policy to deal with the credit crunch will depend on “how the current economic slowdown develops, and how financial markets react and evolve in the face of challenging economic conditions,” according to a recently released report by the Congressional Research Service. The report, “Economics of Guaranteed Student Loans,” surveyed the supply and demand functions of the student loan market and concluded that it was too early to determine whether difficulties faced by lenders and banks were endemic to the student loan market or an effect of global financial turmoil. As such, the report did not endorse any additional legislative changes, instead suggesting policymakers take a wait-and-see approach. Such a tactic also seems prudent given recent reports from states such as New Hampshire that students are still finding loans, overblown stories about the loan crunch notwithstanding.

Massachusetts Calls Off Plan To Rescue Lender

Officials in Massachusetts announced this week that they were abandoning a plan to try and bail out the state’s nonprofit lender, the Massachusetts Education Finance Authority (MEFA), because they realized that there isn’t a student loan crisis in the state after all. Last week, Gov. Deval Patrick (D) issued an eleventh-hour appeal to colleges and the state pensions agency to to come to the aid of MEFA , which stopped issuing federally backed loans on July 1, asking them to invest in an upcoming $425 million bond sale by the agency. The state, however, received no commitments from these parties. On Thursday, State Treasurer Timothy Cahill said that state officials had second thoughts after seeing a recent poll by the Association of Independent Colleges in Universities that found that 70 percent of schools in Massachusetts had 15 or fewer students still looking for a lender. “It seems like most of the students in the state of Massachusetts have gotten alternative funding sources,” Cahill stated.

ACT Exam’s Popularity Increases

Once a heavy underdog, the ACT is starting to overtake the SAT as the college admissions test of choice for many students. On Wednesday, ACT officials announced that 1.42 million high school seniors took the test this year, up 9 percent from last year, and 21 percent from 2004. Much of this increase was attributed to the growing number of states that now require all graduates to take the test as part of their state assessment regimen, including ones outside of the ACT’s traditional base in the Midwest. Despite the increase in test takers, exam scores remained mostly steady.