Higher Ed Roundup: Week of July 14 – July 18

Dept. of Ed Requests Emergency Survey on Credit Transfers

Few Colleges Join TEACH program

New Repayment Program for Borrowers May Not Help All Who Need it, Report Says

Dept. of Ed Requests Emergency Survey on Credit Transfers

The U.S. Department of Education took an unusual step on Wedneday when it filed an emergency request with the White House Office of Management and Budget to conduct a $375,000 survey of Pell Grant recipients who have transferred from one college to another to see what kind of problems they have experienced. Department officials said they needed to circumvent normal public comment procedures because this student group is particularly difficult to reach and because Congress is close to completing work on its Higher Education Act reauthorization legislation, a measure lawmakers have been working on for nearly five years. College lobbyists accused the Department of trying to revive its earlier efforts to give the federal government more authority to regulate traditional colleges’ transfer of credit policies. Meanwhile, advocates for for-profit colleges, who have pushed for increased oversight in this area, applauded the Department’s action.

Few Colleges Join TEACH program

At a recent conference of financial aid administrators, the Department of Education revealed that fewer than 200 colleges have signed up to participate in the new TEACH grant program that aims to encourage students to teach “high-need” subjects, such as math or science, in “a high-need” area. Under the program, students who intend to teach these subjects at a public or private elementary or secondary school that serves students from low-income families can receive grants of up to $4,000 per year. College aid officials and others have complained, however, that the program is deceptive, because the grant immediately turns in to a loan if students fail to meet their commitment to teach for four years following graduation. The change from grant to loan can occur even while students are teaching if their schools move out of the high-needs category. Critics also complain that interest on the grant-turned-loan accumulates from the time of the grant’s disbursement, not when the students broke their commitment to teach. In addition, college have complained that the program will be difficult to administer. Still, supporters of the program say that it is beneficial even for those who forfeit the grant aid, in that these students will have access to an additional $16,000 in federal loans — over and above the current aggregate limits set in the Stafford Loan program — making it much less likely that they will have to take out high-cost private loans to pay for college.

New Repayment Program for Borrowers May Not Help All Who Need it, Report Says

The new Income-Based Repayment (IBR) program that is aimed at helping federal student loan borrowers with economic hardship repay their loans “is not likely to reach many of the neediest borrowers” as currently designed, according to a new paper released this month by the Student Loan Borrower Assistance Project of the National Consumer Law Center. Enacted as a part of the 2007 College Cost Reduction and Access Act (CCRA) and effective as of July 1, 2009, the IBR program limits the amount that borrowers with low earnings must repay on their federal loans. Among other things, the paper points out that borrowers with defaulted loans who choose to participate in IBR are not automatically considered to be out of default. As a result, these borrowers may still be subjected to “collection agency tactics, income tax seizures, federal benefit offsets, administrative wage garnishments and possible lawsuits.” The paper recommends that loan companies be required to give delinquent borrowers the choice of selecting IBR before declaring those borrowers to be in default.