Higher Ed Roundup: Week of June 23 – June 27

Modest Increases Proposed for Pell Grants

Dept. of Ed Details Student Loan Rescue Program

Lawmakers Discuss Need for Increased Regulation of Credit Card Marketing on Campuses

Minnesota Unveils Accountability ‘Dashboard’

Modest Increases Proposed for Pell Grants

Appropriations panels in both the U.S. House of Representatives and Senate have proposed modest increases in spending on the Pell Grant program and some other federal student aid programs for the 2009 fiscal year. On Thursday, the Senate Appropriations Committee approved a spending bill for the Department of Education that would raise the maximum Pell Grant by $69, to $4,800, the same level President Bush proposed in his budget request. The measure would also increase by $5.7 million, to $70 million, funds the government uses to reimburse colleges for Perkins Loans that are discharged when students take public-service jobs. In addition, the legislation would provide a slight increase in spending on the government’s main college outreach programs — calling for an additional $10 million for the TRIO programs for disadvantaged students (raising their total budget to $838 million) and $5 million for GEAR UP (bringing its budget up to $308 million).

The House version of the spending measure, which is pending approval by the House Approprations Committee, would raise the maximum Pell Grant by $169, to $4,900. The House bill would also provide slightly more generous increases for the outreach programs — $30-million for TRIO and $10 million for GEAR UP– but does not include any increases for Perkins Loan forgiveness program. Progress on this bill, however, came to a grinding halt on Thursday, when intense partisan wrangling over gas prices caused the Democratic leaders of the Appropriations Committee to temporarily put off a final vote on the measure.

Dept. of Ed Details Student Loan Rescue Program

The Department of Education released on Wednesday final details about its strategy for ensuring continued student loan availability in the wake of the credit crunch. Under the plan, which the Department first announced in May, the agency will not only buy student loans from lenders, as Congress authorized it to do, but will also purchase for one year “participation agreements” in pools of new loans, temporarily giving lenders a source of cheap capital with student loans serving as collateral. The Department will charge lenders a rate of commercial paper plus 50 basis points for the agreements. On loans that it purchases outright, the government will pay lenders the amount owed on a loan, plus a $75 fee and 1 percent reimbursement of the origination fee paid to the government. During a conference call with reporters, Sara Martinez Tucker, the Department’s under secretary of education, said that the agency’s work on this plan has inspired it to take a closer “look at the entire federal student-aid system.” She suggested that the Department may issue a blueprint for a student aid overhaul before the Bush Administration comes to an end.

Lawmakers Discuss Need for Increased Regulation of Credit Card Marketing on Campuses

College students should be able to obtain credit cards, but there needs to be significantly stricter regulation on how companies market these loans on campuses, according to a hearing before the House Subcommittee on Financial Institutions and Consumer Credit on Thursday. The subcommittee heard testimony yesterday from students, their advocates, and representatives of the credit card industry and the office of New York Attorney General Andrew Cuomo. In general, panelists focused on the need for restrictions on the campus-based marketing and underwriting practices of credit card companies. These proposals included tying students’ credit limits to their current income level, banning abusive or misleading marketing, and providing students with an option to opt out of credit card offers. The lone voice of dissent came from Kenneth Clayton of the American Bankers Association, who claimed such measures would overly infringe on students’ access to credit. The interaction between credit card companies and colleges has been a part of Cuomo’s ongoing investigation, and, according to his deputy counselor, a report on the office’s findings will be released sometime in the fall.

Minnesota Unveils Accountability ‘Dashboard’

Minnesota’s state college and university system has unveiled a online “accountability dashboard,” an accountability system that will provide data, in a creative way, to the public on enrollment, tuition, and graduation rates at its 32 institutions. The database, which includes information on access, affordability, and quality, stems in part from a national effort by the National Association of System Heads to improve the education of low-income and minority students known as Access to Success. James McCormick, the system’s chancellor, said he hopes the speedometer-type approach ” will “jumpstart a culture of accountability” among its member institutions.