Higher Ed Roundup: Week of May 5 – May 9

White House, Fed Move on Student Loans

Lawmakers Mobilize to Boost G.I. Education Benefits

Education Department Puts Off Review of ABA as Law School Accreditor

Coalition Offers Help to Schools Considering Switch to Direct Lending

White House, Fed Move on Student Loans

President Bush signed a bill into law on Wednesday that aims to increase federal loan options for students and ease the effects of the credit crunch for lenders that participate in the Federal Family Education Loan (FFEL) program. The measure will increase the annual and aggregate federal unsubsidized Stafford loan limits, allow parents to defer payments on PLUS loans while their children are in school, and establish the Department of Education as a “secondary lender of last resort” with the power to purchase outstanding FFEL loans and service them through the Direct Loan program. On Friday, the Federal Reserve announced that it would provide further help to lenders by allowing them to swap student loan backed securities for Treasury bills through its 28-day term lending facility. The move was designed to inject liquidity into the student loan market. Some loan companies, however, remain unsatisfied and continue to push for an even bigger bailout.

Lawmakers Mobilize to Boost G.I. Education Benefits

Congress is set to debate two competing G.I. bills that would increase education benefits for service members returning from Iraq and Afghanistan. The first bill, S.22, sponsored by Sen. Jim Webb (D-VA), would cover up to the full cost of attendance at the most expensive public college in a veteran’s home state for those who served in the military after Sept. 11, 2001. Under the measure, tuition and fees would be paid directly to colleges, averaging about $1,700 a month per veteran, up from the current $1,101. The bill, which may be inserted into the $108 billion emergency Iraq War funding bill to ensure a quick vote, has received bipartisan support. The Bush Administration, however, opposes the bill, saying it would be too costly and difficult to administer, because maximum benefit awards would have to be calculated on a state-by-state basis. Administration officials also fear that the legislation would harm the country’s all-volunteer force by enticing soldiers to leave the military to pursue their studies. Instead, they have thrown their support behind S. 2938, sponsored by Sen. Lindsey Graham (R-SC), which would continue the tradition of paying a fixed award directly to veterans, set at $1,500 a month. Sen. John McCain (R-AZ), the presumptive Republican presidential nominee, is backing that bill.

Education Department Puts Off Review of ABA as Law School Accreditor

The Department of Education has decided to delay its review of the American Bar Association’s status as an accreditor of law schools for six months, so it can take more time to investigate allegations that the association has overstepped its authority by requiring its members to demonstrate that they are taking “concrete action” to diversify their student bodies and faculties. Over the past decade, the ABA has withstood much criticism that its standards are poorly monitored and unrelated to law school quality. But the accreditor has come under intense fire from conservative groups since 2006 when it began requiring schools to meet its “Equal Opportunity and Diversity” standard. These organizations contend that the ABA is requiring law schools to employ racial preferences that are unlawful in some states. The upcoming review, which will now take place in December, could result in the ABA losing its status as the nation’s sole accreditor of law schools.

Coalition Offers Help to Schools Considering Switch to Direct Lending

The National Direct Student Loan Coalition has announced that it will step up its efforts to assist colleges considering switching into the Direct Loan program. The announcement comes on the heels of a recent survey that showed as many as 20 percent of colleges, citing instability in the student loan market as a result of the credit crunch, were thinking about transitioning from the Federal Family Education Loan program to Direct Lending. Among other things, the coalition is starting a mentor program in which officials from Direct Loan schools will help provide technical and operational advice to colleagues considering making the move. In addition, the coalition is co-hosting an online event with the National Association of College and University Business Officers on May 20 “to provide an overview of campus operations under the Direct Loan program, the steps involved in switching, and address the many questions being raised” by college officials contemplating the switch. [If interested, register for the event here]