Roundup: News You Need to Know, Fri., Nov. 17th

Community Colleges in California Failing to Graduate Students

A new report by the Public Policy Institute of California finds that Californias community colleges are not doing enough to retain students through graduation. Of students who intend to get a 2-year degree, only 10% actually do so, and of students who plan to transfer to a 4-year institution, only 26% actually do so. The report attributes part of the problem to students being unprepared for college-level work: in California, 90% of community college students take remedial math and 75% take remedial English and writing. Community colleges are not set up to deal with large numbers of unprepared students. In addition, the report finds that community colleges do not provide enough resources to support students in designing programs or transferring to a 4-year institution.

Sale of Illinois Student Loan Agency Short on Details

The Illinois Student Assistance Commission (ISAC) is planning to sell part of the states student loan agencys portfolio, but has yet to provide many details to state legislators. A special hearing on the plan failed to answer questions about the structure of the sale, such as how much of the portfolio ISAC will sell and whether the plan will need the approval of the General Assembly. A portion of the sale proceeds will go to state scholarship grants for low and middle-income students, and universities in Illinois are anxiously awaiting more finalized details so that they can credit their students accounts. The ISAC Chairman expects the first sale transactions to be completed in early January.

Letter from Blunt to MOHELA Calls for Transparency and Public Access

Missouri Governor Matt Blunts office sent a letter to the board of the Missouri Higher Education Loan Authority (MOHELA) earlier this week calling for more transparency. MOHELA board meetings are closed to the public, and the letter recommends that MOHELA open the meetings and generally increase public access. Other suggestions included an annual report of the agencys financial records and a change in vocabulary from calling itself a nonprofit or quasi-state agency to a state board or state agency. In September, Attorney General Jay Nixon sent a similar letter to the MOHELA board. Blunts office says their letter is not a result of Nixons or related to the Governors replacement appointees to the board, but rather was written over concerns about former, fired MOHELA director Michael Cummins $830,000 severance package.

Sallie Mae Stock in Decline after Democratic Takeover

In May, Forbes magazine predicted that Democratic control of Congress would be bearish for student lenders like Sallie Mae and Nelnet. So far, that prediction has proven to be true, as Sallie Maes stock has been declining since the election. A Forbes analyst attributes the decline to investors fear that a Democratic Congress will cut student loan interest rates, reduce student lender subsidies, and support increased competition with the federal Direct Loan program. However, the analyst predicts that student lenders will not actually suffer very much, given rising demand for loans and the potential expansion of student borrowing limits.