Roundup: Week of February 11 – February 15

Michigan Non-Profit Lender Pulling Out of Private-Loan Market

Lawsuit takes aim at study-abroad “home – fees”

More Students Pass AP Exams, but Achievement Gaps are Widening

Michigan Non-Profit Lender Pulling Out of Private-Loan Market

Because of concerns about available capital, the Michigan Higher Education Student Loan Authority announced this week that it would temporarily stop issuing private student loans. Citing, “current and unprecedented capital-markets disruption,” the non-profit lender said in a statement on its Web site that it would stop disbursing funds for its private Michigan Alternative Student Loan (or MI-Loan) program, which is used at more than 100 Michigan colleges. The announcement came a day after reports emerged that other companies were having trouble auctioning off their existing private student loans as asset-backed securities to obtain financing to make new loans. Some loan industry officials and their allies in Congress have seized upon the credit turmoil to suggest that Congress went too far last year when it cut taxpayer subsidies to lenders that participate in the Federal Family Education Loan (FFEL) program. In fact, the problems have been almost entirely in the private student loan marketplace, and federal Stafford loans remain universally available to students.

Lawsuit takes aim at study-abroad “home – fees”

While study abroad programs have drawn attention in recent months for alleged conflicts of interest, one parent of a former student is charging that an increasingly common fee structure is “unlawful and deceptive. ” James Brady, the father of a recent Wheaton College graduate filed a lawsuit last Friday against his daughter’s alma mater. In the suit, Brady challenges the Massachusetts school’s use of a “home-fee” tuition policy — in which it charges the full price of a semester at Wheaton even if the student is attending a cheaper Wheaton-sponsored study abroad program. Brady claims that this practice resulted in his daughter paying an extra $4,439 to Wheaton above the $17,000 price tag of her study-abroad program in South Africa. The use of blanket “home-fee” policies has proliferated over the past few years, as schools use the higher payments at least in part to help provide low-income students with institutional financial aid so they aren’t closed off from participating in these programs.

More Students Pass AP Exams, but Achievement Gaps are Widening

More students are passing Advanced Placement exams, but participation and achievement gaps still persist between white and minority students, according to data released this week by the College Board. The number of students passing at least one AP test increased from 11.7 percent of all high school graduates in 2002 to more than 15 percent for the high school class of 2007. At the same time, minority students are signing up for the courses at a rate slower than their white peers. Black students represent about 14 percent of the high school population, yet comprised only 7.4 of those enrolled in AP courses. Hispanic students were better represented, making up 14 percent of AP enrollees versus 14.6 percent of all high school students. However, their participation in courses other than AP Spanish was just 7.5 percent. In terms of achievement, only about 3 percent of the students who received a passing score of 3 or higher on at least one exam were black. Comparatively, about 66 percent of those students were white.