Washington Update

Obama Extends Educational Loan Repayment Option to More Borrowers

Education | Permanent link
On June 9, President Barack Obama issued a presidential memorandum to permit nearly five million federal student loan borrowers with outstanding student loan balances to cap their monthly payments at 10% of their incomes.

Lawmakers Seek to Block Proposed College Ratings System

Education | Permanent link
Congressional opposition to the Obama Administration’s plans to develop a college rating system continues to mount.

ADEA Submits Comments to Proposed Gainful Employment Final Rule

Education | Permanent link
In a May 27 letter to U.S. Secretary of Education Arne Duncan, ADEA submitted comments to the department’s proposed gainful employment regulation.

Sexual Assault on Campuses in the Federal Spotlight

Education | Permanent link
As part of its continuing effort to publicize the problem of sexual assaults at U.S. colleges and universities, the Department of Education has released a list of 55 higher education institutions under investigation for possible violations of Title IX, due to their handling of sexual violence and harassment complaints.

Brookings Institution Examines Rise in Student Loan Debt

Education | Permanent link
Last year, U.S. student loan balances reached $1.2 trillion, according to a new study by the Brookings Institution. The figure exceeds the value of any other debt category except mortgages.

U.S. to Earn $66 Billion from Student Loans Despite the Program’s Uncertainty

Education | Permanent link

It is difficult to know with certainty the future costs of the federal student-loan program, and therefore almost impossible to set an interest rate that guarantees the government does not make too large a profit or simply break even, according to a study from the non-partisan Government Accountability Office (GAO). The GAO’s January 31 report says the government is on track to generate $66 billion in income from loans it made between 2007 and 2012. That number is simply an estimate, however, because the real cost or profit of a student loan to the government can fluctuate wildly each year, depending on such things as the amount of money the borrowers repay and the government’s own borrowing costs. For example, the GAO report says that the government initially estimated it would make $9.09 for every $100 in loans it disbursed in FY08. But just one year later, it estimated that those same 2008 loans would actually cost taxpayers 24 cents per $100 disbursed. As a result, the GAO study was unable to provide a particular interest rate that borrowers should be charged in order for the government to break even. The report is the latest in a two-year debate over the interest rate the government should set for student loans. Last year, legislation was passed tying the interest rate for student loans to 10-year Treasury notes, which put the rate at 3.9% for undergraduate borrowers and 5.4% for graduate students, lower than those offered by private lenders. The total cost of the student loan program to the government is also clouded by the growing administrative costs that have arisen as the Department of Education handles an increasing number of student loans previously handled by banks. According to the GAO study, the department spent $864 million administering Direct Loans in 2012, more than twice as much as the $314 million it spent in 2007.

Sen. Marco Rubio (R-FL) Proposes Accreditation Reform

Education | Permanent link

Florida Republican Sen. Marco Rubio (R-FL) has proposed setting up a new independent board to accredit free online courses, in addition to announcing his support for a proposal by Sen. Mike Lee (R-UT) permitting states and companies to accredit academic courses. The White House has also floated the idea of creating a new system of accreditation aimed at measuring both the cost and value of higher education, with those measurements linked in some way to federal financial aid. Rubio explained in a February 10 speech: “Action on this issue can and should be swift... Members of both parties are beginning to realize that for every day we delay bold accreditation reform, our education system leaves more Americans behind to languish in a dwindling market.” Rubio suggested prioritizing two other notable higher education proposals: setting the default payment plan for federal student loans as income-based, and creating an alternative to student loans known as “Student Investment Plans” to be used to pay for college tuition. These plans would be run by an “approved and certified private investment group” that would finance a student’s tuition in exchange for taking a fixed percentage of that student’s income for a set period of time after the student graduates. The Student Investment Plan would consider a student’s major of study, matriculating institution and academic record to develop a repayment formula.

Impact of FY 2014 Appropriations on Academic Dentistry

Education | Permanent link

On January 17, 2014, President Obama signed into law the Consolidated Appropriations Act of 2014, H.R. 3547. The bill provides $1.012 trillion for domestic discretionary programs in FY14. The bill includes amounts to offset the effects of the FY13 budget cuts known as the sequester. Overall, the appropriation includes increases over FY13 funding for most of the programs of concern to academic dentistry.

Obama Administration Addresses College Access for Low-Income Students

Education | Permanent link

Colleges and organizations participating in a recent White House summit meeting on higher education committed to a range of actions to help low-income students, including providing more scholarships to those pursuing careers in science, technology, engineering or mathematics (STEM) fields. 

Department of Education Releases Gainful Employment Disclosure Template

Education | Permanent link

The U.S. Department of Education (ED) has announced the release of a template, which institutions that offer “gainful employment” programs must use to meet their disclosure responsibilities under regulation 34 CFR 668.6(b). Use of the template will ensure that prospective students have a complete set of information that they can use to compare programs. Gainful employment regulations apply to allied or advanced dental education programs that terminate with the awarding of a certificate but not a degree. Negotiators in December failed to reach a consensus on proposed gainful employment standards for vocational programs at for-profit institutions and community colleges. The disclosure template produces an output document that includes all of the required gainful employment disclosures. It also provides compliance with a requirement that disclosures be done in an open manner and ensures that the information will be accessible to individuals with disabilities. The department also released new guidance on how institutions should display links to their disclosures from various pages on their websites. Institutions were required to use the template to meet their Jan. 31, 2014 disclosure requirements. Additional information and a Quick Start Guide are available here.  

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