After a number of high profile scandals involving for-profit colleges, the Obama administration is considering regulations that could cut their revenue by up to a third. The regulations under consideration would disqualify a school from receiving federal aid if its graduates are unable to pay back loans and would restrict their ability to hike tuition.
For-profit institutions like the University of Phoenix are receiving an increasing share of federal aid. Since 2000, the schools have gone from receiving 4.6 billion to $26.5 billion in 2009. At the same time, many are questioning their business practices.
In 2009, the Government Accountability Office found that students at for-profit institutions are more likely to leave college and more likely to default on their loans than peers at other colleges. The schools have also been consistently hiking tuition by four to six percent per year with one school increasing it by $11,700 last year. Bloomberg also recently found that a number of the colleges are targeting homeless shelters to find new recruits—saddling applicants with loans that they cannot afford.
While the colleges are now claiming they will stop targeting homeless applicants, the Accrediting Council for Independent Colleges and Schools already opened an investigation into the practices at Drake College of Business.
Though the Obama Administration has not released the rules under consideration, the for-profit education industry is already working to stop them. The Career College Association retained the powerful lobbying firm the Podesta Group and is working to get the Congressional Black Caucus to speak on their behalf.
The Chicago Tribune reports that Illinois House Speaker Michael Madigan helped to get nearly 30 students admitted to the University of Illinois system after their family members contributed heavily to his campaigns.
After Chicago Tribune and Daily Illini investigations last year found that politically connected students were being admitted when they shouldn’t be, a number of University officials resigned. Now, a subsequent investigation by the Tribune finds that the powerful Illinois Speaker helped 28 students admitted to the University, only five of whom were from his district. In total, the families of those students contributed $115,200 to the Speaker’s campaigns.
More from the Chicago Tribune
Twenty higher education organizations have come out in opposition to an Obama Administration proposal to condition education tax credits on community service.
While the groups have supported both additional aid and tax credits for higher education and efforts to increase community service, they argue that linking the two will create more harm than good. Specifically, they argue that it would be hard for low-income and older students to complete community service in addition to work and family commitments, that schools don’t have an infrastructure to administer such a program and that it would advantage wealthy students that aren’t dependent on tax credits.
The departments of Education and Treasury are currently studying the idea which Obama first proposed during his campaign.
More from Inside Higher Ed
One year in, the University of Alaska-Fairbanks is struggling to spend a new green fee effectively. As more and more campuses add fees for energy conservation, renewable energy and other environmental sustainability projects, Alaska’s experience highlights key questions schools will need to answer.
Last year, students approved a $20 per semester fee to fund conservation and renewable energy. The University pledged to match the fee resulting in roughly $500,000 per year to fund sustainability projects.
The fee that was approved, however, was intentionally vague and the total budget will likely be larger than the cost of the projects discussed during the fee vote. Now, administrators and student leaders are trying to decide how to spend the money.
Spending plans for the green fee will be split between a campus sustainability office and a student board called RISE (review of infrastructure, sustainability and energy). The campus sustainability office will have 14 part time student staff focused on specific green projects. That effort, however, will still leave a large amount of money unspent, which the RISE board will help to allocate.
Even those boards, however, are still struggling to determine the long-term plans for the fee revenue. As a consequence, administrators are now looking to roll over revenue until the campus has a long-term plan.
More from the Daily News Miner
States across the country are grappling with declining state revenues and corresponding declines in appropriations to higher education. Now, new data shows that this round of cuts may take longer to restore and produce major changes in the makeup of the faculty.
A study released this week by the American Educational Research Association (AERA) shows that while state higher education funding tends to be cyclical, this round of budget cuts will take longer to restore than earlier ones.
While in the 1980’s, 76 percent of funding cuts to higher education were restored within five years, now only 40 percent are. The data also revealed that states imposing large tuition increases to cope with funding cuts took longer to recover since legislators see that those institutions are able to cover their operating budget in other ways.
Across the country, many states felt they had no choice but to pass dramatic increases to tuition over the past two years. Just this week, the University of Virginia board approved a 9.9 percent tuition hike for in-state students and the Virginia Commonwealth University board approved a 24 percent tuition hike.
Cuts are changing more than just the cost of education as more states freeze hiring and move away from tenure track positions. At the University of Minnesota, the number of non-tenure track faculty members increased by 15 percent since 2003 and the number of tenure-track faculty decreased by 20 percent.
Faculty members granted tenure are essentially granted a career-long contract to teach and research at the University. This status allows them to comfortably take on long-term research projects and gives them more freedom to pursue controversial issues in their research and teaching. However, tenure positions provide a university with less budget flexibility since they tend to cost more and are difficult to remove.
Officials at the University of Minnesota worry that the trend of eliminating tenure-track positions will ultimately make the University less competitive and less attractive to students.
Tenured faculty members tend to take on more of the long-term research projects that attract large grants and prestige and have more teaching experience. Because they tend to spend their careers at that campus, tenured faculty are also in a better position to develop new programs and courses.
While the percentage of Arkansas students that graduate in a reasonable time-frame isn’t decreasing, it remains far below other Southeastern states.
A recent report by the state Department of Higher Education shows that only 38 percent of students at Arkansas’s public universities graduate within six years. At community colleges, only 17 percent of students earn an associate’s degree within two years. Across the region, where the average graduation rate is 53 percent, these figures put Arkansas dead last.
Arkansas higher education officials believe their low rates have more to do with external factors—poverty and poor education heading into college—than what happens once students enter a college or university. Last year, 54 percent of new students needed to take remedial classes.
To combat the problem, the state added a new core curriculum for high schools called Smart Core and started a lottery funded scholarship this year.
More from the Texarkana Gazette
For-profit colleges, which get most of their revenue through federal grant and loan funds, are increasingly recruiting homeless students to enroll and take on debt to finance their education.
Over the past decade, grant aid and federal loans awarded to students at for-profit colleges increased from $4.6 billion to 26.5 billion. At the same time, these loan and grant programs have become the dominant part of the operating budget for these schools. Federal funds now comprise 86% of the revenue for the University of Phoenix and 87% of the revenue for the Drake College of Business.
For schools looking to increase enrollment and revenue, low income and homeless students are ideal since they qualify for the most federal grants and loans. College recruiters, whether out of their own ingenuity or direction from their supervisors, are increasingly recruiting students from shelters and other relief agencies.
While many public community college students are also lower income, they also pay less in tuition and graduate with less debt than students at for-profit institutions. Annual tuition at many for-profit schools is between $10,000 and $20,000 and is expected to keep rising. Drake College of Business, for example, increased its tuition by $11,700 this year.
More from Business Week
While most of the country is focused on the impact of Arizona’s new immigration law to immigrant and minority communities, a research association is now also raising alarm bells about the impact the law could have on academic research.
The American Educational Research Association (AERA) passed a resolution opposing the recent Arizona immigration law during their conference over the weekend. Members expressed concern that the new law would make it difficult for many academic professionals to travel in the state and would make research studies on immigrant and Latino communities difficult.
As Kris Gutiérez, the president-elect of the organization put it, “doing this work requires the trust and respect of these communities. Researchers are also held suspect in these communities. You layer onto it the fear of being profiled and deported.”
Gutiérez also noted that many of the researchers were frustrated that the legislative efforts to stop illegal immigration in Arizona and elsewhere seem to ignore the findings of many of their studies.
While study after study shows that student debt is increasing, the College Board recently reported that parents of college students are also taking on alarming levels of debt—up to $71,000 in some cases.
The study, conducted by the College Board, found that when students are taking on high debt, their parents tend to as well. For students with high debt levels, $30,500 or more, 42 percent of their parents had federal PLUS loans of approximately the same amount. Parents that earn at least $100,000 per year now have an average loan burden of $41,000.
The same study found that college costs are also skyrocketing. The overall cost of college has increased nearly 500 percent since 1980.
More from the Star Telegram
After a year where California students saw some of the highest fee increases in the nation, legislators are proposing improvements to the Cal Grant program and Governor Schwarzenegger is promising more money for higher education.
While this year’s cuts and fee increases were higher than usual, the past five years have not been kind to students’ budgets in California. Over that period, fees for University of California students have increased by 61 percent while fees for California State University students have increased by 68 percent.
On Tuesday, Governor Schwarzenegger promised to veto the state budget if it did not include an increase in funding for higher education. His budget proposal included a $224 increase in spending from the general fund for higher education.
Despite Schwarzenegger’s statement, the percentage of general fund spending on higher education spending has declined since he took office, reaching an all-time low in 2006. Schwarzenegger also proposed eliminating the state’s financial aid program, the Cal Grant, in July of 2009 to fill the state’s budget hole.
The Governor’s statement about the budget comes on the heels of Assembly Bill 2447, which would improve the Cal Grant program, passing a key committee vote. The bill would tie financial aid to the rate of inflation and to fee increases. It would also protect the program from cuts by making it part of the “locked budget.”
Cal Grants currently serve 22,500 students statewide.