Ed Policy Watch

Early Ed Roundup: Week of May 12 - May 16

Christina Satkowski — Fri, 16 May 2008 13:30:00 -0400

Full-Day-K Booming in Iowa, Massachusetts

If you build it, they will come. The Des Moines Register published a story this week about the West Des Moines school district, which will be doubling the number of its full-day kindergarten classrooms next year to accommodate the 600 students who enrolled for the program. Only 17 children had their names on the sign up list for half-day kindergarten. Heading east, 95 percent of kindergarten parents in Lexington, MA opted for a full-day program next year, the first year that FDK will be offered in the district. Like their counterparts in Iowa, Lexington administrators are facing challenges of finding teachers and classroom space to accommodate the higher enrollment.

Pre-K on Page One

USA Today highlighted the wopping 63 percent increase in public pre-k enrollment between 1995 and 2005, and in the process painted a portrait of pre-k in America that we don't often see in major dailies. Referencing a recent RAND report, the article emphasizes the importance of providing adequate state funding to ensure high quality standards in pre-k programs.

Report Calls for Fine-Tuning Florida Pre-K Evaluation

A new report from the Florida legislature's accountability office raises questions about the assessment that the state is using to hold providers in the state's Voluntary Pre-Kindergarten (VPK) program accountable. According to the report, more than 60 percent of children who attended Florida's VPK program were ready for kindergarten, and VPK participants had a higher level of kindergarten readiness than children who did not attend the program. The effect of VPK was especially pronounced among low-income children and English-Language Learners. But the accountability office is concerned that flaws in the assessment may lead to providers being inappropriately labeled as low-performing when they are not. In particular, the report expresses concern that providers serving minority and low-income are disproportionately labeled as low-performing. The report recommends changes in the readiness rating methodology, as well as additional assistance to help low-performing providers improve.

Higher Ed Roundup: Week of May 12 - May 16

Ed Policy — Thu, 15 May 2008 19:16:00 -0400

Credit Crunch Easing for Student Loan Providers?

Dept. of Ed Relaxes Preferred Lender Rules

Sallie Mae Computer Glitch Sends Credit Scores Falling

Report Illustrates Disparities Between States in Community College Use

Credit Crunch Easing for Student Loan Providers?

There were signs this week that the effects of the credit crunch on the student loan industry may be lifting. Nelnet, a Nebraska-based lender, successfully sold $1.35 billion worth of bonds backed by federal student loans this week with substantially lower financing costs than its previous sales. Industry experts took this as a positive sign that investors are becoming less wary of federal student loans, which have long been considered among the safest investments because of their implicit backing from the government. Nelnet's sale follows on the heels of favorable sales of student loan bonds by JP Morgan Chase and the Rhode Island Student Loan Authority. The latter was the first successful "U.S. municipal offering backed by student loan revenue this year," according to Bloomberg News. Speaking at a loan industry conference on Thursday, some investment banking officials expressed cautious optimism about the sales. "We've still got a long ways to go," a Bank of America representative told the Chronicle of Higher Education. "But at least we're headed in the right direction."

Dept. of Ed Relaxes Preferred Lender Rules

Just months after the Department of Education put into place new regulations governing the relationship between colleges and federal student loan providers, the agency appears to be backing off to some extent. In a letter to colleges last Friday, a top Education Department official said that as a result of the credit crunch, some colleges may have trouble complying with the requirement that they recommend no fewer than three unaffiliated lenders to their students. In such cases, colleges will be allowed to recommend fewer lenders, as long as they make clear that they are not endorsing a specific loan provider. Under criticism from groups representing financial-aid administrators and the loan industry, the Department also reversed an earlier interpretation of the rules that would have blocked colleges from including affiliated loan providers on their preferred lender lists. As long as schools list at least three unaffiliated lenders, they now can add others that have the same owners. While college and lender lobbyists applauded the Department for being flexible, some advocates for students questioned whether the agency is relaxing the rules because the student loan scandals have receded from the headlines.

Sallie Mae Computer Glitch Sends Credit Scores Falling

Nearly one million student loan borrowers saw their credit scores plunge last weekend because a computer glitch at Sallie Mae caused their accounts to be coded as delinquent. On Friday, the student-loan giant mistakenly included borrowers who have taken advantage of graduated and extended repayment plans among those who have made only partial payments, leading the credit reporting firm Equifax to label their loans as overdue. As a result of the error, some borrowers' credit scores dropped by as much as 100 points or more. A Sallie Mae spokesman said that the situation has been corrected and that borrowers should not face any penalties as a result of the snafu.

Report Illustrates Disparities Between States in Community College Use

States that charge lower tuition for community colleges have higher enrollment rates, according to a new report from the Rockefeller Institute of Government in New York. Average tuition in California, which enrolls more than 5 percent of its 18-plus aged population in community colleges was $674 whereas New Hampshire, which charges $5,614 annually, has a community college enrollment rate of less than 1.5 percent. In all states, the cost of attending a community college is less than attending a four-year college and in 18 states, the community college tuition was half that of a four-year school or less. States with the smallest population, such as West Virginia and Maine, posted the largest growth rates in community college enrollment between 2000 and 2005 (66.7 and 40.5 percent, respectively).

Cost-Effectiveness and Trade-Offs in Early Education

Sara Mead — Thu, 15 May 2008 18:58:00 -0400

Two new studies released this week aim to help policymakers make sound choices about early education investments.

In Meaningful Investments In Pre-k, researchers from the Institute for Women’s Policy Research estimate what it actually costs to provide quality pre-k programs. To estimate the costs of quality pre-k programs, the IWPR researchers identified the characteristics of high-quality pre-k programs—qualified teachers, small class sizes, appropriate educational materials, and so on—and arrived at research-based estimates of what it actually costs, on a per-child basis, to provide those things. They also estimated the cost of appropriate facilities and of state-level support and oversight infrastructure needed to ensure pre-k quality.

The researchers estimated the cost of pre-k at a variety of quality levels, varying quality in terms of both teacher qualifications/compensation and class size. They also estimated the difference in costs of half-, full-, and extended-day programs. Estimates ranged from a low of $3,214 dollars per child, per year for half-day pre-k programs taught by teachers with a CDA (a child development credential that is less than an associate’s degree) in classrooms of 20 students, to a high of $13,649 per child, per year for extended-day pre-k programs, taught by bachelor’s degree teachers paid under public school salaries, in classrooms of 15 students.

The sad reality is that most states are spending nowhere near this much money per pupil on pre-k, even compared to more modest quality standards. Pre-K programs in 10 states are spending less than even the $3,214 per child IWPR estimates is necessary to provide just the lowest-quality pre-k! The National Institute for Early Education Research estimates that only 19 states are spending enough money to meet quality standards, and all but 4 of those provide only half-day programs.

Fortunately for policymakers seeking to raise quality, the IWPR study also provides estimates of the marginal cost to improve state pre-k quality standards. For instance, for a full-day program with associates degreed teachers and classes of 17 students, it would cost about 12 percent more to raise teacher education requirements to a bachelor’s degree, while it would cost about 8 percent more to reduce class size to 15. These estimates can be useful for policymakers weighing the costs of different policy alternatives.

What the IWPR study doesn’t provide, however, is information on cost effectiveness of different quality improvements: That is, if I’m a legislator seeking to improve pre-k quality or access in my state, what investments give me the biggest bang for my buck? Should I invest marginal dollars in class size reduction, or on raising teacher credentials, or should I leave quality be and increase the number of children served?

A recent RAND paper on the Economics of Early Childhood Policy notes the lack of adequate evidence to answer these questions. We know what the characteristics of high-quality programs are and, to some extent, what they cost. We also know that very high-quality programs have been demonstrated to have clear impacts in terms of improving children’s school and long-term outcomes, and generating positive returns for society as a whole. But we don’t know what kind of returns marginal investments in improving quality produce, nor do we know which marginal quality improvements produce the greatest marginal benefits. We also don’t know whether or not there is a minimum threshold for quality below which early educational investments do not produce positive returns. These are critical questions for policymakers seeking to make smart early education investments with limited public resources. Developing better evidence on cost-effectiveness of different marginal early education investments should be a research priority for the early childhood field.

The RAND report is worth a read because it steps back from the common rhetoric about return on investment from early education programs to take a hard look at the economic theory of what we mean when we say that early education programs produce returns on public investment. Researchers Rebecca Kilburn and Lynn Karoly also dive into the tough questions of trade-offs that policymakers must make between different types of early childhood investments, as well as between quality and quantity for any given early childhood investment, and offer a variety of frameworks for researchers, advocates, and policymakers to think about these investments. Ultimately, they conclude that policymakers need to think about early childhood investments as a portfolio, allocating funds to a variety of strategies that contribute to desired outcomes for children, rather than focusing on a single approach or considering early childhood programs in separate, isolated silos.

One of these studies answers some important questions that policymakers have in creating early education programs, but in the process, it also raises some. The second study raises similar challenging questions, as well as some others around trade-offs for early education, and, while it does not provide answers, offers some useful frameworks to start working on them.

Loans of Last Resort: A Program Only Rube Goldberg Could Love

Ben Miller — Thu, 15 May 2008 15:58:00 -0400

The Department of Education recently announced modifications to its lender of last resort program as part of its effort to prepare for the possibility of federal student loan shortages as a result of the credit crunch. The net result is a contraption Rube Goldberg would be proud of -- what in effect are direct student loans that are more difficult to administer and more costly for taxpayers than the regular Direct Loan program.

The lender of last resort (LLR) program is designed to ensure all students have access to Federal Family Education Loans (FFEL) by requiring that guaranty agencies provide loans to students that have been turned down by conventional lenders. Though we support guaranteeing access to student loans, the similarities (and costly differences) to the regular Direct Loan program make LLR a significantly inferior option. In fact, Washington appears to be trying to avoid the more obvious and efficient solution -- boosting the regular Direct Loan program.

Here are five similarities between the new but hardly improved LLR program and the regular Direct Loan program:

Federal Guarantee: While the government reimburses lenders for 97 percent of a FFEL loan that goes into default, it is on the hook for 100 percent of an LLR loan. Since Direct Loans are obligations from the U.S. Treasury, they effectively have a 100 percent guarantee.

Funding Source: The Secretary of Education is permitted to advance U.S. Treasury funds to guaranty agencies for the purposes of making LLR loans. The Department disburses Direct Loans using Treasury funds.

Terms and Conditions: According to the Department of Education, borrowers who take out an LLR loan will have "the same rights, benefits, and obligations" as those who receive FFEL loans. Federal law also requires that Direct Loans have the same terms and conditions as those offered through FFEL.

School-wide Eligibility: Currently, student loan applicants become eligible for a LLR loan only after they have been turned down by two FFEL lenders (only one in some states). However, under the recently signed Ensuring Continued Access to Student Loans Act of 2008, the Education Secretary will be able to designate whole institutions as eligible for LLR loans. Schools using Direct Loans also receive institution-wide eligibility.

Loan Ownership: Similar to Direct Loans, LLR loans made with advanced Treasury funds are assets of the U.S. government.

So let's get this straight. Under the LLR program, loans would be made with Treasury funds and have the same terms and conditions as FFEL loans. They would carry a 100 percent guarantee, and could be granted on an institution-wide basis.

If it looks like a Direct Loan and it functions like a Direct Loan...

But the LLR program isn't a carbon copy of the regular Direct Loan program. In fact, the Department has added provisions that make the program more complicated and costly to taxpayers, such as:

Requiring Additional Federal Payments: With the regular Direct Loan program, the government's initial expenditure is equal to the principal of the loan. But under LLR, the Department would provide a fee to a guaranty agency for "originating and servicing LLR loans made with advances." The government would thus provide money to make the loan and then give the guaranty agency MORE money to agree to originate a loan with ZERO default risk.

Designating the Debt as FFEL Loans: As we noted earlier, borrowers have nearly the same terms under the two federal student loan programs, with at least one notable difference: Direct Loans can be partially forgiven for public service. Under the Department's LLR plans, however, the guaranty agency must assign to the Secretary any loans made with federal advances that she requests. These assigned assets will still be considered FFEL loans, meaning a borrower could end up with a loan owned by the government with inferior terms to other Department-held loans.

A K.I.S.S. for the Department

The Department has put a lot of effort into ensuring the LLR program functions properly. But is it worth the trouble? The government has never put LLR to use on a wide scale before. Do schools really want to put their trust in an unproven system? A regular Direct Loan could provide better terms for borrowers, with the same financing source, school-wide eligibility, and guarantee rate -- without having to make additional payments to other agencies.

If this is the general direction the Department wants to pursue in response to the credit crunch scare, it should follow a lesson we all learned in elementary school -- when faced with complex problems, the best solution is to keep it simple, stupid.

Promising Proposals for Funding and Accountability in New Mexico

Lindsey Luebchow — Wed, 14 May 2008 14:00:00 -0400

The New Mexico legislature has been working to increase and better target K-12 education funding to school districts with high-need students. Governor Bill Richardson and the legislature appointed a Funding Formula Task Force in 2005. The Task Force commissioned a comprehensive study of New Mexico’s public school funding formula, including an estimate of how much it would cost the state to provide a "sufficient" education to all students.

The American Institutes of Research released the New Mexico funding study in January, and concluded that "sufficient" state funding for education would require an increase of $335 million ($1,034 per-pupil), or 14.5 percent above the current $2.5 billion in spending. When the legislative session ended in March, the legislature was in the middle of considering legislation to boost spending and overhaul the state funding formula. This week, the Legislative Education Study Committee is meeting to discuss the impact of the proposed formula.

New Mexico included a critical step in this process that other states have too often left out: accountability. Without accountability, there is no way to ensure that school districts use increased funds efficiently and effectively. Any sustainable argument for additional resources requires accountability.

New Mexico, in contrast, has embraced the need for accountability measures, as Michael Rebell noted on his blog EdFunding Matters. One of the funding study's recommendations was that the state require districts to align their spending plans with their current "Educational Plans for Student Success (EPSS)." An EPSS is a strategic plan developed by every school district and individual school in New Mexico that "sets clear goals, implementation strategies and evaluation measures" for student achievement and school improvement. They include achievement benchmarks for NCLB reading and math tests and specific strategies and interventions for reaching those benchmarks. The new legislation would expand the EPSS to include achievement in other areas, such as career and technical education and special education.

The EPSS system appears to be similar to the Contracts for Excellence in New York, an accountability program that was put in place after the New York legislature approved a significant increase in state education funding last year. 55 New York school districts—those that have schools in need of improvement and receive a certain amount of the new state aid—have filled out Contracts for Excellence. The Contracts require districts to target their new funds to at-risk students and proven programs, to set performance targets for improvement, and to publicly report the results.

In moving forward with any new state funding plan, New Mexico—and all other states—should wholeheartedly embrace and emphasize accountability in a fashion similar to New York. Individual district accountability plans give school districts the flexibility to define their own goals and to select the best route to achieve them. But the state retains the power of quality control, as it must approve and monitor how the district chooses to spend its funds. And there must be total transparency for the public about the spending choices and results.

Unfortunately, a few school officials in New Mexico have already started to express concerns that any revamped EPSS system would be too much of an administrative burden.

Here’s a warning to those officials: if you want more money on a consistent basis, year after year, it would be extremely wise to accept and support increased accountability measures. If schools don’t prove to the public and the state legislature that the new money is producing results, lawmakers will take it back much faster than they gave it up.

Swiped into Debt

Ben Miller — Wed, 14 May 2008 13:39:00 -0400

Increasingly, colleges are forging agreements with credit card companies, whereby schools profit from student borrowing. It may be good business, but persistent credit card marketing on campus and subsequent heavy use by students is putting many on a fast track to debtors' prison.

Credit card company - college deals take a variety of forms. A common deal revolves around what are called "affinity agreements," whereby a colleges' logo is emblazoned on a credit card. In exchange for a college's imprimatur, the relevant credit card company sends back to the school in question, their alumni association, or their athletics department a share of revenue generated from student or alumni purchases.

The University of Tennessee, for example, used to have a multi-year affinity agreement with First USA worth $16.5 million. It's now in the midst of a similar $10 million contract with Chase. Ohio State University, which enrolls over 60,000 students, has an affinity agreement arrangement with Bank of America, though the terms have not been disclosed.

Other credit card company - college deals involve institutions providing ready access to students and student contact information. Colleges provide credit card companies with personally-identifiable information about their students in exchange for cash payments. The companies then use the data -- which can include permanent addresses, e-mail addresses, and local telephone numbers -- to market credit cards directly to students. Some colleges go even further, providing companies with face-to-face access to students -- allowing salespeople, for example, to set up marketing tents in central campus hubs.

Until recently, the University of Iowa had a deal with Bank of America in which the bank provided the school with $200,000 annually in exchange for students' local mailing address (six times during the year), e-mail address (four times), local telephone number (twice), and current home address (once). Bank of America also was also allowed to market cards on campus 14 days a year. The level of access doubtlessly contributed to added financial strain to University of Iowa students who already carry some of the highest levels of federal and private student loan debt in the nation. [Note: After the Des Moines Register ran a series of articles calling attention to the arrangement, the University of Iowa renegotiated its deal.]

Nationally, big money is involved in these credit card company - college deals. According to BusinessWeek, Bank of America has agreements with roughly 900 colleges across the United States. A credit card industry survey estimates that as of the end of 2006, 320 million college-affiliated credit cards were in use, accounting for $849 billion worth of transactions. Revenue sharing with institutions of higher education resulted in an estimated $1 billion in transfers to the nation's 300 largest colleges.

Debtor Nation

Students pay a heavy price for credit card companies' hefty profits. A recent survey by a federation of public interest groups (U.S. PIRG) found that college seniors who didn't pay off their monthly credit card statement reported carrying an average balance of $2,623. Those with student loans reported even more debt. College seniors with previous defaults carried an average balance of $4,116. But the credit card companies aren't just interested in student borrowing.

Going after students is a long-term play by credit card companies. Investing millions to gain access to campuses may seems like a substantial payment, but students are a captive and inexperienced market likely to generate both short, and more importantly, large, long-term returns.

Over 70 percent of students keep their first credit card for years, meaning companies can attract thousands of potential lifetime customers for what is essentially a pittance given how much customers will rack up in future credit card debt. The average American credit-card holding household owes $9,659 on their cards; that's 226 percent higher than the same figure in 1990. About two million American households owe more than $20,000 on their credit cards.

We've seen the myriad and creative ways schools use revenue deals with private businesses to sell out their students and put them at risk of severe financial difficulties. Maybe the schools should start thinking about long-term plays just as the credit card industry does. It's pretty hard to make alumni donations when a large share of your monthly income is going to pay off the plastic.

Guest Post: Six Principles for Financial Aid Reform

Ed Policy — Tue, 13 May 2008 14:00:00 -0400

By Art Hauptman

There is widespread agreement among financial aid analysts and practitioners that our country's student aid system is not working as effectively as it could be. Many believe that the solution to this problem is to have the federal government substantially increase the amount of money it spends on the existing student aid programs.

I disagree. The federal government currently spends roughly $40 billion for grants, college work study, loan subsidies, and tax breaks for college -- more than enough to achieve the programs' goals if they were operating effectively and efficiently. As I argued last week, the current structure of student financial support in this country needs to be changed in fundamental ways.

Federal aid programs and tax benefits should be molded into a more comprehensive and comprehensible whole. This would entail some program consolidation and a much better coordination of federal programs and policies with each other. The federal government should also strengthen the incentives it provides states, colleges, and the private sector so that these entities complement, rather than complicate, its public policy goals. Such a system should adhere to the following six principles:

It should be much simpler for students and their families to apply for aid and for college officials to administer it. The current application process serves as a huge barrier to access for many students and families, especially those most at-risk.

A modest amount of self help in the form of loans or work should be required of all students, although institutions should be encouraged to cover some or all of this self-help component for students from the most impoverished circumstances.

The largest proportion of assistance should be targeted on the most at-risk students. This greater commitment to targeting of benefits should include federal and state policies, institutional practices, and private sector initiatives.

Tuition tax breaks should be the primary form of non-repayable aid for middle class students and lifelong learners who are already in the work force. Tax benefits are much better suited for these two groups of students than cramming them into the already strained traditional student aid programs.

The federal student loan programs should be restructured to reduce the adverse effects of growing debt burdens and to stem instances of program abuse. The policy focus should shift from the traditional emphasis on when the loan is made to more attention being placed on helping borrowers when they enter repayment.

Greater reliance should be placed on non-financial aid activities to improve the preparation and increase the aspirations of students most at-risk. Student aid is clearly not enough when it comes to the riskiest students; reaching them in various ways while they are in grade school or middle school is clearly key to greater success.

By taking the following three steps, policymakers can accomplish the kind of reform that is needed without spending any additional money:

Federal student aid programs and tuition tax benefits should be integrated in a systematic way. Many student aid advocates have suggested doing away with the current range of tuition tax benefits and using the savings to increase spending on need-based financial aid. Others have suggested making the tax credits refundable. A better approach is to recognize the need for tax benefits -- both to offset current tuition expenses and stimulate more college savings -- and integrate the tax system with federal student aid programs: before, during, and after college.

The federal government should be more aggressive in seeking to increase the access and success of the students from the lowest income families. Federal policy makers have tended to rely on expanding Pell Grants as the means for helping low-income students. But it is increasingly obvious that other policies are needed to achieve this goal, including more early intervention through GEAR UP and related efforts, and providing incentives for institutions to require less borrowing from these students. It would also be worthwhile to consider establishing college savings accounts for poor but promising students to raise their aspirations.

A student-centered seamless federal student loan structure should be created. Federal student loan policies and practices have been central to postsecondary policy debates for the past several decades, with the primary focus over the past 15 years on whether loans should be financed directly by the federal government or privately financed. But the ‘direct loan' debate has obscured a number of other critical issues related to the provision of student loans, including the complexity of the system and whether federal policies contribute to rapidly mounting student debt burdens. We should consider how the federal student loan structure can be streamlined so that all loans have the same terms and conditions and real relief is provided to borrowers in trouble when they reach repayment.

These three sets of reforms could be paid for largely through changes in the student loan programs that would: restrict the in-school interest payments that the government makes on behalf of students in the subsidized Stafford Loan program to Pell Grant recipients; increase the share of federal student loans provided through the Direct Loan Program; and use auction mechanisms to determine a market rate of return on federally guaranteed loans and thereby drive down federal payments to lenders. In addition, improving coordination between the Pell Grant and tax credit programs would create some savings by making students from middle-income families ineligible for Pell Grants. This change would justify increasing tuition tax benefits for middle-class students and their families through the consolidation of existing tuition tax breaks into a new single expanded tuition tax credit.

Future posts will consider how adopting these reforms could lead to a reinvigorated system of student financial support in this country.

Art Hauptman is an independent consultant on higher education finance issues. His guest blog column will continue to appear each Tuesday in the month of May. The views expressed herein are his own and do not necessarily reflect the positions of the New America Foundation.

Featured Abstract: The Anemic Response to Skill Premium Growth

Sara Mead — Sun, 11 May 2008 20:45:00 -0400

A new paper by Joseph G. Antolji, Prashant Bharadwaj, and Fabian Lange looks at whether or not American youth have responded to increasing economic rewards for skills and education by investing more in skills and education:

We examine changes in the characteristics of American youth between the late 1970s and the late 1990s, with a focus on characteristics that matter for labor market success. We reweight the NLSY79 to look like the NLSY97 along a number of dimensions that are related to labor market success, including race, gender, parental background, education, test scores, and variables that capture whether individuals transition smoothly from school to work. We then use the re-weighted sample to examine how changes in the distribution of observable skills affect employment and wages. We also use more standard regression methods to assess the labor market consequences of differences between the two cohorts. Overall, we find that the current generation is more skilled than the previous one. Blacks and Hispanics have gained relative to whites and women have gained relative to men. However, skill differences within groups have increased considerably and in aggregate the skill distribution has widened. Changes in parental education seem to generate many of the observed changes.

In other words, they haven't, at least not as much as we might expect given the significant increase in labor market returns to skills and education. In fact, about two-thirds of the increase in young people's skills since 1979 is due simply to the fact that their parents are more educated, and inequities in skill distribution have increased.

In another article, the authors look at possible explanations why the response might have been so anemic. One potential answer is that many young people's ability to increase their investment in education and building their skills is constrained by their earlier educational experiences--in other words, children who did not get a high quality early education earlier in their preschool, elementary, and middle school years lack the skills and preparation to seize educational opportunities in high school and college:

Research summarized in Cunha and Heckman (2007) suggests that part of the explanation might be that parental investment during early childhood shapes the potential to acquire additional skills later in life. Parents might not have responded to the increase in labour market returns, perhaps because they were not fully aware of the large increase in the returns to skills or because their children’s labour market success might not be the primary motivating factor in determining the time and resources they devote to their children.

To enable more young people to respond to incentives and upgrade their skills in response to demand, we must improve early childhood and elementary school education, and also improve education and support for parents, so that they understand the economic realities facing their children and have the resouces and skills to support their children's learning in early childhood and beyond.

Early Ed Roundup: Week of May 5 - May 9

Christina Satkowski — Fri, 09 May 2008 14:13:00 -0400

Plan Underway to Consolidate California Preschool Programs

California State Superintendent of Instruction Jack O'Connell joined California lawmakers on Tuesday to unveil a legislative package that would combine the state's five early education and family programs into one, to be called the California State Preschool Program. The new program, which would include the existing California State Preschool Program, Full-Day State Preschool, the Pre-Kindergarten and Family Literacy Program, Pre-Kindergarten and Family Full Day, the General Care and Development Program would have an $816 million budget, making it the largest preschool program in the country. Local government officials praised the plan, which is designed to help streamline services and cut administrative costs. Currently some local educational agencies administer all five programs at once; with the new umbrella program they say they can redirect funding once used for paper-pushing towards instruction.

Bright Horizons Bought Out by Boston Firm

Bright Horizons, a for-profit childcare company that operates more than 600 centers (many employer-sponsored) in the U.S. and abroad, accepted a buyout offer this week from Boston-based Bain Capital Partners. The Service Employees International Union (SEIU), which represents Bright Horizons childcare workers, sent a letter to company executives seeking reassurance that the $1.3 billion deal will not lead to cuts in staffing or program quality that would ultimately affect children and their families.

Budget Cut in Connecticut Hits Early Reading Program

Connecticut school districts could lose $20 million in early literacy funding. Last year the state passed a two-year budget plan that funded the decade-old Early Reading Success program for the 2007-08 fiscal year but not for 2008-09. Legislators promised school administrators that they would restore funding for the program this year. But this year, facing a $67 million budget deficit, Governor Jodi Rell and legislative leaders are pursuing a "do nothing" budget--meaning no money for new programs--that fails to fund the Early Reading Success program. Coming on top of cuts in federal Reading First funding, this could mean serious reductions in the early literacy programs and support Connecticut schools can offer, and school officials worry that loss of the Early Reading grants could result in lower student performance.

Higher Ed Roundup: Week of May 5 - May 9

Ed Policy — Thu, 08 May 2008 17:44:00 -0400

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]