Scandal

Prostitutes and Pre-K

Sara Mead — Wed, 12 Mar 2008 10:57:00 -0400

By now anyone with access to a television, radio, newspaper, or internet connection knows that New York Governor Eliot Spitzer has become ensnared in a federal investigation into an interestate prostitution ring. It's a major disappointment for both his family and the people of the state of New York. The internets are abuzz with speculation about the salacious details and whether or not Spitzer will step down as governor. As a family blog, we'll eschew the tawdry aspects of this story to ask a substantive question: What does this mean for early education in New York State?

New York's been a happening state on early education lately. Last year Spitzer, who made pre-k expansion and school reform key planks of his 2006 election campaign, and the legislature increased universal pre-k funding by nearly 50 percent, expanding pre-k access to another 44,000 four-year-olds after years of stagnant funding under Gov. George Pataki. Pre-K Now, a national advocacy group on high-quality pre-k, has lauded Spitzer's efforts on behalf of early education, and he's also won raves from school reformers for his support for accountability, charter schools, and school finance reform. New York still has a long way to go on pre-k however: Even the increased funding covers only half of the state's four-year-olds, the expansion has faced a host of implementation challenges, and charter schools still aren't allowed to offer pre-k. The state also lags behind in linking pre-k with K-3 school reform efforts.

Do Spitzer's woes threaten New York's progress to date on early education, undermine his education reform agenda, or jeopardize future funding increases needed to make pre-k truly universal? Most likely not. The New York legislature, including powerful Assembly Chairman Sheldon Silver, has been a driving force in pushing greater pre-k funding even during the Pataki years. And New York also has a strong network of advocates supporting quality pre-k. The most serious potential consequence of the Spitzer scandal for education and children's issues is probably its impact on the composition of the New York State Senate. A special election last month put Democrats one seat away from taking control of the State Senate for the first time in more than 40 years. Spitzer's scandal could undermine Democratic efforts to gain a Senate majority, and if he resigns and is succeeded by Lt. Governor David Paterson, the Senate would also lose Paterson as a Democratic tie-breaking vote. This could affect education legislation. Paterson, who would be New York's first African American governor, is not particularly associated with early education, but does have a strong record of supporting education funding and reform.

Parents and teachers in New York are likely to face a lot of akward moments over the next few days as children start asking them why the governor is in so much trouble. We wish them luck. Fortunately, there are reasons to hope this won't have more serious consequences for New York State kids.

UPDATE: It looks like Spitzer is going to resign today.

Roundup: Week of February 4 - February 8

Ed Policy — Fri, 08 Feb 2008 00:00:00 -0500

House Approves Bill to Reauthorize Higher Education Act

[slideshow]In an overwhelming 354 to 58 vote, the House approved legislation on Thursday that would reauthorize the Higher Education Act for the next five years. The College Opportunity and Affordability Act (H.R. 4137) would impose new restrictions on the relationships between student loan providers and colleges, increase transparency in the private student loan market, simplify the process of applying for financial aid, keep textbook costs down, increase aid for veterans and military families, and tackle rising tuition costs. The legislation would also significantly weaken a provision in the law that protects students from unscrupulous for-profit trade schools.

More than two dozen amendments were included in the legislation, among them a requirement that colleges report how much of their endowment is spent on reducing tuition costs. The House also passed a measure, sponsored by Reps. Patrick Murphy (D-PA) and Sue Myrick (R-NC) that would require colleges to provide prospective students with an estimate of how much they will be expected to pay in tuition and fees before they earn their degrees. The chamber, however, rejected an amendment, favored by the New America Foundation, that would have made private student loans dischargeable in bankruptcy.

White House Voices Opposition to HEA

While the Higher Education Act moved a step closer to its first reauthorization in a decade, the Bush administration issued a statement of administration policy on Wednesday saying that the president "strongly opposes" the House version of the bill. The administration’s main complaint was that the legislation allows colleges to set their own standards of quality for accreditation purposes — significantly weakening the already minimal authority of regional accreditors. In addition, the administration complained about the inclusion of four dozen "costly" and "duplicative" programs, and of a provision that rewards colleges that hold down their prices with extra federal grant aid. Despite these complaints, however, the president did issue a veto threat against the bill.

Ed Dept. to Allow 7 Lenders to Keep Receiving 9.5% Loan Payments

A little over a year after it halted payments on 9.5 percent loans, the Department of Education announced this week that it will provide subsidy payments at that level to seven lenders. The lenders — which include nonprofit lenders from states such as Mississippi, Texas, Montana, and Vermont — were chosen from a group of 15 that had agreed to an audit to prove they legitimately qualified for payments that guarantee a 9.5 percent return on student loans. The need for this scrutiny arose last year after an Inspector General’s report revealed that both student loan provider Nelnet and the Pennsylvania Higher Education Assistance Agency (PHEAA) overcharged the department by millions of dollars. Secretary of Education Margaret Spellings decided not to collect any of the estimated $278 million in overpayments by Nelnet and will receive no more than $15 million of the estimated $34 million that the department's own Inspector General concluded that Pheaa had overcharged. One notable applicant who failed to pass the Department audit is the New Mexico Educational Assistance Foundation, which was the first entity to be exposed for overcharging on its 9.5 loans.

NCAA Settles Antitrust Lawsuit

Thousands of student athletes will now be able to receive additional funds to cover college expenses, following the settlement of a multi-million dollar antitrust lawsuit against the NCAA last week. This ends a nearly 2-year-old lawsuit, White v. National Collegiate Athletic Association, brought by several Division I football and basketball players who claimed that the NCAA’s restriction that scholarships could only go toward tuition, books, housing and meals meant that they could not basic expenses such as health care and travel. Under the settlement, the NCAA will provide $218 million over six years to cover these additional expenses, with much of the money going toward the cost of tutoring and facilities. The high figure, however, is misleading — according to Inside Higher Ed, the NCAA will only provide $20 million in new funds, with only half that amount going to compensate students. Eligible parties, which include Division I football and men’s basketball players from 2002 to 2007, will be able to receive $500 to cover "career development" expenses and up to $2,500 a year for three years to cover additional education expenses.

Roundup: Week of January 21 - January 25

Ed Policy — Fri, 25 Jan 2008 00:00:00 -0500

Economic Woes Hit Sallie Mae, Nelnet

Tightening credit markets and the slowing economy appear to be spreading into the student loan industry, as two major lenders announced recently that they will be cutting jobs and shying away from riskier loans. Last Friday, Virginia-based Sallie Mae said it would be trimming 350 jobs across the country, roughly 3 percent of its workforce. Nelnet, located in Nebraska, announced it would cut 300 jobs, about 10 percent of its workforce — its second round of major layoffs since September. Both companies also announced changes to the loan services they would be offering. Sallie Mae said it would be more selective about offering private loans to students with low credit scores and those enrolled at schools with low graduation rates. Nelnet, meanwhile, announced it would stop offering loan consolidation services and would be more selective with the loans it offered.

The job and loan cuts were among a slew of negative Sallie Mae stories this week. The loan provider also reported that increased borrowing costs and loan defaults caused the company to lose $1.6 billion in the fourth quarter of 2007. In addition, Sallie Mae revealed that the Securities and Exchange Commission has been asking questions about public disclosures by high-level executives around when they sold shares of Sallie Mae stock — a likely outgrowth of the probe into allegations of insider trading by current CEO Al Lord. Somewhere, former Sallie Mae CEO, Larry Hough, is smiling.

Cuomo Extends Study Abroad Probe with 15 Subpoenas

New York Attorney General Andrew Cuomo’s investigation of study abroad companies reappeared this week with the announcement that his office had sent subpoenas to 15 colleges and universities. The investigation originally began back in August as an outgrowth of Cuomo’s student loan investigation, which uncovered numerous improper dealings between colleges and student aid providers. Cuomo initially sent subpoenas in August and September to five study abroad providers, uncovering a series of deals in which the programs would pay colleges a portion of their fees in exchange for signing up students. Despite this, the investigation lay largely dormant until Cuomo reportedly sent subpoenas out to more than a dozen colleges this week, including prestigious institutions such as Harvard, Brown, and Columbia. According to the New York Times, these subpoenas ask colleges about their process for selecting approved study abroad programs and whether they have received any inducements to sponsor a specific program.

Three More Colleges Announce Aid Expansions

Dartmouth, Bowdoin, and Colby colleges all announced substantial changes to their financial aid packages this week, following the recent lead of Harvard and Yale. Dartmouth’s expansion is the most impressive of the three, eliminating tuition contributions for students from families making under $75,000 annually, replacing all loans with scholarships, and considering all international applications need-blind. Dartmouth’s announcement differs from plans recently unveiled by Harvard and Yale, which cut costs significantly for upper-income families but still kept some form of contribution for all families making more than $60,000 a year. Meanwhile, Colby and Bowdoin announced this week that they would eliminate all loans from current and future student aid packages and replace them with grants, an impressive move given that both have endowments well under $1 billion (subscription required).

Too Little, But Not Too Late

Ed Policy — Tue, 15 Jan 2008 00:00:00 -0500

In approximately three weeks, the U.S. House of Representatives is expected to take up legislation that would impose new restrictions on the relationships between colleges and student loan companies. While the effort is to be applauded, the legislation could go much further in eliminating the types of "pay for play" conflicts of interest…

Note: This post pre-dates Higher Ed Watch's shift to a new publishing system. For the complete original post, including any comments, please click here.

Who Will be Fired First: Al Lord or Isiah Thomas?

Ed Policy — Thu, 10 Jan 2008 00:00:00 -0500

They may share little more in common than the name Lord, but Isiah Lord Thomas (his given name), the much-maligned general manager and coach of the New York Knicks, and Al Lord, the oft-criticized Chief Executive Officer and former Chairman of Sallie Mae, are sitting on seats hot enough to…

Note: This post pre-dates Higher Ed Watch's shift to a new publishing system. For the complete original post, including any comments, please click here.

Naughty and Nice

Ed Policy — Thu, 20 Dec 2007 00:00:00 -0500

Santa has some tough decisions to make this Christmas. We've decided to help him out with our own list of who's been naughty and who's been nice this year in higher education.

Let us know who, if anyone, you think should be added to the list…

Note: This post pre-dates Higher Ed Watch's shift to a new publishing system. For the complete original post, including any comments, please click here.

Handcuffing States

Ed Policy — Wed, 12 Dec 2007 00:00:00 -0500

Yesterday, we wrote that officials in Iowa are investigating whether aggressive marketing practices by the largest student loan provider in the state, and the cozy relationships it has developed with area colleges, have pushed students to take on unnecessarily high levels of expensive private student-loan debt. Specifically, Iowa's…

Note: This post pre-dates Higher Ed Watch's shift to a new publishing system. For the complete original post, including any comments, please click here.

Mailbag: Loan to Learn

Ed Policy — Thu, 06 Dec 2007 00:00:00 -0500

From the start of Higher Ed Watch in September 2006, we have focused a healthy amount of attention on the non-profit company EduCap, which until recently marketed private student loans under the brand name Loan to Learn. The company, which is owned by the Washington, DC socialite Catherine B. Reynolds, shut down…

Note: This post pre-dates Higher Ed Watch's shift to a new publishing system. For the complete original post, including any comments, please click here.

Rewriting History at the Department of Education

Ed Policy — Wed, 05 Dec 2007 00:00:00 -0500

Top officials at the U.S. Department of Education continue to repeat the company line that they were ahead of the curve in coming to grips with and confronting the burgeoning "pay for play" student loan scandal -- despite all evidence to the contrary.

Note: This post pre-dates Higher Ed Watch's shift to a new publishing system. For the complete original post, including any comments, please click here.

PHEAA's Gobble, Gobble

Ed Policy — Tue, 20 Nov 2007 00:00:00 -0500

In honor of the conclusion of the harvest season-and in order to give ourselves plenty of time for turkey, mashed potatoes, and pumpkin pie-Higher Ed Watch is taking the week off to celebrate Thanksgiving. But we'd be remiss not to also note the Pennsylvania Higher Education Assistance Authority's (PHEAA) turkey surprise.

Note: This post pre-dates Higher Ed Watch's shift to a new publishing system. For the complete original post, including any comments, please click here.