Office of Planning and Budgeting

55 Institutions Under Investigation for Possible Title IX Violations

Posted under Higher Ed News, Higher Ed Policy by Anja Speckhardt 

The U.S. Department of Education recently released a list of 55 colleges and universities that are being investigated for possible violations of Title IX, particularly in regards to their handling of sexual assault investigations. Title IX is a federal gender-equity law that applies to all institutions receiving federal funds. Recently, several universities have come under scrutiny for alleged mishandlings of sexual assault cases and investigations.

The list comes on the heels of the Obama administration’s recent unveiling of new, tougher guidelines for handling sexual assault on college campuses. The report encourages universities to:

  • create “climate surveys” designed to measure the prevalence of sexual assault on college campuses;
  • better train college officials in responding to survivors of sexual assault;
  • change certain confidentiality provisions in order to facilitate reporting; and
  • amend campus disciplinary policies to be closer aligned to those put out by the Department of Education.

The administration has also signaled that it will step up its enforcement of Title IX provisions. Student activists seemed encouraged by the news, those some claimed the administration did not go far enough to ensure that colleges are punished for Title IX violations.  

To see the list of institutions facing Title IX investigations, click here. To read more analysis about the inquiry, check out this article in the New York Times.

International Graduate Applications Increase, But Countries of Origin Shift

Posted under Higher Ed News, Higher Ed Research by Becka Johnson 

The Council of Graduate Schools (CGS) released its annual survey of international student applications on Thursday, which revealed that the number of international student applications to U.S. graduate schools increased by 7 percent in 2014 and, for the second year in a row, Chinese applications fell slightly, while those from students in India soared.

Chinese graduate applications (and enrollments) had steadily increased for the better part of a decade. But, in 2013, the number of graduate applications from China dropped by 3 percent and, this year, that number fell by another 1 percent. Meanwhile, Indian applications increased by 22 percent in 2013 and by an even more impressive 32 percent in 2014.

“The distribution of applications by country of origin… remains a concern,” the CGS report states, noting that Chinese applications trends have historically been more stable than Indian applications trends. Past fluctuations in Indian applications appear to have primarily resulted from changing economic circumstances and exchange rates; however CGS’s president, Debra W. Stewart, attributed the recent increase to tightening student-visa rules in the U.K.

The number of new Indian students at English universities dropped by half since 2010-11, which observers partially ascribe to the elimination of post-study work opportunities for international students and, as Inside Higher Ed notes, other U.K. immigration policy changes that have made the U.K. appear less welcoming of international students.

According to an article by The Chronicle, “Stewart said she worries that unless American lawmakers reform the visa system to make it easier for international students to stay and work after graduation, the United States could lose whatever edge it may have.”

The Chinese slowdown is likely a more permanent change resulting (at least partially) from China’s push to improve its own research universities. The report’s other noteworthy findings include that Brazilian graduate applications increased by 33 percent—which could be due in part to the Brazilian government’s massive scholarship program—and that graduate applications from Africa, Europe and the Middle East (the three world regions reported on) all showed increases as well.

Figures for 2014 are preliminary and subject to revision in a CGS report planned for August.

Income-Driven Repayment Options in the US

Posted under Higher Ed Policy, Higher Ed Research by Anja Speckhardt 

TICAS recently published a white paper entitled “Should All Student Loan Payments Be Income-Driven? Trade-Offs and Challenges.” The white paper does a great job of summarizing existing income-driven repayment (IDR) plans that are available to students in the US (see the table below, which was drawn from page 4 of the report). TICAS highlights the complicated nature of many of the IDR options, and questions whether the US should automatically enroll students in IDR, as is the case in the UK and Australia. While automatically enrolling borrowers in IDR may help reduce default rates and lessen the burden of student loans, it may also increase the time horizon for paying off loans, thereby increasing the amount that borrowers ultimately pay over the lifetime of the loan.

Summary of Existing Income-Driven Repayment Plans in the US

 

Available

Eligibility

Monthly Payment Cap

Discharge After

Income-Based Repayment (Classic IBR)

Since 2009

All borrowers with federal student loans (Direct or FFEL), new or old, with a partial financial hardship (PFH).

15% of discretionary

income

25 years

Income-Based

Repayment

(2014 IBR)

Starting July

2014

Borrowers who take out their first loan on or after July 1, 2014, and have a PFH.

10% of discretionary

income

20 years

Pay As You Earn

(PAYE)

Since late 2012

Direct Loan borrowers who took out their first loan after Sept. 30, 2007 and at least one after Sept. 30, 2011, and have a PFH.

10% of discretionary

income

20 years

Income-Contingent

Repayment (ICR)

Since 1994

Borrowers with Direct Loans, new or old; no PFH requirement.

The lesser of: 20% of

discretionary income and

12-yr repayment amount x

income percentage factor

25 years

For more information on the details of IDR and the benefits and challenges of the system, please check out the TICAS report.

Ryan Budget Would Hurt Pell Grants and Student Loans

Posted under Higher Ed Policy by Becka Johnson 

Representative Paul Ryan, the House Budget Chairman, released his FY15 budget proposal on Tuesday. The proposal would remove the in-school interest subsidy for all subsidized undergraduate student loans, eliminate mandatory funding for Pell Grants, and freeze the maximum Pell Grant award at $5,730 for the next 10 years.

As Office of Federal Relations put it in their blog post, “That essentially means that $870 in the maximum grant would have to be funded by increased discretionary funds or the maximum be cut from $5,730 to $4,860.”

Please see the Federal Relations website for more information, and check out articles by Equity Line, Inside Higher Ed, and The Chronicle.

New Report Suggests Graduate Student Debt Deserves Legislative Attention

Posted under Higher Ed Policy, Higher Ed Research by Becka Johnson 

A recent report by New America, titled The Graduate Student Debt Review, reveals that much of the nation’s “$1 trillion in outstanding federal student debt” is the result of expensive graduate and professional degrees, rather than unaffordable undergraduate educations.

The report, which analyses recently publicized data from the Department of Education, shows that around 40 percent of recent federal loan disbursements are for graduate student debt. Moreover, the paper shows that graduate student debt across a variety of fields—not just business school and medical school—comprises some of the largest increases in student borrowing between 2004 and 2012. Thus, the authors recommend that legislators, journalists, and the public at large adjust their understanding of student debt to recognize that it’s not just undergraduate problem.

Most news stories highlight the debt of graduate students—which tend to have much larger loan balances—yet journalists typically don’t differentiate graduate debt from undergraduate debt. EdCentral makes a compelling argument for why this lack of differentiation is a problem and why it deserves legislative attention:

“The failure to distinguish between undergraduate and graduate debt in discussions of college costs is a serious flaw in how we think about student debt. Students, families, and taxpayers invest significant resources in financing “college,” largely because a bachelor’s or associate degree is a must for anyone who wants to secure a middle-class income… But arguments for high levels of subsidy for students who attend graduate and professional school are on shakier ground. While a graduate or professional degree boosts a student’s earnings prospects and the economy at large, it is not the foundation for economic opportunity and middle-class earnings that a two- or four-year degree now provides. Students pursuing graduate degrees should be far more informed consumers. Therefore, they shouldn’t need a lot of public support to finance their next credential, which is why there are no Pell Grants for master’s degrees. That spike in debt for graduate degrees should also focus policymakers’ attention on an impending tidal wave of loan forgiveness for graduate students and the lack of loan limits for students pursuing graduate degrees.”

You can read more about New America’s report at The Chronicle and Inside Higher Ed.

Small Changes Made to Draft Gainful Employment Rules

Posted under Higher Ed News, Higher Ed Policy by Anja Speckhardt 

Over the past few months, we have been following the Department of Education’s attempts to overhaul the controversial gainful employment rule legislation on this blog. This week, the Department moved closer to releasing a final version of the law. Its new set of draft rules is very similar to that released in December, in that individual programs would be judged on a set of debt-to-earnings ratios and a program cohort default rate (CDR).  Specifically:

  • For debt-to-earnings ratios, a program would fail if its graduates’ loan payments equal more than 12 percent of their incomes or more than 30 percent of their discretionary incomes.  If a program failed both the annual and the discretionary standards twice in three years, it would lose eligibility for federal financial aid.
  • For the program CDR, a program would lose federal aid eligibility if 30 percent or more of its graduates who entered repayment defaulted on their loans within three years.

As with the previous draft, these two tests would operate independently from one another, meaning a program that passes one would not be safeguarded if it failed the other.

Although this is all consistent with the previous draft, there were a few noteworthy changes, including:

  • In order for a program to be held annually accountable to the debt-to-earnings measures, it must have at least 30 graduates—rather than 10, which was in the previous draft. Smaller programs will still have data aggregated over four years, thus accountability isn’t removed for them, just delayed.
  • Instead of assuming a 10 year repayment period for borrowers across the board, the new proposal extends it to 15 years for bachelor’s and master’s programs, and to 20 years for doctoral programs.

As a result of these two changes, the new proposal is very similar to the 2011 law; however, the inclusion of the cohort default rate remains an important difference. The 2011 law was struck down by a judge because the default calculation used in the original rules was deemed “arbitrary and capricious.” The Department believes the new policy will be more resilient to legal challenges because it holds programs to the same CDR standards to which institutions are held by the Higher Education Act.

Ed Central provides a very thorough analysis of some of the more subtle changes, and is an excellent resource for additional information.

Secretary of Education Arne Duncan estimates that under these rules, roughly 20 percent of current vocational programs at for-profits and community colleges would fail and 10 percent would be in “the zone”—meaning a program would have to warn its students that it could become ineligible for federal aid.

As can be expected, the for-profit sector was strongly opposed to the new rules, claiming they would limit access and opportunity for the neediest students. Community colleges, however, were happy to see the proposal would allow “in the zone” programs to appeal if less than half of its graduates take on debt.

Now that the rules have been released, there will be a 60 day public comment period on the draft legislation. The Department hopes to release its final proposal in a few months.

House and Senate Reach Agreement on Supplemental Operating Budget

Posted under Higher Ed News, Higher Ed Policy by Becka Johnson 

2014 Sup Budget Comparison v2

*Although the conference budget cuts state funding by $7.3 million, it also reduces the amount employers can spend on benefits per employee per month to $622, which essentially offsets the cut.

† The $1,200,000 figure is an estimate until OFM sends additional instructions.

Special Report on State Disinvestment in Public Higher Education

Posted under Higher Ed Policy, Higher Ed Research by Anja Speckhardt 

The Chronicle of Higher Education recently published a special report on public colleges, detailing how state funding declines and rising tuition have put increasing pressure on largely need blind public colleges and the students they enroll. The first section of the report, “An Era of Neglect,” shows the decline in state funding for higher education through the eyes of six interested parties—a lobbyist, an anti-tax activist, a state Senate member, a Governor, a higher education advocate, and a university president. The second essay, “The Tipping Point,” cautions that state disinvestment in higher education has shifted the cost burden such that students and their families pay for more than half of their education in many states. The third piece, “Equalizers No More,” warns that public higher education no longer serves as a ladder for upward mobility, since college costs are often too much for low-income students to bear and financial aid has not kept up with rising tuition. The fourth and fifth sections, “Explore State Support by College” and “Who Foots the Bill?” contain info-graphics that show the decline in state support for public colleges between 1987 and 2012, as well as detail the cost sharing breakdown between students and the state.

The Office of Planning & Budgeting has done similar analyses in the past few years. The graph below shows the trajectories of state funding and tuition over the period from 1999-2015. Despite the fall in state support, the UW has remained committed to providing generous need-based financial aid. As a result, the net price of attending the UW is $9,395. Check out OPB’s analysis of net price at the UW and our peer institutions here.

funding per fte

To read the full special report, check out the Chronicle’s website.

President Obama Releases His FY2015 Budget

Posted under Higher Ed News, Higher Ed Policy by Becka Johnson 

Yesterday, March 4th, President Obama submitted his fiscal year 2015 budget request to Congress. The Institute for College Access & Success (TICAS) has published their analysis of the budget as has the Education Policy Program at New America.

TICAS states that the President’s proposal “takes important steps towards making college affordable for Americans by reducing the need to borrow and making federal student loan payments more manageable.” Specifically, his budget:

  • Invests in Pell Grants and prevents them from being taxed.  The budget provides funds to cover the scheduled $100 increase in the maximum Pell award, raising it from $5,730 in 2014-15 to $5,830 in 2015-16. TICAS notes that although this increase will help nearly 9 million students, “the maximum Pell Grant is expected to cover the smallest share of the cost of attending a four-year public college since the program started in the 1970s.”
  • Makes the American Opportunity Tax Credit (AOTC) permanent.  TICAS supports making the AOTC permanent as they note research suggests the AOTC is the most likely of the current tax benefits to increase college access and success.  New America, however, recommends the administration convert the tax credit to a grant program as they state researchers have found grants to be a more effective way to deliver aid to low-income families.
  • Improves and streamlines income-based repayment (IBR) programs. Under the President’s budget, more borrowers would be eligible to cap their monthly payments at 10 percent of their discretionary income and have their remaining debt forgiven without taxation after 20 years. The budget also adjusts the IBR programs to prevent debts forgiveness for high-income borrowers who can afford to pay their loans.
  • Requests funding for the College Opportunity and Graduation Bonuses.  The budget proposes establishing College Opportunity and Graduation Bonuses, which would reward schools that enroll and graduate low-income students on time. Both TICAS and New America note that, unless this proposal is thoughtfully designed, it could incentivize schools to lower their academic standards in order to make it easier for Pell students to graduate. Further, as this proposal is one of several different efforts to reward colleges that provide affordable, quality educations, it is unclear how its goals and formulas would interact with those of initiatives like the Postsecondary Education Ratings System.

The UW’s Federal Relations blog notes that the budget also proposes $56 billion for an “Opportunity, Growth and Security Initiative,” which “aims to effectively replace the remaining FY2015 sequestration cuts for nondefense discretionary programs – the programs we care about the most.” Please stay tuned to their blog for more information and updates.

Updated House and Senate Supplemental Budget Brief

Posted under Capital, Higher Ed News, UW Budget by Becka Johnson 

We have updated the OPB brief we posted on February 27th, to reflect additional information regarding the employee health insurance related agency reductions. Both the House and Senate budget would decrease agency contributions for employee health benefits. The House budget cuts state funding by $7.6 million and the Senate budget cuts state funding by $4.4 million. However, both of these reductions are offset by lower per employee spending “limits” on benefits. The House budget would reduce monthly employer funding to $658 per eligible employee. The Senate budget would reduce monthly employer funding to $703 per eligible employee.

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