Behind the News
STUDENT LOANS ARE NECESSARY to make college a reality for many families. Now lawmakers and financial aid experts are pushing for safeguards to ensure that the federal student loan process won't be shaken by the nation's credit crunch.
This worry has been magnified by significant changes in the relationships between higher ed institutions, lenders, and the Federal Family Education Loan Program (FFELP). Currently, more than 45 lenders have exited FFELP in all or part, including companies such as Washington Mutual, Sovereign Bancorp, College Loan Corp., and NorthStar Education Finance. Lenders that have chosen to remain in the student loan business are imposing stricter credit requirements or co-signing for private student loans. For federal loans, some lenders have stopped lending to or marketing to students at schools with cohort default rates above 10 percent.
A survey of National Association of Independent Colleges and Universities members about the credit crunch's impact on student loans (www.naicu.edu/studentloansurvey), conducted in March, cites a significant number of private IHEs reporting reductions in student loan availability and borrower benefits. Among 211 member institutions who received information from "preferred" lenders on making loans through FFELP for the 2008-2009 academic year, 68 percent said that one or more of their lenders are cutting borrower benefits on FFELP loans; 57 percent said they are no longer providing these loans.
As of mid-April, about 60 IHEs had switched from FFELP to direct lending, allowing students to borrow from the federal government through their colleges, eliminating involvement from private lenders. These range from private liberal arts-based schools such as Augustana College (Ill.), to private, research-centered institutions such as Northeastern University (Mass.), to large state institutions such as The Pennsylvania State University.
Philip Day, president and CEO of the National Association of Financial Aid Administrators, says it appears the reason institutions are going in this direction is that "they want to take measures into their own hands. They don't like the unsettled nature of the private sector marketplace."
Mark Kantrowitz, publisher of FinAid (www.finaid.org), a student financial aid website, agrees. "It certainly shows that some schools are worried about the stability of FFELP."
Calls for a response from the federal government have been loud and quick. In April, the House Education and Labor Committee approved the Ensuring Continued Access to Student Loans Act of 2008, which offers new protections to prevent uninterrupted access to federal college loans. It would give the U.S. Secretary of Education the authority to advance federal funds to guaranty agencies operating as lenders of last resort if they do not have sufficient capital to originate new loans, and the temporary authority to purchase loans from lenders in the federal guaranteed loan program. -Michele Herrmann
TO SAY THE UNIVERSITY OF VICTORIA (British Columbia) has something of a rabbit problem is an understatement. The rabbits are everywhere. They've been there since the 1980s-domestic pets abandoned by their owners, according to some-and they've done what comes naturally: multiply. Females can deliver litters of up to seven offspring at a time, and they can do it four or five times a year. Their offspring can begin reproducing within four months.
The rabbit has even become an unofficial school mascot. Some people think the animals are cute and adorable, but to many in the UVic administration, they are pests.
Their population is growing too fast for the 346-acre campus, wreaking havoc in campus gardens and damaging athletic fields. Maintenance workers routinely remove dozens of deceased rabbits a month.
No one wants to kill the bunnies-that would be a public relations nightmare. So administrators are playing it by ear, hoping someone can come up with a humane way to reduce the rabbit population.
A rabbit roundup, after which the males and females would be segregated to separate pens to live peacefully without mating, is one idea. But this hare-splitting scheme involves capturing what may be thousands of the rascally rabbits. "I'm not sure how realistic that is," notes Director of Campus Planning and Sustainability Neil Connelly. Another thought is to introduce a form of bunny birth control into the rabbits' food so that the population naturally culls itself.
Until someone comes up with a way to make the hare line recede, UVic students and administrators will just have to hope for a hoppy ending. -Tim Goral
ANTIOCH COLLEGE (OHIO) MAY get a second chance at a new life. Enrollment declines threatened its survival and caused the board of trustees for Antioch University, the college's parent holder, to announce last June that it would suspend operations as of July 1, 2008. Now the board has passed a resolution to reopen negotiations involving the transfer of assets after previous talks with Antioch College Continuation Corporation reached an impasse. WYSO-FM, Antioch University's NPR-affiliated radio station, will not be for sale.
The board rejected a $12.2 million offer from ACCC that proposed giving $6 million at closing and a pledge to pay the remaining $6.2 million in installments over five years. ACCC's offer was to ensure that the college had enough funding for when it reopened, explains co-chairman Eric Bates. ACCC consists largely of alumni who want to make the college independent; it has been working with the trustees' negotiators since December 2007. The college will be closed for the 2008-2009 academic year, but it may reopen at a later date.
Antioch spokesperson Lynda Sirk explains that the board of trustees is in talks with ACCC and the college's alumni board, in order "to find something reasonable for both the university and the college, so that both can move forward and thrive."
Bates argues that the ACCC can help to attract "the kind of presidential leadership" the college needs and increase alumni giving. "We think we would be able to open up those checkbooks," he says.
In February, ACCC presented a plan for contributing $10 million directly to the university in exchange for 10 seats on its board, says Bates, but it has not yet been discussed by the board. -M.H.
Minority-serving institutions (MSIs) might face some unique challenges, but the goals of student engagement and retention are universal. Lessons learned in the microcosm of an MSI may benefit other higher ed institutions. The Building Engagement and Attainment for Minority Students (BEAMS) initiative was created in 2003 to help minority-serving institutions become more data driven. Funded by the Lumina Foundation and managed by the Institute for Higher Education Policy, BEAMS helped participating IHEs use the National Survey of Student Engagement (NSSE) to measure what they didn't know about students and determine what they could fix and enhance, explains Melissa Del Rios, IHEP program manager.
"Overall it gave the university an opportunity to reassess our focus on retention and specifically how we utilized university resources toward achievement and engagement," says John Melendez, vice president for student affairs at New Jersey City University, where the student body is about one-third Latino, one-quarter Anglo, and one-fifth African-American. Propelled by the initiative, administrators implemented a virtual student center to better serve a population that is 95 percent commuter students. They also created a "freshman express" summer program because research by the Department of Education shows individuals who complete college credits during the summer are more likely to graduate than those who don't, Melendez explains. Students who tested as needing developmental English classes received a sliding scale discount for the summer classes based on the number of credits they took. "It was a business idea of discounting at the front end to help them persist," he explains. The program brought more than a quarter of the incoming freshman class to campus. "We had a 90 percent pass rate for the skills-deficient students," Melendez adds.
Del Rios says financial support for BEAMS is ending in June, but she expresses hope that administrators continue the work. "We feel the best practices can help any institution," she says. "IHEP did a road show when initial findings were released in April. For those who missed it, the reports are available at http://ihep.org (click on Publications). -Ann McClure
IT WAS THE CINDERELLA STORY of this year's NCAA basketball tournament: 10th seed Davidson College (N.C.) upsetting second seed Georgetown in the second round to advance to the "Sweet 16." By week's end, the 1,700-student liberal arts college released a celebratory fact sheet with stats on everything from the last time Davidson made it that far (1969) to the number of new Facebook "friend" requests received by one basketball team member (1,800). Officials also reported a 1,200 percent increase in transfer inquiries and 10 new admissions office inquiries about the application deadline (already passed).
Based on anecdotal evidence and some studies, administrators expect to score application wins following major sports victories. New research quantifies the average effects of basketball and football success across all NCAA Division I schools. Jaren Pope, assistant professor of agricultural and applied economics at Virginia Tech, conducted the study with his brother Devin Pope, an assistant professor at the Wharton School of the University of Pennsylvania. They examined data from 1983 to 2002 on application numbers and applicant SAT scores at the 330 schools.
One finding that Davidson officials will surely want to know: Making the Sweet 16 may boost applicant numbers by as much as 3 percent the next year. And the March Madness winner (The University of Kansas this year) may see a 7 to 8 percent jump in applications. Private schools tended to get the biggest boost, notes Jaren Pope. The applications spike associated with both basketball and football success continues for several years. In addition, the extra applications include students with both low and high SAT scores. "Schools can exploit these extra applications by selecting high-quality students to improve the quality of their freshman class," he says.
Pope knows the study will interest administrators, but he cautions that these temporary application bumps "do not address whether putting more money into sports programs is the best use of resources." He's left with a big question that may spur further study: Just why is it that sports success influences where students apply? -M.E.
IN SUMMER 2009, AS RESIDENTS MOVE into the University of Houston's Calhoun Lofts, they'll be getting more than just brand new one- and two-bedroom apartments. With the $108 million residence hall project breaking ground as the nation's first planned deployment of AT&T's U-verse services into student housing on a college campus, robust voice, data, and video services will come with the package.
Students accustomed to the U-verse television service from home are no doubt aware of the more niche and high-definition programming choices it provides. Unlike with traditional cable TV or a satellite network, IP-based U-verse uses switched video delivery so that content choice isn't limited by the size of the "pipe" flowing into the home. "We wanted to make this cutting edge and enhance the services from what we have now," says Vice President for Student Affairs Elwyn Lee. For instance, students on campus can't currently get caller ID, voicemail, or pay-per-view.
Each resident of the 700-apartment building will likely have a basic service of high-speed internet, a voice-activated phone, and video capability included in their rent, Lee notes, adding that students will have the freedom to individually upgrade services.
As for the university upgrading to this type of service, Lee estimates that start-up costs are comparable to traditional services, yet with greater capacity, flexibility, and support built in. Over time he expects that choosing U-verse will be a moneysaver, as all of its services will be purchased through a single provider. "We hope this will be a model for other colleges and universities," he says, adding that U-verse would be particularly attractive to institutions with large residence hall projects, since certain economies of scale can help with pricing. -Melissa Ezarik
MARK G. YUDOF WILL HAVE HIS hands full when he becomes president of the University of California this summer, with the 10-campus system facing a fiscal crunch due to California's financial constraints and having dealt with a recent compensation pay scandal. Current President Robert C. Dynes retires this June.
UC's Board of Regents is confident in Yudof's leadership, particularly from his work as head of The University of Texas System. In a statement, Chairman Richard C. Blum says Yudof "brings a strong commitment to academic values" and "a strong record of performance as a manager."
Chancellor of the UT system since 2002, Yudof has been credited with raising its national standing, increasing revenues for all 15 campuses (nine are academic and six are health institutions), and pushing for greater academic accountability. The system has 194,000 students and an annual operating budget of $10.7 billion.
An expert on constitutional law, freedom of expression, and educational law, Yudof was a faculty member and administrator at The University of Texas at Austin for 26 years. He was dean of the School of Law from 1984 to 1994 and executive vice president and provost from 1994 to 1997. His began his career at UT Austin in 1971 as an assistant professor of law. He returned to Texas in 2002 after serving as president of the University of Minnesota since 1997.
Along with the UC presidency, Yudof will hold a faculty appointment in UC Berkeley's School of Law. Is the move to California a gold rush? Yudof will receive a compensation package of $828,000 for the 2008-2009 year, which in part consists of an annual base salary of $591,084. That's a $38,000 increase over his estimated current pay at UT. -M.H.
IN DEVELOPING A CONFLICT OF interest policy, it's important to ask the right questions and consider the right topics. With that in mind, the American Council on Education formed a working group this past fall to help guide college and university presidents, trustees, administrators, and faculty in strengthening policies and practices related to conflicts of interest.
"Many campuses already had policies, but given the current climate it was an opportune time for campuses to review them and possibly update them," says Ada Meloy, general counsel at ACE and chair of the working group. "There's a renewed interest in making sure that ethical practices permeate the institution, down to every level."
That renewed interest is, of course, at least in part a reactive one. The media has made the public well aware of issues uncovered in the nationwide investigation of financial aid lenders.
The working group, which included both higher education association and campus leaders, collaborated to publish a working document online. It proposes basic principles and identifies questions and criteria to guide review of policies and situations that may raise ethical concerns.
"The most complex and difficult area is the area of institutional conflicts of interest," says Meloy. While medical schools and hospitals have traditionally looked at these issues with relation to their research activities, individual conflicts of interest tended to be the focus. Now there's a better understanding of the need to pay attention to conflicts of interest in all areas and at all levels on the organizational chart, she explains.
To view the working paper, visit www.acenet.edu and click on the Papers & Proposals section of Government Relations & Public Policy. -M.E.
MORE THAN 1,000 STUDENTS HAD THEIR HOPES DASHED IN MARCH when Harvard administrators announced that no transfer students will be accepted for two years, to give the institution a chance to get an undergraduate housing crunch under control. According to a letter posted on the university's website, transfer students are not allowed to live off campus because residential life is such an integral and important part of the experience. Spokesman Robert Mitchell says that although the housing committee was formed a year ago, their report was only recently received.
Students aren't the only ones to lose out because of this decision. As Josh Wyner, executive vice president of the Jack Kent Cooke Foundation, which provides scholarships to transfer students and other support for transfer initiatives, points out, "Students at the top of their classes at community colleges can excel at Harvard, or any selective institution, and bring a new perspective to a campus." Research by the foundation has shown that less than one out of 1,000 students at the most selective private colleges started at community colleges. Any college that makes this decision will close down an opportunity that is already limited, Wyner asserts, as well as limit diversity on campus. But at the same time, Wyner could see the other side of the coin and respect the decision. "They are saying they won't let students in the door who they can't serve well. They are trying to figure out how to serve them well in the future." -A.M.
How the University Works: Higher Education and the Low-Wage Nation
By Marc Bousquet, New York University Press, 2008; 281 pp.; $22.00
WITH TUITION INCREASES OUTSTRIPPING inflation, the public is taking a closer look at the salaries and pay packages of college coaches and presidents. But such concern isn't usually expressed about faculty pay. In How the University Works, Marc Bousquet points out that this is because many faculty are working for "fast-food wages." He argues that the administrative side of higher ed has been bloated at the expense of tenure-track positions. A reduction in these positions often results in a "disposable" workforce of graduate students-resulting in students teaching students. The book also examines a study on faculty prospects by former Princeton President William Bowen and then-student Julie Ann Sosa and the idea of a "job market" in academic labor.
Bousquet discusses a partnership between some Kentucky IHEs and a major shipping company that is supposed to provide onsite education benefits to students- minimum wage, part-time employees on the night shift who have a 40 percent dropout rate. The school accepts the situation in part because of tuition revenue.
In pointing out disparities in academic salaries and benefits, often based on age and gender, the book provides food for thought on a possibly uncomfortable topic. -A.M.