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Beyond the News

Stories making headlines in higher education.

Oracle Buys PeopleSoft... Finally ; Foreign Students Decline ; Between the Lines ; Pell Grants Get Squeezed ; 'About Face' for Military Recruiters on Campus ; Blogging for Prospects ; Face-to-Face Admissions; More Student Song Swappers Sued ; Court Says It Won't Change Copyright Law ; A New Breed of Benefactor ; The First Feline Graduate ;
University Business, Jan 2005

The long-running battle over the future of PeopleSoft appears to finally be over.

After a very public, often rancorous 18-month struggle, which included the ouster of its one-time chief executive, PeopleSoft announced in mid-December that it had accepted Oracle's buyout offer. The transaction has been approved by the boards of directors of both companies and should be completed by early January, an Oracle spokesman said. PeopleSoft had resisted the buyout as it went about growing its own business, most notably with its acquisition of J.D. Edwards in 2003. Oracle will pay $10.3 billion for the company, making it the world's second largest enterprise applications developer, after SAP.

How will the buyout affect PeopleSoft's higher education customers? Spokesmen from neither company could provide specifics at press time, saying that many details remained unsettled. PeopleSoft has nearly 12,500 customers worldwide, with more than 730 in the higher education sector. Its campus enterprise solutions include human capital management, financial management and customer relations management products.

In the early stages of the buyout attempt, Oracle Co-President Charles Phillips said that if the deal were to take place, the company would not continue developing new versions of PeopleSoft applications or versions of existing applications for new markets. And, according to Wired news, Oracle at one point drew up plans to fire more than half of PeopleSoft's workers, but the company recently signaled the purge "might not be as dramatic as management originally envisioned."

But in a phone call to analysts, Oracle Chief Executive Larry Ellison said the merger will result in an "all new" PeopleSoft product, as well as a new J.D. Edwards enterprise application, as the first steps in developing a product that merges the three companies' applications. The new PeopleSoft 9--already in development at the time of the buyout--will run on Oracle's technology infrastructure to allow customers to benefit from a single underlying platform. Ellison said he expects the new product to be introduced within 18 to 24 months, but that PeopleSoft 9 would be the last PeopleSoft product brought to market. Oracle has pledged to support PeopleSoft products until 2013.

The number of international students enrolled in U.S. higher education institutions decreased by 2.4 percent overall in 2003-04 to a total of 572,509, according to "Open Doors 2004," the annual report on international academic mobility published by the Institute of International Education in November. Although graduate enrollment was up (2.5 percent), that increase was cancelled by a 5 percent decline in undergraduates, resulting in the first absolute decline in foreign enrollments since 1971-72.

Researchers offered a variety of reasons for the decline, including difficulties in obtaining student visas (especially in scientific and technical fields), rising tuition costs, stronger recruitment efforts by other English-speaking nations such as Australia, Canada, and Great Britain, and the perception that international students may no longer be welcome in the U.S.

While the overall decline may be seen as cause for concern--especially since foreign students bring an estimated $13 billion into the U.S. economy--some institutions actually saw an increase in foreign enrollments. The University of Southern California for example, recorded 6,647 international students in 2003-04, 6 percent more than the previous year. For the full report, visit

Edited by Edward P. St. John and Michael D. Parsons; The Johns Hopkins University Press, 2004; 263 pp.; $45.

In recent years, the broad political support for public financing of higher education has eroded, leaving a battleground laced with the minefields of desire to cut these large budgetary line items and mandate to do more with less. Exploring these issues is the mission of Public Funding of Higher Education. Filled with insightful examinations of federal funding, state funding, and lobbying, the volume is a rational voice sorting the conflicting demands on the college and university budgeting process. Send this book to members of your board--and, perhaps, to members of your state legislature come budget time.

Details about the Pell Grant are tucked into Congress' $388 billion omnibus spending bill for 2005, which was passed late last year. While the $4,095 maximum award remains the same for the third consecutive year, the total allocated to the Pell Grant program grew by only $359.2 million.

The increase will not nearly keep pace with the student demand, which has "skyrocketed" over the past three years, according to the American Council on Education. Recent demands have produced a $3.6 billion shortfall in the Pell program, and the president's 2005-2006 budget proposal did not include an increase. (The total of Pell Grant recipients has grown 37 percent in the last decade, according to reports.) The omnibus spending bill, which awaited President Bush's signature at press time, also allows states to update the income tax tables used to calculate Pell Grant eligibility and need for other federal student aid programs. The tables determine the expected family contribution (EFC), and a higher EFC means a lower aid award. But critics of the change argue that the recalculation uses tax figures from 2000 that reflect a more robust economy, not the current financial picture. The U.S. Department of Education had wanted to update those tables last year but some legislators, led by Sen. Jon Corzine (D-N.J.) were able to postpone the formula recalculations for one more year. Now many in the budget office say that without changes to Pell, the program would create $300 million more in red ink.

The bottom line is this: 84,000 fewer students will receive Pell Grants this year and 1.2 million others who receive them will be awarded several hundred dollars less than they have been granted in recent years, according to ACE. This, say observers, is the only way the government will be able to keep Pell spending in line.

In other budget moves, Congress eliminated additional contributions to the Perkins Loan Program, the $7.2 billion pool of money that colleges and universities use as a "revolving" loan fund to qualifying, lower-income students. In recent years, Congress has allocated $100 million in additional funding each year to help underwrite more loans.

It has been the rule for 10 years: colleges and universities had to allow military recruiters on campus or jeopardize their federal funding. But now the rule will change. Regarding a case heard in late November, the U.S. Court of Appeals for the Third Circuit voted 2-1 that the law--known as the Solomon Amendment--violated universities' right to free speech under the First Amendment. The suit was filed by a group of New Jersey professors and students.

Harvard Law School (Mass.), which had long barred recruiters on campus, but began allowing them on campus two years ago when the Pentagon cut funding, immediately said it would return to its prior policy. In the past, administrators at Harvard Law School barred military recruiters because it disagreed with the Pentagon's "don't ask, don't tell" policy regarding gay and lesbian recruits. Other schools, including Columbia University (N.Y.) and Boston University, reportedly were reviewing their policies.

The American Council on Education is urging IHEs to be cautious about their next steps. The government has not yet announced whether it will seek review of the ruling by the U.S. Supreme Court, or simply enforce the Solomon Amendment outside the Third Circuit, which includes Delaware, New Jersey, Pennsylvania, and the U.S. Virgin Islands, ACE policy observers note.

Call it the cutting edge of personal expression or the ultimate vanity press--blogging is now part of higher ed culture. Students have taken to blogging in the same way they have to personal websites, chat rooms, IM messaging, P2P downloads, and all other internet technologies that have gone before.

This year, administrators got in on the act. Not only have professors who use blogs for academic instruction started flooding the web with how-to advice on sites such as and the Educational Bloggers Network (, but also admissions officers are using blogs as an outreach tool.

This month Clarkson University (N.Y.) will be launching its student blog intended to appeal to potential students. Six students have volunteered to provide web journals that give a day-to-day account of their lives on campus, explains Michael Griffin, webmaster and director of news services. Their collective reflections will be linked to the university's homepage. All will be encouraged to take digital photos to run with their text online. Those who do not have cameras will be supplied low-cost models. The ultimate goal is to interest web-surfing seniors enough to get them to follow the personal stories and to inquire about the school.

Many schools, including St. Michael's College (Vt.), already have such blogs up and running. Here prospective students get an inside look at how freshman Jordan set up his dorm room, how he feels about the World Series (the headline "Go Sox" says it all) and his campus experiences.

While posting admissions decisions online has become the norm, a handful of schools are offering a more personal approach--they're relaying admissions decisions in person. Several high schools are inviting admissions reps to their campus for one-on-one consultations with prospective students whose applications they've already reviewed. "This is an excellent recruitment tool for us," says Lisa Pinamonti Kress, director of admissions and scholarships at University of Kansas, who was invited to meet with students from three high schools this year. "It's a great opportunity to sell our school to those who are accepted and to offer those who were not accepted an explanation." This can be especially beneficial for students who are not accepted because they can use this time to explain their deficiencies and lobby for themselves. In some cases, she says, enrollment statuses have been reconsidered. Other universities that partake in these on-site admissions fairs include University of Iowa, Miami of Ohio, and Michigan State University.

The Recording Industry Association of America filed lawsuits against 754 computer users last month in its continued attempt to stop unauthorized music swapping online. Twenty of the named defendants are college students who allegedly used their university networks to swap files at University of Pennsylvania, Columbia University (N.Y.), Old Dominion University and State University (both in Ga.).

Although the RIAA says it will continue to sue file-sharers and put IHEs on notice as potential defendants, many are beginning to wonder whether the industry group is more smoke than fire. In the year since it began its legal assault against file-sharers, the RIAA has yet to actually win a court case against any of the more than 7,700 individuals it has sued.

A number of the cases have been dismissed, while some have been settled out of court for an average of $3,000 each. Most other cases are pending.

In a ruling that could limit the ability of scholars to access artistic works, a federal judge in November dismissed a lawsuit seeking to stop expanding copyright protections.

The suit brought by internet archivist Brewster Kahle and others claimed that copyright laws were radically changed last year when Congress voted to lengthen copyright protection terms, even when the copyright holder didn't request it. An earlier challenge to the law was struck down when the Supreme Court ruled that Congress had the authority to make such laws.

Kahle said the ruling would be appealed, because the court did not address the suit's main argument seeking a revision in the law that now automatically renews copyrights, instead of requiring copyright holders to reregister. Archivists would like to see an "opt-in/opt-out" provision added. Changing the law could potentially open a vast amount of books, papers, films, and music created in the 60s and 70s to the public domain.

The internet archivists seek to distribute "orphan" works, or books and other works still under copyright but no longer in print or available to the public. Last year's Supreme Court ruling ended that practice, effectively limiting what could be put on the web.

At a time when colleges and universities rely on fundraising to make up for budget shortfalls, the donors who write those big checks are applying some added pressure. Paul Glenn, the donor who sued the University of Southern California for allegedly misusing his $1.6 billion gift for biological research (and who received a settlement earlier this year), is one of a new breed of donor. Glenn insists that his gifts are "contracts" with universities and other nonprofits. He and other wealthy benefactors now draw up literal agreements on how their money will be spent.

Some call these agreements "memoranda of understanding," says Ann Neal, president of the American Council of Trustees and Alumni. The council, formed in 1995 after Yale University (Conn.) returned a $20 million gift to donor Lee Bass, urges trustees, alumni and benefactors to monitor how their gifts are used. The council's book, The Intelligent Donor's Guide to College Giving, offers guidance on points to consider before a gift is given.

But IHEs are drawing up their own agreements. Duke University (N.C.), for example, made clear in its recent $2.6 billion fundraising campaign that generous donors would not be allowed a say-so in how the school is run. The rule is necessary in light of other high-profile cases, such as the ongoing battle between Princeton University (N.J.) and the children of benefactors Charles and Marie Robertson. Four decades ago the couple gave the Ivy League school $35 million to prepare graduate students for government work. The Robertson children contend that the money was not used as their parents intended. They claim they are entitled to a reimbursement from Princeton. But they don't just want $35 million. They are fighting for at least $600 million, which is the total value of the gift plus the income earned on the original sum.

Colby Nolan must be pretty smart. After all, he was recently awarded a $399 executive MBA degree from Trinity Southern University, an alleged online college. An official-looking diploma featuring signatures of the university's president and dean was also sent, along with a transcript that stated Colby had a 3.5 GPA. The transcript was an extra $99. Yes, Nolan was a decoy in an investigation conducted by Pennsylvania Attorney General Jerry Pappert designed to expose brothers Craig Barton Poe and Alton Scott Poe's scheme to promote and sell bogus online academic degrees. Investigators report that since last January, the defendants transmitted more than 18,000 illegal e-mail messages and allegedly stole IP addresses from more than 60 Pennsylvania businesses and state Senate to promote and sell online degrees. Pappert has filed a lawsuit against the defendants and has asked the court to force the defendants to forfeit their right to conduct business in Pennsylvania.