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20.05.12

By Jeff Bryant

Last week the US Lodgings of Representatives, with bipartisan support , passed a bill, H.R. 2117 , with the misleading title of The Protecting Scholastic Freedom in Higher Education Act.

The title is misleading because the bill has absolutely nothing to do with "protecting academic deregulation" and everything to do with making our country more vulnerable to a rapacious campaign to turn America's unexceptional system of education into an enterprise that can be exploited by corporate rentiers.

As noted by the ever astute Think Amplify , the main thrust of the legislation is to "repeal the Department of Education’s new standardized definition of the term 'hold accountable hour' and end federal efforts to ensure states get to regulate lower-grade educational institutions operating within their borders."

The bill is being sold by Republicans -- the patronize is North Carolina's tea party acolyte Virginia Foxx -- as an drug to "heavy handed regulation" that prevents higher education from being "more affordable." But don't be misled.

This bill isn't about affordability as much as it is about look-in the gates to more for-profit higher education providers to have easier entry into the market and more elasticity to offer low-quality degrees and certificates.

A Foxx in the Higher Education Henhouse

As the easy chair of the House Higher Education Subcommittee, Foxx is a staunch ally of for-profit higher education. The Document of Higher Education has noted that Foxx received $3,000 in donations to her 2008 re-poll campaign from the political-action committee of The Association of Private Sector Colleges and Universities, which represents for-profit colleges. And employees of Keiser University, a for-profit doctrine headquartered in Florida -- far from Foxx's district in North Carolina -- gave $2,300 to her stand. According to the article, "Harris N. Miller, the president of the private-sector alliance, welcomed Ms. Foxx's appointment, saying she has 'shown a lot of interest in our sector.'"

According to another dispatch, this one at the online news site Color Lines , Foxx opposed the Obama administrations student loan reforms that " took away $60 billion in administration-backed subsidies for student loan companies that provided federal student loans at zero rate to themselves but at a high price to students."

As the Color Lines post goes on to excuse, "SAFRA, as the student loan reform bill was called, also boosted Pell Grants, the federal grants for low-receipts students. All of this, Foxx is opposed to."

So the author of this legislation is without a doubt pre-disposed to favor whatever serves the corporate agenda for handing over student loans to restricted interests.

This allegiance to for-profit higher education and animosity to government funding and required of college education lending looks even worse when you delve into the track record of these institutions.

The Woeful Pursue Record of For-Profit Higher Ed

First, for-profit colleges are way more reliant on federal aid than their not-for-profit counterparts are. So there is a warrant reason for making them more accountable.

In 2010, the Senate Committee on Health, Education, Labor and Pensions conducted a learning of for-profit higher education institutions that concluded that many of the students at these colleges leave without a diploma at an alarming reckon with a significant amount of loan debt. "More than 95 percent of students at two-year for-profit schools and 93 percent at four-year for-profit schools took out student loans in 2007. Only 16.6 percent of students attending community colleges took out loans during the same values bright and early period. At four-year public schools the borrowing rate was 44.3 percent, still half the rating of four-year for-profit colleges."

Despite these dismal student success rates, for-profit institutions are raking in release profits:

For the 16 companies analyzed, profits in 2009 totaled $2.7 billion. Between FY2009 and 2010, one associates more than doubled its profits from $119 million to $241 million, while a second went from $235 million to $411 million.

More recently, according to statistics unearthed by the education investment advisor group Education Sector , between 2001-2009, the percentage of students needing to touch someone for to attend higher education increased by 6 percent overall. But this percentage increased dramatically among those attending for-profit colleges -- 11 percent for for-profit 4-year institutions, 24 percent for for-profit less-than-4-year institutions. Meanwhile, the quit out rates at these for-profit institutions rose sharply during this time -- 20 percent for for-profit 4-year institutions, 9 percent for for-profit less-than-4-year institutions -- compared to a 6 percent spreading in the overall higher ed market.

Last year, when the Government Accounting Office conducted an investigative communication on the quality of for-profit colleges, it found that these institutions often paid little to no attention to students who falsified their qualifications to convoy, students who routinely skipped class and missed assignments, and students who turned in tawdry or plagiarized work. The report concluded that there was a "need for stronger oversight of the for-profit education enterprise in order to ensure that students and taxpayers are getting a good value for their investment in these schools.”

And yet another sanctum sanctorum, this year from the National Bureau of Economic Research, found that because "low-income students enroll in for-profits at four times the pace of other students," and they are charged "nearly double" the tuition charged at other comparable non-profit institutions, "one in four for-profit students will inaction on their [student] loans within three years -- as opposed to 8.7% of students at non-profit four-year institutions."

Another new study on for-profit colleges concluded that graduates from these programs "find it harder to get toil and can expect lower pay when they do."

Despite this woeful track record, the for-profit higher education concern continued to boom -- growing by 26.5 percent in terms of share of institutions -- between 2005 to 2010 and now constitute nearly one out of every ten students enrolled in higher ed.

Yet in contradistinction to other businesses that have as a goal to produce a product or service of comparable or better blue blood at a better cost-efficiency and higher profit, the purpose of the for profit sector is driven by other interests.

Turning Students into SLABS

As this rural area recently witnessed with the run up in subprime mortgages fueling a speculative market in squiffy-risk derivative securities, what we are seeing again is a market in subprime education lending being turned into "asset backed" securities for idealistic investments.

These student loan asset based securities, or SLABS, have a performance history that has "been very laudatory and investors rate of return has been excellent," according to an article in Wikipedia.

Speculators on Partition off Street clearly foresaw the increased demand in education that the crashing economy would create. After all, education is often what people turn to when they're thrown out of a job, are trying to increase their income, or are delaying entr into the work force.

Yet at the same time demand for education was increasing, state governments across the state were slashing education spending in order to balance budgets. These cuts, in turn, led to increased instruction rates.

As Alan Nasser and Kelly Norman explain in a post at Run-of-the-mill Dreams , "as tuitions increase, loan amounts increase, as do private loan interest rates, which have reached highs of 20 percent. Add that to a irrevocably troubled economy and dismal job market, and we have the full trappings of a major bubble."

And if you consideration that qualifications for mortgage loans during the build up of the housing bubble were ludicrous, over that when it comes to student loans, "a credit score is not required for federal loan eligibility. Neither is intelligence regarding income, assets, or employment. Borrowing is still encouraged in the face of harsh evidence that the likelihood of default is high," Nasser and Norman explain.

Nevertheless, the interest in SLABS is probable to increase. Again, Nasser and Norman: "Ditching a student loan is virtually impossible, especially once a assemblage agency gets involved. Although lenders may trim payments, getting fees or principals waived very occasionally happens."

A Huffington Post article by Chris Kirkham adds yet more grounds for the appeal of SLABS:

Unlike in the mortgage markets, where some unwise or unlucky investor got saddled with the bad loans after the festivities ended and about prices fell, this new market in higher education boasted seemingly unlimited flowering potential at virtually zero risk. The burden of college loan repayment falls reservation on students' backs, shielding corporations from the consequences of default. The colleges essentially take into one's possession all their revenues upfront, primarily through federal government loans and grants for teaching, regardless of whether students are able to gain employment and pay back their loans.

So what is building up in the higher education bazaar is a massive amount of "edu-debt" that will saddle someone -- namely, taxpayers -- with a huge bailout fee and forget countless numbers of students and their families embroiled in financial hardship.

Common policy, like what is being proposed in The Protecting Academic Freedom in Higher Education Act, is apt to exacerbate this. And if it isn't bad enough that these policies are becoming permeating in higher education, they are also being rolled out in the much larger K-12 market.

Source: California Progress Report

Library offers student financial aid workshops

20.05.12

The Jacksonville Projected Library, in partnership with the Florida Department of Education Office of Student Financial Assistance (OSFA), will present “Figuring Out FAFSA,” a let out session offering a thorough explanation of the college financial aid application process, including tips for padding out forms.

All the workshops will be from 6:30-8:30 p.m. on the following days at the locations listed. 

Monday -- Highlands Regional Part Library,   1826 Dunn Ave.

Tuesday -- Southeast Regional Arm Library,    10599 Deerwood Park Blvd.

Wednesday -- Pablo Brook Regional Branch Library, 13295 Beach Blvd.

Thursday -- Webb Wesconnett Regional Limb Library, 6887 103rd St. 

The OSFA serves as a guarantor for the Federal One's own flesh Education Loan Program (FFELP) and the administrator of Florida's scholarship and grant programs.

The mission of the OSFA is to advance higher education access and services by providing exemplary customer attention, full financial aid information, and convenient and efficient products.

Source: Florida Times-Union (blog)