Archive for: University Highlights

Education Secretary Betsy DeVos is being sued by several civil rights organizations about how her agency is investigating sexual assaults on college campuses. This past fall, the Education Department dropped Obama-era policies and issued new rules on how colleges deal with sexual assault and harassment claims. The new instructions now require that universities use higher standards of evidence to proceed with campus judicial action in the case of an allegation.

Civil rights advocacy groups argue that previous Obama-era guidelines offered critical protections for survivors of sexual assault and that the new rules, under DeVos, create a system which discourages sexual violence and assault victims from using the campus process to come forward “leading to further reductions in reports of sexual violence and assault.” According to Stacy Malone, the executive director of the Victim Rights Law Center, “They (survivors) fear they are no longer able to get a fair shake.” The actual lawsuit alleges a “Myriad of statements and actions by the Department’s leadership reveal a discriminatory viewpoint. Thus, not only does the Department’s 2017 Title IX policy fail to meet the reasoned decision and other requirements of the Administrative Procedure Act, it also violates the Fifth Amendment’s equal protection guarantee. Plaintiffs therefore respectfully request that the 2017 Title IX policy be vacated.”

Secretary DeVos announced the changes to Title IX in September, saying the previous system “lacked basic elements of due process and failed to ensure fundamental fairness.” She continued with, “There’ve been too many students wronged in a well-intentioned attempt to ensure that this issue is not swept under the rug and not in back rooms of schools any longer.” The Department of Education said it plans to enact the new guidelines after a public comment period.

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On December 20, 2017, Congress passed a tax reform bill that revised the nation’s tax code and will ultimately result in significant changes to higher education. Most notably will be a new tax imposed on excess compensation and investment income of the highest endowed private institutions. The legislation also modifies certain rules in relation to charitable deductions while excluding many of the highly publicized proposed provisions, such as taxing graduate school waivers.

New tax on large university endowments

• A 1.4 percent excise tax will be added to private universities with endowments greater than $500,000 per student.
• Will affect around 35 higher education institutions.

Excise tax imposed on executive compensation

• Non-profits will be taxed 21% on compensations over $1 million paid to employees.
• According to The Chronicle of Higher Education, the tax would be imposed on 158 private, nonprofit college employees (based of tax filings from the 2015 calendar year).

Eliminates the exemption for “advance refunding bonds”

• Previously allowed non-profits to refinance old bonds earlier to take advantage of lower interest rates and postpone upcoming debt payments.

Doubles the standard deduction for tax filers

• Will likely cut the number of people who itemize charitable contributions to colleges and universities by providing less incentive to donate.

Eliminates the charitable deduction for college seating event rights

• Donations made to universities will no longer be deductible federally if the donations are made in exchange for an opportunity to buy tickets.
• Tickets prices are likely to increase at colleges and universities with larger, more competitive athletic programs.

Tuition waivers for Graduate students will remain tax-free

• The original House bill would have taxed graduate students’ tuition waivers as income.

Johnson Amendment will not be repealed

• The Johnson Amendment prohibits tax-exempt organizations—churches, nonprofits, charities, foundations—from endorsing candidates running for political office.

A recent report, from Veterans Education Success indicates that for-profit institutions are using a federal loophole to increase revenue and disproportionally target veterans and service members. From 2011 to 2014, tuition payments to for-profit schools from the Department of Veterans Affairs and the Department of Defense increased by 60 percent—to the tune of $1.1 billion—and according to researchers, the number is an understatement since the Department of Education data doesn’t include all G.I. Bill benefit programs. The now closed Corinthian Colleges and ITT Technical Institutes alone, are estimated to have received over $1 billion in G.I. Bill benefits prior to suddenly shutting down in the last year.

The increase is likely due to declining enrollment at for-profit colleges, universities and trade schools as a result of decreased Title IV funding. To offset this loss in revenue, for-profits are using the 90-10 loophole to fill their financial voids. The 90-10 rule was passed in 1992 and bars for-profit institutions from receiving more than 90 percent of revenues from Title IV federal student funds. However, the law excludes GI bill benefits and the DOD’s tuition assistance funds from its figuring. Congressional staff said that GI Bill and DOD funds were not included in the 1992 cap on Title IV revenue because the GI Bill was not generous enough at the time. In 2008, a new Post 9/11 G.I. bill was passed allowing veterans and service members the ability to receive tens of thousands of dollars towards higher education.

This oversight has become known as the 90/10 loophole, and as a result, for-profit schools have been aggressively recruiting and enrolling veterans and service members ever since. According to Holly Petraeus, of the Consumer Financial Protection Bureau, this loophole “gives for-profit colleges the incentive to see service members as nothing more than dollar signs in a uniform, and to use aggressive marketing to draw them in.” According to Time magazine, a civil complaint filed by the state of California expressed concern over Corinthian College’s unauthorized use of the official seals of the United States Navy, Army, Air Force, and Coast Guard in its effort to boost recruitment of discharged servicemen and women. Other for-profits have been accused of similar recruitment tactics—inflated graduate salaries, false job prospects, and misleading graduation rates.

Concerned with the exploitation of veterans, Senators have reintroduced legislation to tighten VA and DOD educational funds to for-profit schools. Introduced last week, the Military and Veterans Education Protection Act, would close the 90/10 loophole in hopes of protecting veterans. According to Senator Tom Carper (D-DE), “Closing the 90/10 loophole and counting G.I. Bill dollars as federal dollars, which they are, is a commonsense fix that will help us improve educational outcomes for veterans and protect taxpayers.” The bipartisan bill is supported by more than 25 senators and endorsed by over two dozen groups and organizations including: Iraq and Afghanistan Veterans of America (IAVA), Veterans of Foreign Wars (VFW), and the National Association of Independent Colleges and Universities (NAICU). Currently, the bill is awaiting the Senate’s Committee on Health, Education, Labor, and Pensions for review.

 

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Students enrolled in Tennessee’s free community college scholarship, the Tennessee Promise, are showing more signs of success in higher education than their peers not using the program. According to data released by the Tennessee State Board of Regents, 56% of students who started in the Promise program’s first year (2015) remained in school two years later. Only 39% of high school graduates not in the program were still in school during the same time frame.

The program was introduced in 2014 and gives students up to five semesters of tuition-free attendance at any of the state’s 13 community colleges, 27 colleges of applied technology, or eligible 4-year institutions offering associate’s degrees. Beyond removing the financial burden, Tennessee Promise offers individual guidance to each participant from a mentor. Mentors help students maneuver through application and financial aid processes, and are mandatory for students to remain eligible for the program. Tennessee Promise scholarship recipients must also complete 8 hours of community service per semester enrolled and keep a GPA above a 2.0.

Tennessee Governor Bill Haslam said, “When we launched Tennessee Promise, one of the legitimate questions was, … ‘Can theses Students succeed?’ I think the results show that these students are succeeding at a decidedly better rate.”  Though drop-out rates are lower for Tennessee Promise students, the data also shows that 44 percent of the program’s first classmore than 5,500 studentshad dropped out of college without a degree by 2017. Officials argue that the number is a sign of progress with over 60 percent of non-Promise students dropping out in the same timeframe, a 17 percent difference. Tennessee’s Promise program also continues to grow, and according to The Nashville Tennessean is up four percentage points from last year with nearly 85 percent of high school seniors applying.

According to Governor Haslam, “A lot of our efforts in the remaining year and a half that we have in office will be around how do we dramatically increase the percentage of students who complete.” As an educated workforce becomes critical to ensuring economic prosperity in one’s local, state, and national communities, it seems that Tennessee’s Promise program—with its positive application, retention and graduation rates—is setting up its students for a more certain future.

 

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The U.S. Department of Education has “preliminarily concluded” that it will allow two controversial for-profit institutions to become nonprofits. Purdue University announced its intention to acquire the for-profit Kaplan University system back in April. The acquisition has since been approved by the state of Indiana, but still needed backing from the Department of Education and the Higher Learning Commission, its accreditor. Now, with federal approval, all that is needed to finalize the acquisition is authorization from the Higher Learning Commission. The move has set a major precedent in the integration of for-profits with traditional colleges and universities.

The second deal, that seems to have jumped another regulatory hurdle on its way to becoming a non-profit, is the acquisition of Education Management Corp (EDMC)—parent company of Argosy University, South University, and the Art Institutes—by The Dream Center Foundation, a non-profit created to fund philanthropic programs across the country. The Education Department said “it does not see any impediment to EDMC’s request for approval of the change in ownership or its request for approval of nonprofit institution status.” Many are concerned that the Dream Center, which has no experience running higher education institutions, will continue to operate the schools in the same manner as before. If approved by its accreditors, the move would be one of the largest for-profit to nonprofit changeovers on record.

Critics of the acquisitions cite that nonprofit conversions are being used to skirt regulations and mask hidden financial incentives. Unlike for-profits, nonprofit schools are tax exempt. Nonprofit colleges are also excluded from the 90/10 rule, which prohibits schools from earning more than 90 percent of their revenue from federal student loans. Bob Shireman of the Century Foundation—a think tank that investigates for-profit institutions—told the USA Today that the deals are like a bad restaurant being able to claim new ownership in order to improve its reputation without making any additional changes, and cites that Kaplan has been the focal point of past government investigations and lawsuits.

According to a Department of Education spokeswoman, “the department has preliminarily concluded that, based on the information provided to the department, there are no current impediments to the requests for approval of change of ownership.” For the deals to be finalized, both must be approved by their accreditors. The Dream Center-EDMC deal is a more complicated because it requires the approval of two different accrediting agencies. Argosy University is accredited by the Western Association of Colleges and Schools, while South University is accredited by the Southern Association of Colleges and Schools. The Purdue-Kaplan deal relies on approval from the Higher Learning Commission only. The HLC is reviewing the plan now and is expected to make a decision by November 2017.

 

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The Senate Committee on Appropriations has approved the Fiscal Year 2018 Labor, HHS, and Education Appropriations Bill, which as part of its overall package, will dedicate $68.3 billion in funding to the U.S. Department of Education. A previous proposal by President Trump, to cut spending from the Education Department, was denied when the Senate Subcommittee voted unanimously to increase overall education spending to the tune of $29 million.

More specifically, the bill promotes higher education affordability with a discretionary increase in Pell grants, from $5,920 to $6,020—the first in over 10 years. According to the Senate Committee, “This discretionary increase ensures the maximum award will continue to increase next school year to help students keep up with rising costs and reduce the need for student loans.”

The proposed bill also adds funding to the Year-Round Pell Program, which allows students to receive up to 150 percent of grants over a whole year, not just the fall and spring semesters. The new grant is designed to add $1,600 annually to allow students to pursue higher education year-round, in hopes of finishing up degree programs faster. The bill also outlines a plan to restore Pell aid for defrauded students and those attending colleges or universities that have closed.

Also, as reported by Inside Higher Ed, the 269 institutions accredited by the Accrediting Council for Independent Colleges and Schools have been granted an additional 18-month extension to find new accreditors. ACICS is an accrediting agency that mostly recognizes for-profit schools. In December of 2016, the U.S. Department of Education announced that it would no longer recognize ACICS, and gave schools 18 months to find valid accreditation. Under the new funding bill, schools recognized by ACICS now have 36 months, from December of 2016, to find new accreditation.

Chairman of the Appropriations Subcommittee, Senator Roy Blunt said, “The bill also continues building on our efforts to combat the opioid epidemic and make college more affordable. I urge all of my Senate colleagues to support this measure when it reaches the floor.” The bill awaits a final vote from the entire U.S. Senate.

 

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