The White House is seeking input from colleges and consumers about a draft “College Scorecard” that would provide prospective students with information about a college’s cost, graduation rate, average debt burden, loan-repayment rate, and job-placement rate. The scorecard, which President Obama announced in a speech at the University of Michigan last week, is designed to make it easier for students and their parents to comparison-shop for college.  Read more here.

Automatic spending cuts, or sequestration, was established through the Budget Control Act passed by Congress last August and is set to go into effect January 2013.  The sequestration process has great implications for all federal discretionary programs, including most – if not all – of federally funded research programs. Below is a link to a detailed explanation of this process and the impacts to federal spending in both the short- and long-term.

Sequestration_Details.pdf

Details are beginning to emerge on Obama’s proposal to make college affordable.  He spoke to this during his State of the Union address on Tuesday, and again today at an event at the University of Michigan.  US Department of Education Secretary Arne Duncan has also been talking about this issue since late last year, and often refers to the challenge as looking “beyond the iron triangle” of cost, quality, and access.

Obama is proposing a financial aid overhaul that would – for the first time – tie colleges’ eligibility for campus-based aid programs (Perkins loans, work-study, and supplemental grants for low-income students) to the institutions’ success in improving affordability and value for students.  Under the proposed plan, the amount available for Perkins loans would grow to $8 billion, from the current $1 billion. Obama also wants to create a $1 billion grant competition, along the lines of the Race for the Top program for elementary and secondary education, to reward states that take action to keep college costs down.  Finally, he has also proposed a separate $55 million competition for individual colleges to increase their value and efficiency.

The administration also wants to give families clearer information about costs and quality, by requiring colleges and universities to offer a “shopping sheet” that would make it easier to compare financial aid packages and post-graduate earnings and employment information – all in an attempt to give students and families a better sense of what to expect from the college and after graduation. This would be in addition to the requirement imposed this year on the “college cost calculator.”

These proposed changes would all require Congressional approval, which is not likely to happen this year.  While some legislation may get introduced, most of the discussion around these ideas will take place out on the campaign trail.  Hang on for a bumpy ride!

Read more about the State of the Union address. 

Read more about the President’s speech at University of Michigan. 

Read more about Secretary Duncan’s “Beyond the Iron Triangle” speech.

Resolutions were introduced in both the House and the Senate (H.Res.458 and S.Res.313) recognizing the UW’s 150th year and its’ contributions to Washington state and the nation.

The Senate resolution – introduced by Senator Cantwell and cosponsored by Senator Murray, passed the chamber this morning by unanimous consent.

The House Resolution was introduced by Congressman McDermott and cosponsored by Representatives Smith, Larsen, Inslee, Dicks, Reichert, and Herrera Beutler.

Link to Cantwell Press Release

President Obama announced today at a speech at the University of Colorado Denver, a new initiative called ‘Know Before You Owe’ designed to make college loans more affordable and reduce the financial burden on recent graduates – many of whom are struggling to find employment.

The administration is essentially speeding up by 2 years, a federal law that was set to go into effect in 2014. Announced today and beginning in January of 2012, students with federal loans who enroll in the Income Based Repayment Plan will experience a cap on their federal student loan repayments at 10% (currently 15%) of discretionary income and all remaining debt on these federal loans will be forgiven after 20 years (currently 25 years).

The second part of the initiative encourages students with one or more types of federal loans to consolidate them for a 0.5% interest rate reduction.

The administration estimates that this could affect up to 1.6 million borrowers and save some students hundreds of dollars a month.

The House Appropriations Committee released their draft Labor-HHS-Education spending bill today in which they executed several spending cuts and revoked all additional funding for “Obamacare”. Some highlights:

Health & Human Services

• The Health Resources and Services Administration (HRSA) is funded at $6.7 billion, a $1.5 billion increase over FY11 levels
• The National Institutes of Health (NIH) is funded at $31.76 billion, which is $1.4 billion above FY11 and designed to support at least 9,150 new and competing research projects
• Head Start would receive $8.09 billion, approximately $500 million above FY11
• The Center for Medicare/Medicaid Services takes a cut of $290 million from FY11 with an FY12 funding level of $3.2 billion

Education

• Investing in Innovation (i3) funding is eliminated by the House in their FY12 bill
• International Education & Foreign Language (Title VI) is cut by approximately $10 million to $66.7 million from already reduced FY11 levels
• Federal Work Study is level funded at $978.5 million
• TRIO is level funded at $826.5 million
• GEAR UP is level funded at $302.8 million
• the Fund for the Improvement of Post-secondary Education (FIPSE) is eliminated by the House for FY12
• The Pell Grant Program is maintained at a maximum award amount of $5,550 but in order to fill the shortfall in the program, the Committee suggests limiting lifetime eligibility to 6yrs (from 9yrs), rolling back recent changes to the qualification formula, and eliminating eligibility for students who attend school less than half time or students who do not have a diploma/GED

The American Jobs Act introduced by President Obama last week and delivered to congress in full bill form this week, looks like it may carry some tax implications for UW.

• If passed, the bill would expand and extend the existing payroll tax reduction for employees from the already reduced rate of 4.2% to 3.1%.
• Would reduce the payroll tax cut for employers to 3.1% – half of what it is now – for the first $5 Million of payroll. This applies to institutions of higher education, but is designed to primarily benefit small businesses – it will have a minimal impact on UW.
• A couple of tax credits for hiring veterans and long-term unemployed workers may carry a small financial benefit for UW.
• $30 billion for state aid, which would not apply to institutions of higher education, but the provision does contain a Maintenance of Effort provision designed to protect higher ed funding at the state level.

Portions of the bill have already drawn opposition from both parties, and it is unlikely that it will pass completely in its current form. We are more likely to see the tax credits enacted, while the state aid will be more contentious.

The Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies held a hearing yesterday on the Department of Education’s FY12 budget. Secretary Duncan was the witness.

In his opening remarks, Duncan expressed concern that America has gone from being a world leader in education to now being “middle of the pack”.  He also emphasized that demand on the Pell program has increased from 6 million to 9 million students in 2 years and that the Department is focused on closing the Pell shortfall – currently $11 billion – through increased efficiencies and more resources. The Pell program accounts for a third of the Department’s total $77 billion FY12 request. The Secretary cites the increasing number of lower income families and more families without jobs as the reason for the increased demand for the grants. Earlier this week, both Reid’s and Boehner’s debt ceiling deals contained an elimination of the in-school interest subsidy for graduate students, with the money saved by doing this going back into the Pell program to help shore up the shortfall for the next two years. Although this will have a negative effect on students, out of the many rumored changes to Pell that have been floating around during the past few weeks and the negotiation process, this is the best possible outcome for the university community. Pell and changes to the program will continue to be an issue as we head towards Fall and finishing up the FY12 process.

The Committee also brought up the concern that 89% of first-generation college students do not complete their degree. The Secretary stated that this was one of the Department’s FY12 priorities, and they are trying to solve this problem in three ways: 1) Fighting to maintain access to Pell. 2) Investing in community colleges and partnerships with the private sector to leverage funding. 3)  Investing in programs such as i3 and the proposed “First in the World Competition”. The First in the World Competition would provide “venture capital” to encourage innovation approaches to improving college completion (particularly low-income and minority students), research support to build the evidence of effectiveness needed to identify successful strategies, and resources to scale up and disseminate strategies we already know are successful.

The Labor-HHS-Ed Appropriations bills have not yet been drafted in the House or the Senate and we don’t expect to see them until after the August recess.

The National Science Foundation(NSF) and the United States Agency for International Development(USAID) launched a new collaborative program called PEER (Partnership for Enhanced Engagement and Research) last week. PEER is a new international, interagency joint initiative which will address environmental challenges that affect both the United States and the developing world by reinforcing existing relationships and creating new connections. It will unite NSF’s competitively-awarded scientific investments in U.S. institutions with similarly awarded USAID funding to solve global challenges.

More information can be found here.

On July 6, the Department released the application for the next phase of the Promise Neighborhoods program, including a second round of planning grants and new implementation grants, totaling $30 million.  Institutions of higher education are eligible to apply for funds to develop or execute plans that will improve educational and developmental outcomes for students in distressed neighborhoods.  The Department expects to award four to six implementation grants with an estimated grant award of $4 million to $6 million.  Grantees will receive annual grants over a period of three to five years, with total awards ranging from $12 million to $30 million.  Remaining 2011 funding will go toward 10 new one-year planning grants with an estimated grant award of $500,000. 

More info can be found here

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