Obama’s Agenda for Higher Education
I always dreamed of college as a place where your ideas are questioned every day and where social change just bubbles to the surface. When we hit campus this fall, many of my friends and I organized, rallied, or voted for the first time, and finally in November we witnessed the historic election of Barack Obama. Although so many other topics were at the forefront of the campaign, the new President will have to face a number of issues that affect college and college-bound students. As we look forward on the day after the inauguration, here’s a look at a few of the new administration’s ideas and goals for improving higher education.
Make college more affordable - With the economy low and tuition high, college affordability is an issue now more than ever. Obama’s proposals on college include simplifying financial aid applications, expanding Pell Grants, and introducing a $4000 tax refund in exchange for 100 hours of community service per year. Another controversial proposal is eliminating the Federal Family Education Loan Program (which includes Stafford, PLUS, and Consolidation Loans). Unlike the Direct Loan Program, the FFEL Program is privately funded, making their interest rates higher. Funding for the FFEL Program would then be shifted to expanding financial aid.
Prepare more students for college - In the Senate, Obama has worked on a proposal to provide grants for high school students looking to get credit at community colleges, and the new administration aims to increase the percentage of high schoolers taking AP, IB, and other college-level classes. The new administration also intends to fund expansion of Early Assessment Programs, optional tests to see if high school juniors are college-ready. If the new $4000 tax refund is approved, recipient students could earn their community service hours by mentoring high schoolers in approved college-readiness programs.
Promote community colleges - A major goal of the new administration is to expand and improve community college. One piece in the agenda is to provide more grants to community colleges so that they can better research and address what job skills and education are in high demand. The plan would also reward community colleges that graduate more students or transfer more students to four-year colleges.
Of course, the new President can claim as many ideas as he wants, but how many of them will turn into action? Which ones should turn into action? Leave us a comment with your thoughts. Then, voice your opinion at Change.gov, the Office of the President’s new web site, and make sure that higher education is a priority for the next four years.
And……….. if you really want to see change in this country, get educated! Choose a major that will help you invoke change or consider going back to school to get a degree to improve this great country. There are tons of options out there. And of course (shameless plug), don’t forget to find your college match at myUsearch.
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January 21st, 2009 at 2:53 pm
Students can vote with their feet also. A few years ago the FFELP loans were more attractive because many lenders competed using added benefits. These are gone now and students who will be taking student loans can voice their opinion of the FFELP by going to schools that use the Direct federal student loan program.
January 21st, 2009 at 4:01 pm
Two statements made about the Federal Family Education Loan Program are incorrect.
First, eliminating FFELP, which serves 75% of schools and students, would produce very little, if any, savings. The only way eliminating FFELP would save money is if the government Direct Loan program could pick up FFELP’s loan volume and administer it more cheaply. Right now, FFELP is less costly, meaning eliminating it would cost money. (Eliminating FFELP would also require 4,000 schools to spend the time and resources to switch programs.)
Second, the author is incorrect when she states that because “the FFEL Program is privately funded,” its interest rates are higher. By law FFELP rates can be no higher than the Direct Loan program’s. In fact, for years, interest rates and upfront fees offered by FFELP loan providers have been lower. Why? They compete with each other for borrowers’ business. As a result, borrowers have saved millions of dollars.
January 26th, 2009 at 12:20 am
Community colleges are going to be increasingly important during hard economic times. With intense competition for jobs, applicants are going to need to show they have education or technical/specialty expertise. Not everyone can afford a university education, yet at the same time, today’s worker can’t afford to go without an education. Community colleges will also be there to help those who already have post secondary education to obtain certifications or other special skills to add to thier resumes, giving them a leg up on the competition or even keeping the job they already have secure.
May 28th, 2009 at 8:18 am
Kevin Bruns is the paid lobbyist of the Student Loan Industry - kinda pathetic that as much as he’s paid to shill for the industry, he’s on obscure blogs. FFELP savings were first reported under the Bush administration (who had a corrupt student loan division of the DOE, the COO resigned and one of her people was taking $100k from the loan industry). Now Obama is using the same numbers. Yes, he will use the private lenders (at first) to service loans. It’s the corruption in origination that is the problem.
The student loan industry is ripe with greed, arrogance, and corruption.
And it just seems to never end. In May of 2009, “District attorney’s investigators raided City College of San Francisco on Wednesday, seeking evidence that college officials had illegally spent public money on donations to education-related political campaigns. A copy of a search warrant served on the college shows that investigators are scrutinizing the actions of former Chancellor Philip Day, who left the college last year to work for an education lobbying firm in Washington, D.C.” (from San Francisco Chronicle) Mr. Day happens to be CEO of the NASFAA, the organization that represents financial aid directors.
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/05/07/MNJQ17FTEQ.DTL
The Sallie Mae CEO has taken nearly a half billion dollars personally as a middleman. He now owns three mansioned estates (annapolis, MD / Harwood, MD / Naples, FL), one with a private 18 hole golf course - although an old photo and the golf course is still under construction, you can see where taxpayer subsidy dollars go via Google Maps at coordinates 38°51’38.52″N, 76°40’4.47″W
Sallie Mae owns two private jets - they used to own three. The jets are tail numbered N50FD and N188AK.
You can see these jets at the following links:
http://www.airliners.net/photo/Israel-IAI-1125A-Astra/0523432/L/
http://www.airliners.net/photo/Israel-IAI-1124-Westwind/0841982/M/
That is where the taxpayer subsidies are going, private golf courses and private jets.
When a FFELP loan defaults, the taxpayer pays nearly twice the amount of the loan. Sallie Mae is allowed to attach fees, penalties, and crank the interest rate up to above credit card rates. After a period, they capitalize those fees, penalties, and interests and put the loan to the taxpayer for payoff. So, a 20k loan becomes more than 40k cost to the taxpayer. In the direct program, the 40k might still be the receivable, but it does not effect cash flow as we see with the middlemen involved. Why are we funding this madness?
Let’s not forget the corruption that the subsidies fund. The following student aid administrators got into more than a little hot water for taking kickbacks and other inducements from the student loan industry - most lost their jobs:
Ellen Frishberg - Johns Hopkins
Catherine Thomas - USC
David Charlow - Columbia
Lawrence Burt - University of Texas
Walter Cathie - Widener University
Tim Lehmann - Capella University
Daniel Pinch - Emerson College
In the investigations of 2007, many Universities were fined for revenue sharing schemes. Specifically, University of Pennsylvania, New York University, Syracuse University, Fordham University, Long Island University and St. John’s University have agreed to reimburse students a total of $3.27 million for inflated loan prices caused by revenue sharing agreements.
CHOICE? Choice is a myth or a lie depending on how you look at it. In 2008, more than 100 Universities were under investigation for more than 90% of their FFELP loans going to one provider. The notion that there is competition in this “market” is ridiculous - the student loan companies pay or induce schools for preferred lender status resulting in nearly all loans at any one school going to one provider. In the above instances, those inducements were to the administrators themselves. From “School as Lender” to call centers to printing - the inducements to schools are great and the payoffs for the middlemen even greater.
Of course, some in congress receive so much cash from the student loan industry, they will try to derail this improvement. Particularly, Buck McKeon and John Boehner receive the most from the student loan industry. Buck and Boehner have been the champions of the industry for years and are responsible for much of the elimination of competition and stripping of consumer protections for student loans - all to the benefit of the middlemen lenders. There are no student loan companies in Buck or Boehner’s districts and no meaningful employment by student lenders in those districts. Now, Lamar Alexander is joining in with them. This is pure pay for play.