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President to President
Molly Corbett Broad's weekly email newsletter to higher education leaders.

President to President, December 12-16, 2011

Vol. 12, No. 46

  • ​Congressional Leaders Strike Deal on FY 2012 Spending Bill
  • Defense Department Delays MOU
  • ACE Submits Brief to California Supreme Court on Breach of Research Contract Case
  • White House Asks Colleges to Participate in Jobs Initiative for Low-Income Youth
  • Register Now for ACE's Annual Meeting

Congressional leaders announced last night that they have struck a deal on a spending measure for FY 2012, which began Oct. 1. The House this afternoon approved the $915 billion omnibus spending bill, which contains several significant changes for the Pell Grant Program, by a vote of 296-121. The Senate is expected to pass it later today.

The bill wraps the nine remaining spending measures for FY 2012, including Labor, Health and Human Services, and Education, into one package. After initially taking the usual partisan stance—including talk of a government shutdown—leaders in both the House and Senate yesterday modified their tone and hammered out a compromise on several provisions standing in the way of passage.

Included in the package is a provision that applies a 1.83 percent across-the-board cut to all FY 2012 non-defense discretionary spending, which will impact student aid programs. Specifically in the Labor-HHS portion of the bill, the outcome for student aid—especially the Pell Grant Program—is not great, but not unexpected. You may remember that both the House and Senate measures assumed the maximum Pell Grant would remain at $5,550 for the 2012-13 academic year. To help finance this level of Pell, the House made eligibility changes that would eliminate Pell Grants for roughly 600,000 students. Meanwhile, the Senate bill made a change in the student loan program that would increase the cost of loans slightly for all borrowers.

The final bill includes the Senate's student loan modifications and several of the Pell eligibility changes from the House bill. Specifically, the student loan provision, which would charge interest to borrowers with subsidized Stafford loans during the six-month repayment grace period after leaving school, would save $400 million for Pell Grants in FY 2012. Eligibility changes for Pell Grants in the final bill reduce the allowable income to qualify for a maximum grant under the "automatic zero" expected family contribution calculation; require recipients to have a high school diploma or a GED Test credential or to have been homeschooled; and reduce the number of years a student can qualify for Pell Grants from nine to six. We believe these changes will affect approximately 200,000 students.

Other education provisions in the bill would increase funds for the National Institutes of Health by $300 million and for TRIO Programs by $15 million. Supplemental Educational Opportunity Grants, Federal Work-Study and GEAR UP would be level-funded.

Still to be resolved before Congress adjourns for the year is a deal on extending the Social Security payroll tax exemption, but congressional leaders yesterday also sounded an optimistic note on completing that measure today.

We received good news last night on the Department of Defense's (DoD) new Memorandum of Understanding (MOU) on the Military Tuition Assistance Program: DoD has extended the date by which institutions must sign the MOU in order to maintain eligibility to March 30, 2012.

As you may remember, ACE has been working on this issue for several months now, and we are very pleased DoD agreed to take a second look at the document. We wrote to Secretary Leon Panetta last month requesting a delay and outlining our concerns about several provisions related to the awarding of academic credit, in-school residency requirements, education plans, tuition policies and payment processing.

A bipartisan group of 52 senators wrote to Sec. Panetta Monday, also asking him to delay the MOU. The senators wrote that while they support the intent to fight fraud and abuse against members of the armed services, critical improvements need to be made before requiring institutions to sign on. The Senate letter was echoed by a wide range of military and veterans groups which also have requested that implementation be delayed until the MOU can be revised. In light of the approaching deadline, we sent a second letter Monday reiterating our concerns and once again asking for implementation to be delayed.

ACE submitted an amicus brief yesterday to the California Supreme Court, which is reviewing a Court of Appeals decision in Sargon Enterprises, Inc. v. University of Southern California (USC).

The case deals with the speculation about profits Sargon might have lost when USC breached an academic, non-commercial research agreement with the company, which makes dental implants. We believe the lower court's ruling in favor of Sargon has the potential to jeopardize the integrity of academic research and encourage exorbitant damage claims against universities.

Also signing the brief were the Association of American Universities, the Stanford University (CA) Board of Trustees, the California Institute of Technology and the Council on Governmental Relations.

The White House is launching Summer Jobs Plus, an initiative to ask organizations, including colleges and universities, to commit to creating opportunities this summer for low-income youth aged 16-24.

These commitments can come in one of three forms:

  • Life Skills Development: Mentoring and job-shadowing programs;
  • Work Skills: Unpaid internships; or
  • Learn and Earn Programs: Paid internships or on-the-job training as a part of a permanent position.

The White House believes universities, as institutions of higher learning, are uniquely suited to teach disadvantaged youth about work and education through summer learning programs. Syracuse University (NY) has already committed to providing 250 youth with paid internships.

Organizations already making commitments will be asked to participate at an event Jan. 5, 2012. If your institution is interested in this program, please contact Paige Shevlin as soon as possible at Paige_L_Shevlin@cea.eop.gov.

Participants in ACE's 94th Annual Meeting, scheduled for March 10-13, 2012, will have an opportunity to hear some of higher education's preeminent leaders from the United States and around the world discuss key current issues impacting their institutions.

Among the presenters at the Los Angeles gathering will be Jane Wellman, executive director of the National Association of System Heads, who has been in the news recently for leading the Delta Cost Project over the past five years. She also testified at last month's House hearing on college costs.

Wellman will moderate Tuesday morning's plenary session, "California—The Bellwether of American Higher Education." Joining the session will be Charles Reed, chancellor of the California State University; Jack Scott, chancellor of the California Community Colleges; Kristen Soares, president of the Association of Independent California Colleges and Universities; and Mark Yudof, president of the University of California.

Click here to see some of your colleagues talk about the benefits of attending the Annual Meeting. Follow @ACEducation on Twitter (hashtag #ACE2012) for information as it becomes available.

President to President will resume when Congress convenes in January. I wish all of you a wonderful holiday season and a happy and peaceful 2012.

Molly Corbett Broad
President of ACE