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President to President

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

President to President, June 4-8, 2012

Vol. 13, No. 19

  • ACE Task Force Releases Recommendations on Accreditation
  • Appeals Court Ruling on Program Integrity Rules Yields Mixed Results
  • VA Request on Military, Veterans Education Raises Concerns
  • Presidents Meet at White House to Discuss College Costs
  • White House Announces Changes to Income-Based Loan Repayment Program
  • AGB Alert on Security and Exchange Commission Municipal Advisor Rule
  • IN BRIEF: New Higher Education Tax Extenders Bill Introduced in Senate; Highlight Change on Your Campus at ACE's 2013 Annual Meeting

Before I get to this week's developments in Washington, I wanted to let you know that ACE's National Task Force on Institutional Accreditation released its final report yesterday.

The ACE Board of Directors urged the creation of this task force so we could share with the academic community an assessment of the value of voluntary peer review in light of wide-ranging changes in the higher education landscape. As a result of that review, it is clear that action is needed to preserve the best of accreditation's historic approach while ensuring it functions effectively in its role of providing public accountability.

The report, Assuring Academic Quality in the 21st Century: Self-Regulation in a New Era, offers six major recommendations for steps colleges, universities and regional accreditors can and should take to ensure accreditation meets its public accountability responsibilities given the enormous diversity of American higher education.

My deepest thanks to task force co-chairs Ed Ayers, president of the University of Richmond (VA), and Robert Berdahl, president emeritus of the Association of American Universities and interim president of University of Oregon, for all of their work over the past year overseeing this important task, and to the presidents, chancellors, and accreditation experts who served on the panel.

I hope you will take some time to review the recommendations and let me know your thoughts. We plan to issue a follow-up report in 2014 on the progress made on this effort.

The U.S. Court of Appeals for the District of Columbia ruled this week on the competing appeals by the Association of Private Sector Colleges and Universities (APSCU) and the Department of Education (ED) challenging the district court decision concerning ED's program integrity regulations. The decision was somewhat mixed, but it largely let the rules stand while directing the district court to send some parts back to ED for review.

As you might remember, APSCU filed a lawsuit over three of the more than 10 rules ED tightened in 2010. APSCU sought to strike down regulations relating to state authorization of higher education institutions, incentive compensation for student recruiters and misleading marketing (or "misrepresentation"). While the appeals court decision provides some limited relief from the regulations, it leaves the bulk of them in place and has given clear direction to ED on reissuing or revising the deficient sections.

The district court had vacated the state authorization regulation distance learning provision, and the appeals court affirmed that ruling, finding that ED had not provided adequate notice of the proposed rule. The appeals court sent the incentive compensation rule back to the district court for review of the decision to eliminate the safe harbor for compensation based upon program completion and review of the suggestion that the new regulations might adversely affect diversity outreach. Finally, the appeals court ruled that aspects of the misrepresentation regulations represented "overreach" by the department, and directed ED to revise a number of provisions included in the rule.

APSCU is also fighting ED's gainful employment regulations in a separate lawsuit, which has yet to be decided.

We learned this week that the Department of Veterans Affairs (VA) has sent letters to colleges and universities, asking them to commit to comply with the Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses, and Other Family Members outlined in an executive order issued in May.

The letter directs institutions to email the VA by Saturday, June 30, indicating whether or not they agree to comply with the principles by the end of 2012-13 academic year. Institutions with multiple or branch campuses may send a single response from the main campus. A list of institutions agreeing to comply will be posted on the VA website.

Both the National Association of College and University Business Officers (NACUBO) and the National Association of Independent Colleges and Universities (NAICU) are recommending that their members delay responding to the letter until more information is available. (See NACUBO's testimony before a House subcommittee last month on the issue.) We agree with NACUBO and NAICU that the executive order was not written in sufficient detail to serve as compliance requirements, although we hope further clarification will reveal that compliance is a positive step for students and campuses alike. We strongly support providing student veterans with the appropriate information to protect them from the unethical behavior of a small number of institutions.

For more on the executive order, see our summary memo.

Continuing the election-year focus on college costs, the White House on Tuesday hosted a meeting with Vice President Joe Biden, Education Secretary Arne Duncan, and 10 college and university presidents who have agreed to include a "shopping sheet" in the financial aid packages they send to accepted students.

The shopping sheet is intended to simplify the current process of comparing colleges, and would include the cost of a year of classes, the student's net cost after grants and scholarships, financial aid options to pay that cost and estimated monthly payments for federal loans. It would also provide information about retention and graduation rates and the share of graduates who default on their student loans.

Although the Education Department and the Consumer Financial Protection Bureau proposed the shopping sheet in January, Congress would have to pass legislation in order for it to be mandatory. However, the institutions represented at the meeting—Arizona State University, Miami Dade College (FL), North Carolina State University, the State University System of New York, Syracuse University (NY), the University of Massachusetts System, University of North Carolina at Chapel Hill, the University System of Maryland, the University of Texas System, and Vassar College (NY)—have agreed to voluntarily provide the information starting with the 2013-14 school year.

In other student financial aid news this week, the Obama administration announced an initiative yesterday aimed at easing access to student loan repayment options, particularly income-based repayment.

The plan calls for the Education and Treasury departments and the Internal Revenue Service to streamline the process for applying for income-based repayment plans, which cap borrowers' monthly payments based on their ability to pay. Federal student loan borrowers will be able to submit income information from their IRS tax return and apply in one sitting. About 700,000 people currently participate in income-based repayment plans, but Education Secretary Arne Duncan said the administration believes many more students likely qualify.

The plan requires federal direct student loan servicers to make borrowers aware of their eligibility for an income-based repayment plan before graduation.

As you may recall, ACE filed comments last year with the Securities and Exchange Commission (SEC) concerning its draft regulations on so-called "municipal advisors." These draft regulations are part of the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The proposed rules may impact some college and university employees and trustees or regents, who could be required to register as "municipal advisors" with the SEC if they provide "advice" regarding municipal financial products or the issuance of municipal securities such as tax exempt bonds. Our comments requested that college and university officials be excluded from the definition of municipal advisor in the final rule. We anticipate that the final rule will come later this year.

Since the SEC issued its draft rules, we've been working very closely with the Association of Governing Boards of Universities and Colleges (AGB) Association of Governing Boards of Universities and Colleges (AGB) and other higher education associations on this issue. Based on several conversations that AGB has had with SEC staff and leadership, the final outcome of the rule making process remains unclear. As a result, AGB sent a letter to the SEC in March with suggested language to exempt our governing board members and senior staff from the definition of "municipal advisors."

We understand that the SEC would still welcome comments about the proposed rule from the higher education community. This week, AGB sent an action alert to its members urging them to consider contacting the SEC about this issue. I believe that this is an important enough issue that you may want to take similar action.


We sent a letter of support yesterday to Sens. Charles Schumer (D-NY), John Kerry (D-MA) and Robert Menendez (D-NJ) for their newly introduced bill, the American Opportunity Tax Credit Permanence and Consolidation Act of 2012 (S. 3267). The bill would significantly improve the current American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit by consolidating them into one simplified, permanent AOTC that will provide up to $3,000 per year in tax relief for middle class students and their families. It also would expand the eligible expenses of the current AOTC, increase income phase-out thresholds, and replace current limits on the number of years a student can utilize the AOTC with a $15,000 lifetime cap. In steps that would particularly benefit low- and moderate-income students, the act maintains the 40 percent partial refundability of the current AOTC and better coordinates the interaction of the credit with the Pell Grant.

During ACE's 95th Annual Meeting, "Leading Change," scheduled for March 2-5, 2013, in Washington DC, we will hold several sessions highlighting innovative initiatives on our member campuses that have led to meaningful, transformative change. ACE seeks proposals that address major issues such as access and attainment, learning outcomes, developing leaders, and sound fiscal or other administrative practices (especially those that increase productivity). We invite you to submit a proposal for a presentation about such an effort on your campus. We seek a presentation by key members of your staff involved in the effort. The deadline for submissions is June 27, 2012. Visit our website to submit a proposal and for more information.

Molly Corbett Broad
President of ACE