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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, March 19-23, 2012

Vol. 13, No. 11

  • House Republicans Release FY 2013 Budget
  • Duncan Testifies on Education Budget Before House Subcommittee
  • HHS Publishes Final Student Health Insurance Rules
  • DoD Continues Revising Tuition Assistance MOU
  • Court Rules in Favor of NYU in Degree-Awarding Case
  • SIGN UP NOW: Toolkit for Veteran Friendly Institutions

The House of Representatives turned to work on the FY 2013 budget this week, with the introduction of a very austere budget resolution proposed by House Budget Committee Chair Paul Ryan (R-WI).

The measure was approved by the Budget Committee Wednesday and is expected to go to the House floor next week, but is widely seen as a symbolic measure with little chance of being enacted.

The annual budget process, which begins with the release of the president's budget proposal, is usually followed by the preparation of House and Senate budget resolutions, which must then make their way through the legislative process. The resulting plan serves as a blueprint for funding each government agency. The actual decisions about how much money each program gets are made by the appropriations committees in each chamber.

However, Congress has failed to pass a budget resolution for the past three years, and given the upcoming election and the fact that the Senate does not intend to propose a budget this year, few expect the House plan to go anywhere. With no floor vote on a comprehensive budget package, members up for election are saved from difficult votes on deficits, tax hikes or spending cuts that could hurt their chances. In all likelihood, action on most of these matters will occur after the election.

Despite the lack of a spending blueprint, the House Appropriations Committee has started working on its FY 2013 bills. On the higher education front, Education Secretary Arne Duncan testified before the Appropriations Subcommittee on Labor, Health and Human Services, and Education yesterday about his department's priorities for the coming fiscal year.

The relatively short hearing was perhaps most notable for its confrontational tone. Sec. Duncan was repeatedly criticized for requesting funding for new programs (in particular the administration's proposal to put $1 billion into a higher education Race to the Top program) while level-funding existing and popular programs. Concerns about the financial health of the Pell Grant Program were also expressed, and the secretary and many members brought up their concerns about the rising cost of college tuition.

No new details about the initiatives contained in the president's budget were released, though Sec. Duncan promised to work closely with Congress on those proposals as they move forward.

The Department of Health and Human Services (HHS) has released the final rules on student health plans issued as part of the Affordable Care Act, the health care reform bill signed into law in 2010. Although there were few surprises in the final regulations, because of the long delay in publishing them, we are concerned that many institutions will have little time to negotiate with insurers to work out rates for the coming academic year.

We are also disappointed that the new rules do not address how self-insured plans for students will be affected. However, we believe that regulations to be issued by the Treasury Department on the individual mandate and minimum essential coverage could provide guidance on this question. We'll continue to communicate with the administration about the need to address this issue and will let you know of any significant developments.

Major provisions of the final rules include:

  • Lifetime dollar limits on benefits will be eliminated. In addition, annual benefit limits can be no lower than $100,000 in the 2012-13 academic year and $500,000 in the 2013-14 academic year. After 2013-14, annual benefit limits will be eliminated completely.
  • The medical loss ratio (a measure of what plans cover in benefits as a percentage of what students pay in premiums) must be at least 80 percent by 2014.
  • Plans will be required to provide preventive care without cost-sharing, including providing contraceptive services. However, student health plans of nonprofit religiously affiliated institutions qualify for a one-year delay of the new contraceptive coverage requirement. HHS has committed to developing alternative ways of providing contraceptive services like those being developed for other nonprofit employers.

Click here for a complete summary of the final regulations.

The Department of Defense (DoD) contacted us yesterday to let us know it was still finalizing the revised Memorandum of Understanding (MOU) on the Military Tuition Assistance (TA) Program that participating institutions must sign.

We wrote to DoD last November and again in December, requesting a delay in implementing the new MOU 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. DoD agreed late last year to take a second look at the MOU. The original deadline to complete revisions was March 30. However, DoD has informed us the new version will be ready shortly after that date and will go into effect this summer.

My thanks to Sens. Tom Harkin (D-IA) and Lamar Alexander (R-TN) for encouraging DoD to revise this MOU—their bipartisan support for revision was vital.

The DoD announcement follows:

"The Department has worked with many stakeholders over the past several months to revise the MOU so as to maintain its principles while clarifying language seen as problematic. We are now formally coordinating the MOU and all colleges will have ample opportunity to review it prior to signing and the policy going into effect, probably by Summer 2012. Until then, DoD will maintain the status quo with TA. A more formal statement will be forthcoming."

A New York trial court has ruled in favor of New York University (NYU) in Eidlisz v. New York University, a case that centered around the issue of evaluating student academic performance. ACE filed an amicus brief in 2010 with the court in support of NYU's appeal.

The plaintiff sued NYU in 2005 for breach of contract when the university's College of Dentistry refused to award him a doctorate upon completion of his coursework. The academic dean concluded the plaintiff lacked the minimum competence to receive the degree based on his academic career as a whole, which included repeated voluntary absences from clinical practice.

Notwithstanding the dean's conclusion—and without assessing the plaintiff's competence to practice dentistry—a New York appellate court overturned the decision of the lower court, finding for the plaintiff and summarily ordering NYU to award him a dental degree.

Supported by our amicus brief, the New York Court of Appeals in 2010 vacated the summary judgment of the appellate court and sent the case to trial. We learned this week that the trial judge found credible the reasons NYU had refused to award the degree and ruled in favor of the university. Perhaps most importantly, the court accepted as law the limited judicial review available in New York for academic and administrative decisions of colleges and universities.


ACE this week launched its Toolkit for Veteran Friendly Institutions, an interactive online resource to help colleges and universities build effective programs for student veterans.

The site, located at, highlights a variety of best practices including veteran-specific orientation offerings, on-campus veterans service centers, prospective student outreach efforts, faculty training, and counseling and psychological services for student veterans. Supported by The Kresge Foundation, the toolkit allows colleges and universities to create profiles that highlight services available on campus and to share information with peer institutions. If you have not already done so, I encourage you to take a look at the website and register your institution.

Molly Corbett Broad
President of ACE