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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, July 11-15, 2011

Vol. 12, No. 28

  • Debt Ceiling Talks Continue
  • Court Strikes Down Portion of State Authorization Regulation
  • IN BRIEF: NACUA to Hold Virtual Seminar on Gainful Employment July 28; Presidents Urge Restoration of Funding for International Programs; ACE Releases Tips to Help Student Veterans With TBI/PTSD

Negotiations on raising the debt ceiling continued to dominate Washington this week, with President Obama and Republicans deadlocked over the size and scope of a package to reduce the deficit and increase the country's $14.3 trillion debt limit. President Obama is giving congressional leaders until the weekend to determine a final plan, which must be in place by Aug. 2.

Republican leaders continued to reject any suggestion to raise revenues—including closing oil and gas loopholes and ending subsidies for ethanol producers—which was the focus of talks yesterday. For its part, the White House has quietly started to look at Sen. Mitch McConnell's (R-KY) elaborate plan to raise the debt ceiling in three separate stages while putting the political burden of doing so on the president and congressional Democrats, ostensibly in the event that House Republicans refuse to budge and a "plan of last resort" is needed.

There has not been much discussion about what a default might mean for higher education other than the broader picture of how it will affect the entire nation. The Chronicle of Higher Education yesterday noted that Moody's Investors Services has reported all but a few colleges and universities would see their credit ratings downgraded if a deal is not struck. During talks Monday, House Majority Leader Eric Cantor (R-VA) reportedly proposed ending the in-school interest exemption on all federal student loans; however the president immediately shut down that idea as a non-starter. This report offered rare insight into the negotiations, which uncharacteristically have been kept under extremely tight wraps.

Hopefully, we will all have a clearer picture of where we are going on this very important issue by next week.

As I wrote Wednesday, the U.S. District Court for the District of Columbia on Tuesday struck down the portion of the Education Department's state authorization rule which requires distance education programs to get authorization in every state where they have students.

State authorization was one of the new Education Department rules that went into effect on July 1 as part of the department's package of new program integrity regulations. The Association of Private Sector Colleges and Universities (APSCU) filed suit against the department in January, challenging state authorization along with the new rules dealing with misrepresentation and incentive compensation. While the court struck down the distance education portion of the state authorization regulation, it dismissed APSCU's challenges to the other regulations.

The Department of Education staff are still studying the decision and have not indicated how they plan to respond. In our view, they have three basic choices: (1) accept the decision, and the distance education provision falls away; (2) appeal the decision, which may or may not mean the regulation stays in place; or (3) begin the long process of revising the regulation. We are watching very carefully for a signal from them and will report to you as soon we know their plans.

We have prepared this analysis to give you more information about the ruling and its implication for the state authorization regulation moving forward. ACE and many others in the higher education community remain strongly opposed to state authorization and the rule establishing a federal definition of credit hour. We have asked Congress to repeal both regulations, and bills are currently pending in the House and Senate to do just that. I urge you to contact your member of Congress on these regulations if you have not yet done so. We will continue to follow that process closely as well as any other legal developments on this issue.

Please note the court decision does not deal in any way with either the credit hour issue or the state authorization regulation as it applies to private and religious colleges and universities. Legislative action will be required to address our concerns with both these issues.


The National Association of College and University Attorneys, with the support of ACE, has scheduled a virtual seminar on the Education Department's new gainful employment regulation. It has been estimated that there are 40,000 programs at public or non-profit institutions of higher education that may be subject to the gainful employment requirements imposed by the Department. This seminar will analyze the key aspects and compliance obligations of the gainful employment rules and help you determine whether programs at your institution are subject to reporting and disclosure requirements. It will be held July 28 from 12-2:00 p.m. EDT.

I would like to thank all of you who signed the letter this week to House and Senate Appropriations Committee leadership urging the restoration of Title VI/Fulbright-Hays funding in the FY 2012 Labor, HHS, Education and Related Agencies Appropriations bill. Specifically, the 86 presidents requested that the FY 2012 appropriations bill restore funding for 14 "educational pipeline" programs to the FY 2010 level of $125.881 million. Presidents of institutions ranging from community colleges to large research universities nationwide endorsed the letter, an indication of the broad support for these international programs.

We released a new report yesterday that offers tips for faculty and staff who may be working with student veterans suffering from "invisible injuries" like traumatic brain injury and post-traumatic stress disorder. Accommodating Student Veterans with Traumatic Brain Injury and Post-traumatic Stress Disorder: Tips for Campus Faculty and Staff offers information about these injuries as well as examples of promising practices for assisting students dealing with them. The report, available as a free PDF, was produced in partnership with America's Heroes at Work, a project of the U.S. Department of Labor, and the Association on Higher Education And Disability, with the generous support of The Kresge Foundation.

Molly Corbett Broad
President of ACE