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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 14-18, 2011

Vol. 12, No. 12

  • Congress Keeps Government Operating With Sixth Continuing Resolution
  • ED's Martha Kanter Testifies on Pell Grants Before House Appropriations Subcommittee
  • House Committee Takes Another Look at Education Regulations
  • IN BRIEF: ACE Launches Joint Venture for 21st Century GED Testing Service; ACE Letter on Debit Card Swipe Fees; Civil Rights Commission Suspends Admissions Investigation; Duncan Congratulates New ACE Board Chair Padrón

Congress continued inching forward on the budget this week, passing a continuing resolution (CR) that would extend FY 2011 appropriations for another three weeks until April 8. (FY 2011 began Oct. 1, 2010.)

The House of Representatives on Tuesday passed the new CR. The Senate followed yesterday, just a day shy of the expiration of the last CR. This is the sixth temporary measure Congress has passed as members are unable as yet to agree on a final bill.

Unlike the last CR, this newly passed bill makes no cuts to Department of Education programs. The previous CR cut $4 billion overall and $890 million from education programs, including $64 million for the Leveraging Educational Assistance Partnership (LEAP) Program and funding for some programs regarded as earmarks (such as Teach for America and the B.J. Stupak Olympic Scholarship). No funding eliminated in the last CR will be restored in this bill.

Though education programs were spared from additional cuts this time, they are not immune as the FY 2011 appropriations process continues. As I discussed last week, the House approved a spending plan (H.R. 1)—subsequently rejected by the Senate—which would have reduced the maximum Pell Grant by $845 and slashed National Institutes of Health funding by $1.6 billion for FY 2012.

Dissatisfaction with this short-term approach has been growing, as both parties are increasingly eager to finalize funding for FY 2011 and move on to FY 2012. More than 50 House Republicans voted against the CR this week, in protest of the short-term nature and limited cut levels, compared to only six who voted against the previous short-term CR. Congress continues to nick at federal spending, and displeasure with the small size of reductions, especially among Republicans, and the inability to finalize the FY 2011 spending bill may complicate efforts to bring a deal to a close.

More Pell Grant funding news this week: At a House Appropriations subcommittee hearing on Tuesday, Martha Kanter, the Department of Education's (ED) top postsecondary education official, defended the Obama administration's proposal to maintain the maximum Pell Grant award while eliminating year-round awards.

The centerpiece of the administration's higher education budget request for FY 2012 (which begins Oct. 1, 2011) is the Pell Grant Protection Act, which would identify $100 billion in savings over 10 years to be used in part to maintain the maximum award at $5,550 for the 2012-13 academic year. The plan includes eliminating the in-school interest exemption for graduate and professional students, suspending year-round Pell Grants, streamlining the Free Application for Federal Student Aid (FAFSA), increasing the interest rate on Perkins Loans to 6.8 percent and implementing a new Stafford Loan consolidation program.

According to reports ;on the hearing, both Republicans and Democrats expressed problems with the administration's proposal: Republicans spoke in favor of lowering the Pell Grant maximum, while Democrats criticized the plan to get rid of year-round grants. Kanter said the year-round provision produced only a 1 percent gain in summer enrollment and continuing it would force cuts to the maximum award, which would affect more students. Referring to the Republican proposal (H.R. 1) to cut the maximum award by $845, she said the bill "would hurt students, make college more expensive, and make it harder for the country to have the educated workforce it needs to thrive in the years ahead." It should be noted that while the proposal to cut Pell Grants for 2011-12 is not yet completely off the table, we believe the $5,550 maximum is safe. However, funding for 2012-13 remains a significant concern.

This testimony is part of ongoing efforts to lay the groundwork for the department's FY 2012 budget request. Sec. Arne Duncan testified before the same committee last week—his testimony is available here.

In another hearing this week, the House Education and the Workforce Committee continued its look into the impact of education regulations, this time focusing on the ramifications of the Department of Education's proposed gainful employment rule.

Witnesses included Arnold Mitchem, president of the Council for Opportunity in Education; Jeanne Herrmann, CEO for the for-profit institution Globe University/Minnesota School of Business; a for-profit graduate; and a job recruiter. As National Journal noted yesterday, the hearing predictably divided committee members along party lines—Republicans pointed to the injustices of targeting for-profit schools and punishing the entire industry and Democrats criticized for-profits for taking advantage of low-income students and burdening them with debt.

As you will remember, the department issued the draft gainful employment rule last summer, but has delayed the release of the final rule, due in part to the unprecedented number of comments (90,000) it received. The department is expected to introduce a final rule this spring. There are some indications it may be rethinking aspects of its earlier draft, so the final rule may differ significantly.

IN BRIEF

I hope you had a chance to review my email on Tuesday regarding the exciting changes we are making to the GED testing program. Briefly, we are in the process of creating a new GED Testing Service, a corporate entity formed jointly by ACE and Pearson, the world's largest education and testing company. This unique for-profit/nonprofit joint venture will drive the future direction, design and delivery of the GED testing program. It will also provide the greatest opportunity to date to affect the lives of many more adult learners who wish to take the GED Test. The coming months will see many transformations to what we consider one of our key programs—I will keep you updated as we move along.

We sent a letter to the Senate today urging them to oppose efforts to delay, amend or repeal the debit card swipe fee reforms enacted last year in the Dodd-Frank Wall Street Reform and Consumer Protection Act. As we wrote in the letter, we believe the law and its associated regulations will reduce debit card costs to colleges and universities. The resulting savings can ultimately be passed on to students and families through lower costs and increased resources for institutional grant aid and student services. In addition, implementing this reform will create an opportunity for colleges and universities to offer discounts to students and their families for payments made with checks and debit cards.

This week, the U.S. Commission on Civil Rights announced that it has terminated its investigation into admissions practices at a number of liberal arts colleges. The agency began the inquiry in 2009 to determine if institutions were discriminating against female applicants to minimize gender imbalances in the student body. Colleges should be receiving formal notification soon that the investigation is over. For details, see Tuesday's Inside Higher Ed.

Sec. Arne Duncan marked the election of our incoming Board chair, Eduardo J. Padrón, president of Miami Dade College (FL), with a letter of congratulations. My thanks and appreciation to Eduardo for agreeing to serve this year, as well as to outgoing president John Sexton, president of New York University, for his service last year. Click here for a list of all the new ACE Board members.

President to President will resume when Congress reconvenes after a district work break.

Molly Corbett Broad
President of ACE