Monday, February 25, 2013

Threat of Sequester Has Researchers and Aid Officers Scrambling - Government - The Chronicle of Higher Education

Threat of Sequester Has Researchers and Aid Officers Scrambling - Government - The Chronicle of Higher Education

February 25, 2013
Scholars and Aid Officers Brace for Looming Budget Cuts
Matt McLoone for The ChronicleFrancis Collins (center, standing), director of the National Institutes of Health, discusses the potential impact of forced budget cuts on medical research with Sen. Barbara A. Mikulski, Democrat of Maryland.
By Kelly Field
With only days remaining till steep federal spending cuts take effect, colleges and students are bracing for painful reductions in research, student-aid, and job-training programs. Some researchers say federal grant making has slowed already, as the science agencies prepare for tighter budgets.

Unless Congress acts to avert the cuts by March 1, the federal budget will be slashed by roughly 5 percent across the board through a process known as "sequestration." Thousands of researchers will lose their jobs, thousands of students will lose their financial aid, and thousands of unemployed workers will be turned away from college work-force programs.

"Sequestration is a reckless and blunt tool," said Peter McPherson, president of the Association of Public and Land-Grant Universities. "It would have severe, long-term impacts that would put our nation at an extreme disadvantage for years to come."

Recognizing the toll that across-the-board cuts could take on the still-fragile economy, President Obama has urged lawmakers to reach a deal to head off or at least postpone them. But lawmakers appear to have reached an impasse instead, with both sides more focused on assigning blame for the damage than on preventing it.

Calculating the precise impact of the cuts is tricky, since they would be applied to a fiscal 2013 budget that Congress hasn't passed yet, and since the agencies would have some discretion over how to distribute them. Still, the White House has warned that the reductions would force science agencies like the National Institutes of Health and the National Science Foundation to make hundreds, even thousands, fewer research awards, costing thousands of scientists and students their jobs.

Federal work-force-development programs, which have been cut by 30 percent since 2001, stand to lose $460-million more in the 2013 fiscal year if the cuts are applied evenly, according to the National Skills Coalition. That would prevent community colleges and other aid recipients from serving some two million workers and employers, according to the coalition.

Student aid would suffer as well. Though Pell Grants would be exempt from the sequester this year, Federal Work Study and Supplemental Educational Opportunity Grants would not. Arne Duncan, the secretary of education, has told lawmakers his department will make 33,000 fewer work-study awards and 71,000 fewer supplemental grants next year if the cuts take effect. College-preparatory programs, such as TRIO and Gear Up, would also take a hit.

Anticipating the cuts, colleges are budgeting conservatively, putting off hiring decisions, and warning students that their financial-aid awards may be reduced. At the University of Michigan at Ann Arbor, Pamela W. Fowler, executive director of financial aid, is holding back institutional aid to cover the work-study shortfall.

Poorer institutions, like Philander Smith College, in Arkansas, said they won't have the resources to make up the difference to students. David D. Page, the college's director of financial aid and vice president for enrollment management, expects parents to turn instead to PLUS loans—if they can. Like many historically black institutions, Philander Smith has seen a significant decrease in the number of applicants approved for the loans as the government has tightened its underwriting standards. This year only 39 families were approved, down from 151 the year before. That decline contributed to an enrollment drop that cost the tiny college $900,000 in revenue, Mr. Page said. "Cuts like that hurt not only students but the institution as well," he said.

Louise Esveld, director of pre-college programs at Central College, in Iowa, has prepared two budgets for her Upward Bound program—one assuming flat funds, the other based on sequestration. She's holding off on hiring faculty and mentors until she knows which budget she'll be working from.

If her budget is cut, one of the first items to go will be cultural experiences, such as trips to museums and the theater for low-income students who have never visited either.

Disruptions in Research
Meanwhile, researchers are reporting delays in the grant-making process, as federal agencies prepare for a new era of austerity. The University of California says it's received 25 percent fewer federal research dollars than it had at this time last year. At Boston University, Provost Jean Morrison said she has seen a slowdown in the issuing of requests for proposals, as well as lags in funds for new grants.

Such reductions and delays can "cause disruptions in the process that can't always be easily overcome," she said. "The research enterprise is not like a light switch that can be flipped on and off."

Tim Leshan, president of the Science Coalition, an association of research groups, said he's heard from some members who have received only half of their scheduled awards. Mr. Leshan said the delays had made it difficult for researchers to make hiring and purchasing decisions.

Francis S. Collins, the NIH's director, said the uncertainty is already scaring away young researchers. "If we lose the talent of this up-and-coming generation, with all their great ambitions, they're not coming back," he said last week.

Since October, when the 2013 fiscal year began without Congress approving a budget, the NIH has made 10-percent cuts in payments on grants approved in previous years. Now, with sequester pending, it's simply approving fewer grants, Dr. Collins said.

"We have been very reluctant to make the number of awards that we normally would at this time of year, because we don't know what we're going to have to work with," he said.

In a sign, perhaps, of how much scientists dread the projected cuts, research universities have joined forces with the defense industry to lobby against them. Colleges and defense contractors have long competed over federal dollars. Still, they have a common interest in preserving the Department of Defense's research-and-development budget, which could be slashed by $5.4-billion under sequestration, according to the American Association for the Advancement of Science.

"We're all feeling very threatened," said Hunter R. Rawlings, president of the Association of American Universities. "The prospects are dire on both sides of the ledger."

Under sequestration, the pain would be spread evenly, with defense and nondefense spending each absorbing half of the more than $1-trillion in cuts scheduled for the next decade. The reductions were to start in January, but Congress postponed them until March 1. To pay for the delay, it reduced the caps on how much Congress can spend on defense and nondefense programs by $4-billion this fiscal year and $8-billion the next.

Those caps, coupled with other spending limits imposed by Congress, mean that colleges could face spending cuts even if lawmakers reach a last-minute deal to avert sequestration. Those cuts wouldn't be as indiscriminate as the sequester's, and lawmakers could choose to spare student aid and research the worst of the pain. Even so, colleges could be in limbo until at least the end of March, when a short-term spending bill for the 2013 fiscal year will expire, forcing lawmakers to act.

Friday, February 22, 2013

Online Courses Could Widen Achievement Gaps Among Students - Wired Campus - The Chronicle of Higher Education

Online Courses Could Widen Achievement Gaps Among Students - Wired Campus - The Chronicle of Higher Education

February 21, 2013, 4:28 pm
By Jake New
Low-cost online courses could allow a more-diverse group of students to try college, but a new study suggests that such courses could also widen achievement gaps among students in different demographic groups.

The study, which is described in a working paper titled “Adaptability to Online Learning: Differences Across Types of Students and Academic Subject Areas,” was conducted by Columbia University’s Community College Research Center. The researchers examined 500,000 courses taken by more than 40,000 community- and technical-college students in Washington State. They found that students in demographic groups whose members typically struggle in traditional classrooms are finding their troubles exacerbated in online courses.

The study found that all students who take more online courses, no matter the demographic, are less likely to attain a degree. However, some groups—including black students, male students, younger students, and students with lower grade-point averages—are particularly susceptible to this pattern.

Shanna Smith Jaggars, who is assistant director of the Community College Research Center and one of the paper’s authors, said the widening gap is troubling, as it could imply that online learning is weakening—not strengthening—education equality.

“We found that the gap is stronger in the underrepresented and underprepared students,” Ms. Jaggars said. “They’re falling farther behind than if they were taking face-to-face courses.”

Online learning can still be a great tool, she said, particularly for older students who juggle studying and raising a family. For those students, as well as female and higher-performing students, the difference between online and physical classrooms was more marginal, according to the study.

“So for older students, you can sort of see the cost-benefit balance in favor of taking more courses online,” Ms. Jaggars said. “They might do a little worse, but over all it’s a pretty good trade-off for the easier access. But where a student doesn’t need online courses for their access, it’s unclear if that is a good trade-off.”

Kathy B. Enger, director of the Northern Lights Library Network and an online educator for a decade, said online learning isn’t just about access. It can also offer an environment that encourages minority students to more easily speak up without worrying about “microaggression,” such as a snicker or a rolling of the eyes, from a predominantly white classroom, Ms. Enger said. “There’s more freedom for students to express themselves and feel validated in an online environment,” she added.

The study suggested several ways to improve online courses, including screening students first and allowing only higher-performing students to take courses online. Ms. Jaggars admitted, however, that such a strategy could put some students at a disadvantage, especially older students who enroll in the courses specifically for easier access and who do fairly well in them.

“But then we have to figure out how to help other students succeed in these classes,” she said. “We need a lot more teacher training, showing them tactics to use to try and reach out. I think it’s difficult for faculty to know how to do that online. Not that they don’t want to. It’s just hard.”

Ms. Enger said that if students are falling behind in online courses, it’s generally because the professor teaching the course is not reaching out in the right ways.

“If it’s not working, find out what’s not working,” she said. “Then make it work.”

Thursday, February 21, 2013

How EdX Plans to Earn, and Share, Revenue From Free Online Courses

How EdX Plans to Earn, and Share, Revenue From Free Online Courses - Technology - The Chronicle of Higher Education

How can a nonprofit organization that gives away courses bring in enough revenue to at least cover its costs?
That's the dilemma facing edX, a project led by Harvard University and the Massachusetts Institute of Technology that is bringing in a growing number of high-profile university partners to offer massive open online courses, or MOOCs.
Two other major providers of MOOCs, Coursera and Udacity, are for-profit companies. While edX has cast itself as the more contemplative, academically oriented player in the field, it remains under pressure to generate revenue.
"Even though we are a nonprofit, we have to become self-sustaining," said Anant Agarwal, president of edX. And developing MOOCs, especially ones that aspire to emulate the quality and rigor of traditional courses at top universities, is expensive. Harvard and MIT made an initial investment of $30-million each last year to start the edX effort.
Legal documents, obtained by The Chronicle from edX, shed some light on how edX plans to make money and compensate its university partners.
According to Mr. Agarwal, edX offers its university affiliates a choice of two partnership models. Both models give universities the opportunity to make money from their edX MOOCs—but only after edX gets paid.
The first, called the "university self-service model," essentially allows a participating university to use edX's platform as a free learning-management system for a course on the condition that part of any revenue generated by the course flow to edX.
The courses developed under that model will be created by "individual faculty members without course-production assistance from edX," and will be branded separately in the edX catalog as "edge" courses until they pass a quality-review process, according to a standard agreement provided to The Chronicle by edX.
Once a self-service course goes live on the edX Web site, edX will collect the first $50,000 generated by the course, or $10,000 for each recurring course. The organization and the university partner will each get 50 percent of all revenue beyond that threshold.
The second model, called the "edX-supported model," casts the organization in the role of consultant and design partner, offering "production assistance" to universities for their MOOCs. The organization charges a base rate of $250,000 for each new course, plus $50,000 for each time a course is offered for an additional term, according to the standard agreement.
Although the edX-supported model requires cash upfront, the potential returns for the university are high if a course ends up making money. As with the self-service model, edX lays claim to the first $50,000 of revenue for a new course, or $10,000 for a recurring one. But after that, the university gets 70 percent of any additional revenue.
The university partners can choose which model they want to use on a course-by-course basis, and every 12 months they have the opportunity to switch from one to the other. "If it's more in the university's interest to switch models, then edX will recommend that they do that," said Mr. Agarwal.
Both edX models offer higher shares to universities than agreements with Coursera do, but only once edX has collected its minimum payment. Coursera offers universities 6 percent to 15 percent of the gross revenue generated by each of their MOOCs on its platform, as well as 20 percent of the profits generated by the "aggregate set of courses provided by the university."
There is no minimum payment to Coursera—meaning universities are guaranteed a cut of any revenue for their MOOCs on Coursera, even if the company offers a smaller piece of the pie than edX does.

Revenue Still a Puzzle

The details of edX's financial arrangements do not answer the crucial question of how the MOOCs will make money in the first place—and, in edX's case, whether courses that do make money will make enough that universities will see a cut.
The organization is still "in start-up mode," said Mr. Agarwal. "We don't quite know what the key source of revenue will be."
Potential moneymaking strategies include deals with outside companies—such as publishers that are looking to sell their products to the many students who register for MOOCs, or employers looking to recruit the most impressive students.
"EdX will be entitled to all net profits from agreements with third parties not directly related to College/UniversityX courses," the standard agreement stipulates, "including, for example, book sales on the site, proctoring services, and any sitewide employee-recruiting services."
That is another key difference separating edX from Coursera, which counts those third-party deals as part of the revenue generated by the courses. Daphne Koller, one of Coursera's founders, said that all profits associated with a course on that platform "are shared back with the university that provided the course."
EdX has a deal with Pearson VUE, a company that runs a worldwide network of testing centers, to hold proctored examinations for its MOOCs. Although edX does not charge for the certificates that successful students receive for passing those proctored exams, Mr. Agarwal said it may do so in the future. The edX president said the organization is also considering referring students to related books in exchange for a cut from publishers, as well as operating as a headhunter for employers—avenues that Coursera is also exploring.
But in terms of generating the kind of revenue that edX would share with its university partners, Mr. Agarwal said the most likely strategy could involve licensing their MOOCs to other universities.
To test the licensing model, San Jose State University last fall used an edX MOOC, "Circuits & Electronics," as the basis for a "blended" online course offered to 85 tuition-paying students on its campus.
The early results were encouraging. The semester before the edX pilot, 60 percent of students passed the San Jose State course; 91 percent passed the edX-infused version.
EdX did not charge San Jose State for the pilot, and Mr. Agarwal said there is no pricing model yet for licensing the courses. But if the San Jose State experiment becomes the basis for a key revenue stream for the organization, the edX courses that generate revenue will do so in closed classrooms with limited enrollments and tuition-paying students.

Friday, February 15, 2013

Education Secretary Outlines Grim Consequences of Looming Budget Cuts - Government - The Chronicle of Higher Education

Education Secretary Outlines Grim Consequences of Looming Budget Cuts - Government - The Chronicle of Higher Education

By Kelly Field
Washington
Looming budget cuts would end financial aid for thousands of students and force the U.S. Department of Education to slice payments to contractors that administer the federal student-aid programs, Secretary of Education Arne Duncan told members of Congress on Thursday.

In a hearing before the Senate Appropriations Committee, Mr. Duncan said that "sequestration"—the across-the-board spending cuts that are scheduled to take effect on March 1—would slash Federal Work Study and Supplemental Educational Opportunity Grants by $49-million and $37-million, respectively, resulting in 33,000 fewer work-study awards and 71,000 fewer supplemental grants. Pell Grants would be exempt from the cuts this year, but would be vulnerable in future years.

The process of sequestration could also compel the department to cut payments to nonprofit servicers of student loans, potentially forcing those agencies to lay off and furlough employees, or even close, he said. If that happened, it could disrupt loan-payment processing and hamper the department's ability to collect defaulted debt, he warned.

"If we do not collect on loans, fewer funds will be repaid to the Treasury, and our deficit will increase," he told lawmakers. "That is the opposite of what sequestration is supposed to achieve."

Samantha DeZur, a spokeswoman for the Education Finance Council, which represents the nonprofit servicers, said her group hoped the department would provide details on the potential cuts soon, so the servicers could "minimize the impact on borrowers as much as possible."

It is not entirely clear, however, why it would be necessary to cut payments to servicers under sequestration. According to the department's proposed budget for the 2013 fiscal year, the nonprofit-servicing program is expected to cost $331-million this year, $28-million less than the mandatory money provided for the program. Even if the program were cut by 5.3 percent, as provided under sequestration, it would still have a $9-million surplus. The department did not respond to a request for comment by press time.

Mr. Duncan said the cuts could also require the department to furlough its own employees, an outcome that could cause delays in the awarding of aid and "significantly harm the department's ability to prevent fraud, waste, and abuse in the very large, complex student-financial-assistance programs."

He called for replacing sequestration with "balanced budget reduction that includes revenues," and argued for "selective cuts" rather than "mindless across-the-board sequestration."

Thursday, February 14, 2013

It’s Our Interest: The Need to Reduce Student Loan Interest Rates - Campus Progress

It’s Our Interest: The Need to Reduce Student Loan Interest Rates - Campus Progress

Interest rates are at historic lows and everyone—homeowners, corporations, and even state and local governments—are refinancing their debts. Refinancing allows the borrower to replace his or her existing debt with a new loan with lower interest rates and better terms. This means that borrowers can lower their monthly payments, which frees up income for purchases and creates ripple effects throughout the entire economy. There is one critical group, however, that is getting left behind in the refinancing boom: students and families who take out loans to pay for higher education.
According to a recent Lumina Foundation poll, the majority of respondents without a certificate or degree beyond high school said that they would feel more secure in both their job and their financial future if they did have such education. Furthermore, the greater economic benefits of higher education include higher contributions to tax revenues due to higher rates of employment and wages, greater productivity, higher consumption, and reduced reliance on government financial support. And yet state governments are steadily disinvesting in public higher education. Rather than cutting their costs, colleges have responded to smaller public investments by increasing tuition, which shifts a larger percentage of the burden of college costs directly to students and families. Due to both marketing by lenders and the limitations of federal financial aid, many students have even taken on private loans, which can bear interest rates twice as high as federal loans.
Student loan debt now amounts to $1 trillion, $864 billion of which is backed by the federal government. The majority of federally backed student debt is at an interest rate higher than 6 percent, with more than three-fourths being at an interest rate above 4 percent. These rates are double or triple the less than 2 percent rate of government debt. The higher disparity between these two rates has resulted in increased revenue for the federal government and can add up to tens of thousands of dollars of additional costs to the average borrower.
Unfortunately, an increasing percentage of borrowers are failing to keep up with the repayment of their loans. More than 13 percent of students whose loans came due in 2009 defaulted on that debt within three years as a result of long-term failure to make payments. Another 26 percent of borrowers at five of the major loan-guaranty agencies became delinquent on their loans—one stop short of default.
It is in the nation’s best economic interest to ensure that students are able to make timely payments on their loans, and it’s time for federal policymakers to take action. We should enact meaningful reforms that include an interest-rate reduction and that provide a way for private-loan borrowers to consolidate their debt into the federal student loan program or otherwise modify the terms of their loans.
Refinancing is a pragmatic solution to the problem of mounting student debt in this country. Reduced student loan costs boost the likelihood of repayment while also stimulating the economy by freeing up income that can be used and spent in other sectors of the economy. Refinancing even just those federal student loans with an interest rate above 5 percent would result in a savings of $14 billion for individual borrowers in 2013 and pump $21 billion into the economy in the first year alone. (see Methodology)
Even though interest rates on government debt are remarkably low—currently 1.97 percent—interest rates on unsubsidized federal student loans are set by Congress through legislation. They remain stagnant at 6.8 percent.
It’s possible that the future will bring policies that decrease college costs and tighten government regulation of private lending. But those policies won’t help recent graduates who have already assumed too much debt to pay tuitions that are too high. Lowering interest rates on existing loans would help everyone—from the borrowers to all Americans, who would benefit from a boost to the economy.
The goal of these initial American Progress-Campus Progress products will be to start the conversation about how to lower student loan interest rates. There are a variety of different mechanisms for doing so, as well as corresponding variances in size and scope of a potential program. We will continue to put out products, conduct briefings, and hold meetings to call on a variety of sectors—from nonprofit organizations and for-profit institutions to the executive branch and Congress—to submit their own plans and suggestions for refinancing student loan interest rates. The following is a brief overview of some of the issues our products will address.

An opportunity for reform

From managing soaring tuition costs to streamlining federal student aid, the postsecondary education system in the United States needs reform. The current system does not work for the many Americans looking for access to and success in higher education. Middle-class families are frustrated by the increasing cost of college and the rising need to take out loans to finance a higher education. These problems need to be addressed both for future generations of Americans and for those students and families who have already been burdened with significant debt.
We must engage and provide relief to the 37 million borrowers who collectively owe more than $1 trillion in student debt. These borrowers are primarily over the age of 30, and 15 percent are over age of 50. Engaging this group on the issue of student loan debt provides us with an opening to achieve the critical mass of public engagement that will be necessary to enact further reforms of the higher-education system and address its rising costs.
A federally backed refinancing and loan-modification program would reduce the interest rates paid by borrowers, provide new options and protections to borrowers in the private-lending sector, and stimulate the economy. It would also provide direct relief to the tens of millions of current borrowers, engaging them in the effort to improve our higher-education system.
Right now, a 10-year Treasury bond has an interest rate of 1.97 percent. Most borrowers, however, are locked into interest rates more than three times higher. The federal government is generating significant revenue from existing loans rather than passing on a portion of those record-low rates to students and their families. According to the Congressional Budget Office, federal student loan subsidy estimates for fiscal year 2013 equal $35.5 billion in revenue. The same report estimates that the 2013 administrative costs for managing the loans are $1.7 billion, which would still result in a net revenue of $33.8 billion. The purpose of student loans should be to increase access to postsecondary education and invest in future economic growth—not to generate federal revenue.
There are a variety of ways to structure a refinance and loan-modification program that impact both scope and cost. The focus, however, should remain on easing the burden of educational debt repayment by shifting some of the billions of dollars that the government generates in revenue back to the individual borrowers.
Furthermore, lowering interest rates would reduce the amount of money borrowers spend each month on debt and would allow them to spend it elsewhere, which would help immediately stimulate the economy. Borrowers could, for example, purchase a home, a car, or products to meet their everyday needs. Additionally, lower interest rates going forward would help alleviate Americans’ concerns about their long-term financial stability when faced with the cost of higher education.
Not only would a federally backed refinance and modification program be a positive move for the economy and individual borrowers, but it would also strengthen a program whose primary purposes are to provide low-interest education loans to anyone who meets the basic criteria and to increase access to education, which allows people the opportunity to move up the economic ladder. Any student loan refinance and modification program would need to provide protections for borrowers, to guarantee lower interest rates, and to stimulate the economy.
As outlined below, the cost of such a program would vary significantly depending upon its exact structure. Previous estimates indicate that a swap of private loans for federally backed loans would generate billions of dollars of revenue for the federal government. Other models could blend private and public investment, which would allow the federal government to operate it at a low cost. Ultimately, though, the Congressional Budget Office will need to score various models and proposals for firmer cost projections.

Federal loans

The majority of student loans are federally backed loans. At the end of 2011, there were 35 million borrowers, approximately $364 billion in outstanding Federal Family Education Loans, or FFEL loans—loans that were guaranteed by the federal government but issued by private lenders—and $342 billion in outstanding Direct loans—loans that were issued directly by the federal government.
FFEL loans are no longer being issued and are now offered more efficiently as Direct loans. A significant amount of them, however, still exist at a range of interest rates. Interest rates for Direct loans could be directly lowered, but thanks to existing agreements between FFEL leaders and the federal government, the cost of a FFEL refinancing program could be borne by both the private lenders who hold the existing loans and the federal government. The exact ratio of payments and the net costs would depend entirely on the specifics of the refinancing mechanism.

Mechanisms for refinancing FFEL loans

FFEL loans could be refinanced in two ways:
  • Directly swapping FFEL loans for Direct loans
  • Providing a fund or incentive for FFEL lenders to refinance loans while retaining them in the FFEL market
Various models of swapping FFEL loans for Direct loans could in fact generate revenue for the federal government or be cost neutral. The entire federal loan system switched from FFEL loans to Direct loans because the latter are less expensive; it is also less expensive for the federal government to convert FFEL loans into Direct loans. Unlike FFEL loans, Direct loans are not issued by private lenders. The ultimate cost of the program would of course depend upon what new interest rates the loans acquired, but switching loan types would merely hasten the already inevitable end of the FFEL program.
On the other hand, the federal government could keep FFEL loans intact while still reducing interest rates by using a fund or incentives. This model by itself, however, would not pass along the better protections afforded to borrowers with Direct loans, and it would not generate the same levels of direct revenue for the federal government. The reason it still deserves some consideration is that it avoids some secondary consequences of a complete swap and could be designed with a similar structure to certain private student loan refinancing models. This could make it easier for a program for private loans and a program for FFEL loans to move in tandem.
One example of how such a loan-transfer mechanism could work in practice is the Ensuring Continued Access to Student Loans Act, which Congress enacted in 2008 in order to introduce liquidity into a secondary FFEL private-securities market. At that time student loans were still being made through private lenders. Because of the economic climate, however, lenders were running out of capital with which to make new loans. Due to that concern, the legislation was passed, allowing the federal government to purchase loan securities and ensuring the continued availability of student loans. The program expired in 2010, at which point the Department of Education had purchased more than $100 billion of student loan securities.
Between the act and its Direct loan program, the federal government ended up financing about 88 percent (by dollar volume) of the federal student loans made during the 2008-09 academic year. These loans were purchased at high reimbursement rates exceeding 95 percent and were therefore very desirable to the lenders. Furthermore, the Congressional Budget Office stated:
[The law’s] effect on the federal budget has been to lower the cost of the student loan programs. Purchasing guaranteed loans allows the Department of Education to avoid some of the payments it would have made to FFEL lenders. Once the loans are purchased, payments from the government to FFEL lenders cease, and the loans are serviced and administered by the department’s contractors. Thus, the purchased loans have the same costs as direct student loans.
While these loans did not result in any increased costs to the Department of Education, the reimbursement rates were likely significantly higher than they would have been if they had been purchased in the private market. Future use of a similar mechanism could be more efficiently priced to result in net savings for the federal government rather than simply being cost neutral.
One example of a loan consolidation and refinancing program is the Health Care and Education Reconciliation Act, which was passed in 2010 and expired in 2011. Under the Health Care and Education Reconciliation Act, eligible FFEL loans could be consolidated into Direct loans. This temporary program provided borrowers the opportunity to simplify their loan repayment process. The program reduced interest rates on the total consolidated FFEL loan and Direct loan balance to 0.25 percent.
The Federal Reserve provides another example of the purchase of both FFEL loans and private student loan securities. In November 2008 the Federal Reserve announced the creation of the Term Asset-Backed Securities Loan Facility under the Federal Reserve Act. The program was intended to improve economic and market conditions by purchasing asset-backed securities. Originally, there were four categories of asset-backed securities that qualified, one being student loans. The program was closed on March 31, 2010, and all loans that the program extended will expire no later than March 30, 2015.

Private loans

Private student loans account for between $150 billion and $200 billion of outstanding student debt and 2.9 million borrowers. These loans tend to be the most egregiously harmful to borrowers, as they often have high variable rates and poor customer support. A study conducted by the Consumer Financial Protection Bureau found that interest rates for private student loans varied widely—from 2.98 percent to 19 percent.
Moreover, borrowers frequently submit complaints concerning customer support. The study cited borrowers who noted “challenging repayment experiences,” in addition to other negative experiences with private student loan providers. The Consumer Financial Protection Bureau concluded that there are significant “opportunities to improve customer satisfaction and reduce customer harm among some borrower segments.”
A subset of these private loans—the ones that have the highest interest rates and are made to the highest-risk borrowers—have a disproportionate drag on the economy, as these borrowers often become unable to make payments and thus find their loan amounts skyrocketing even further.

Mechanisms for refinancing and modifying private student loans

Turning private loans into Direct loans
One option is to simply swap all private student loans for Direct loans. A version of this mechanism has been proposed previously by Sen. Sherrod Brown (D-OH) as part of the Private Student Loan Debt Swap Act of 2009. The proposal would require that private education loans be exchanged for Direct loans for borrowers who were eligible for unsubsidized Stafford Loans under the FFEL program after July 1, 1994, or were eligible for PLUS loans for graduate or professional education after July 1, 2006.
There are many benefits of using this mechanism. First, it would give existing borrowers immediate access to the critical federal protections that do not exist for private student loan borrowers. They could, for example, gain access to Pay As You Earn—a plan that took effect in December 2012 and seeks to cap monthly payments for eligible loans at affordable amounts.
Depending on the exact interest rate, this mechanism could be low cost or even generate revenue for the federal government. The Congressional Budget Office scored Sen. Brown’s bill as generating nearly $10 billion in revenue for the government.
There are some challenges, however, that go along with this mechanism. It could, for example, result in a significant influx of a variety of different loans into the Direct loan program. As a result, the legislation would need to ensure that there are sufficient resources, staff, and processes in place at the Department of Education to handle the increased loan portfolios. The program would need to be structured in a way that would avoid a pure bailout of the private student loan industry and provide individual borrowers protections against abusive lending practices in the future. Pricing the loan purchases correctly would also be important. We address this issue in more depth in the decision points section of this document.
Another challenge for this mechanism: If the option to enroll in such a program were left to the individual borrowers, lending institutions would heavily market the refinance option to high-risk borrowers. If the lending institutions decided participation, they would offload the highest-risk borrowers and retain the lower-risk borrowers in order to maximize profits. This would result in the refinance program costing significantly more money for the federal government to administer.
Using a federally backed fund
Another option to refinance and modify private student loans is to use a federally backed fund to provide new incentives for private loan borrowers to refinance their loans. The federal government could do this by providing initial seed capital to create the fund or by providing specific lines of credit for a private entity to create a refinance fund. These funds could then be used to refinance a smaller number of eligible private loans. Furthermore, if enrollment in the federally backed fund were optional to the individual borrowers, then lending entities would be incentivized to provide refinancing options of their own to their lower-risk borrowers. This allows the capital investment to be leveraged to have a broader impact on the market.
Conversely, if the enrollment criteria were decided at the institutional level or based upon security purchases, the refinancing fund could potentially be started using a combination of both federal and private resources. The benefit of using a fund is that it could ensure that numerous parties, including private entities, still share the risks for loans they issued because they would have to invest some capital in the outcome of the loans.
Using a federally backed fund, however, has its share of challenges. It would need to be structured to ensure that those in greatest need of assistance are not ignored by a pool or program. And the fund could require a certain blend of risk, for example, in the makeup of refinanced loans. Another option would be to make specific funds that are only eligible to certain income groups. It would also create a new category of hybrid loans that would need to be regulated akin to new regulations on private loans. These loans would be the first to be partially owned by both the federal government and a private entity at the securities level, as Federal Family Education Loans, for example, were simply guaranteed by the federal government.
Regardless of the mechanism, however—whether it is implemented through new congressional action or through executive action based upon existing authority—upon its implementation it is important for the refinancing mechanism to be paired with new regulations for the private lenders who are marketing education loans. This would help prevent a similar dramatic increase in defaults and interest rates for a large set of borrowers from occurring in the future. These protections might include new bankruptcy rules, loan-certification requirements, a universal Pay As You Earn (formerly known as income-based repayment) repayment system, and automatic enrollment in Pay As You Earn.

Decision points

One benefit of a federally backed student loan refinancing and modification program—whether by turning private loans or FFEL loans into Direct loans or by creating a federally backed fund—is that it is relatively simple to grasp—many Americans are familiar with similar mortgage-refinancing programs. There are many viable options for designing the size, scope, and mechanism of a federally backed refinancing program. Below are some of the overarching questions that need further discussion.
  • What should the mechanism be for refinancing or modifying student loans? As explored throughout this issue brief, there are many options. All of these options, along with new ones, should be debated and proposed in the coming months in order to determine the best path forward.
  • What interest rate should be the refinance rate? One key decision is where to set the new interest rate. The lower the rate, the more the proposal will cost. There are several tipping points, however, because it is not an even distribution, as shown in Figure 2.
  • What would the impact of the refinance interest rate be on loans going forward? The interest rate on subsidized Stafford loans is set to double to 6.8 percent in 2013. Proposals are needed to determine a long-term system for setting interest rates that ensures the continued subsidization of college for America’s students. This question also brings up the need for additional reform of the federal financial aid system going forward, even as a refinance and modification program attempts to make improvements on past loans.
  • What should be the size of the program? As outlined above, there are a variety of options for using a pool approach or a larger change. Therefore the program could be set at any size from a $1 billion pool to a $100 billion swap. The broader secondary impacts of such decisions—such as the economic impact and market impact—needs to be further explored.
  • When dealing with FFEL and private loan purchases, how should loan portfolios be valued? Previous purchases of private loan securities—from the Ensuring Continued Access to Student Loans Act, to the Term Asset-Backed Securities Loan Facility, to the Health Care and Education Reconciliation Act—all handled and valued the private loans differently. This formula would be highly important for ensuring the most efficient usage of federal resources.
  • How long should the program last? Some elements of the program could be short term, but it would be possible to put in place some elements of a program that lasted indefinitely. There could also be options for an extended period of time for refinancing. This is particularly important if the program has any opt-in elements.
  • How can the proposal be structured to maximize its potential as economic stimulus? The savings to the consumer will be spread out over the life of the loan. Due to the current economic climate, however, it may be beneficial to concentrate more of the benefits in the short term via a loan holiday or a similar program. Since loan payments tend to take place over such a long period of time, rather than evenly reducing payments as the result of a refinance, it would be possible to frontload the savings and therefore increase the immediate stimulus even if the net impact remains the same.
  • What kinds of loans should be refinanced? Many types of loans should be refinanced, including FFEL loans, Direct loans, private student loans, and loans such as Stafford or PLUS loans.
  • Should there be a cap on the income of those eligible to participate in the program? One way to limit the size of the program is to target it to those who are most in need of assistance.
  • What new protections should be put in place? As outlined throughout this issue brief, new protections clearly would be needed as part of a refinance and modification program. The best package of options would need to be paired with the specific refinance scope and mechanism.
There are additional decision points regarding mechanisms; impacts on the loans market; secondary impacts on the economy; the scope and scale of existing borrowers to include in a federally backed refinancing and modification program; consumer protections; the capacity of the Department of Education to handle an increased volume of loans; and more, which will explore in the coming months. These questions do not change the underlying concept of passing along the current low interest rates to the tens of millions of Americans struggling with student debt. This would not only help them but it would stimulate the economy as well.

Conclusion

Borrowers need relief, and reductions in their monthly loan payments will boost the entire economy. While there are a variety of different ways to structure a student loan refinance and modification program, the end result must be the same: Any student loan refinance and modification program would need to provide protections for borrowers, guarantee lower interest rates, and stimulate the economy. As we move forward with improving the educational system for those currently or about to enroll in higher education, it is important to not leave behind the tens of millions of Americans who still possess student debt.
We will be issuing additional products in the coming months as part of our efforts around the “It’s Our Interest” campaign, through which we hope to provide a platform and opportunities for the numerous stakeholders—from nonprofits and businesses to Congress and the federal government—to submit their own opinions and plans for how to best deal with student loan debt.

Obama's Accreditation Proposals Surprise Higher-Education Leaders

Obama's Accreditation Proposals Surprise Higher-Education Leaders - Government - The Chronicle of Higher Education


President Obama didn't mention accreditation in his State of the Union address on Tuesday evening. But in a supplemental document released after the speech, the president made it clear that he is seeking major changes in the accountability system for higher education.
In the middle of the nine-page document, "The President's Plan for a Strong Middle Class and a Strong America," Mr. Obama laid out his broad intent to hold "colleges accountable for cost, value, and quality," including a call to set benchmarks for affordability and student outcomes as criteria for receiving federal student financial aid. Regional and national accreditors are now the primary gatekeepers for access to those dollars.
New benchmarks could be incorporated "into the existing accreditation system," the plan states, or created "by establishing a new, alternative system of accreditation that would provide pathways for higher-education models and colleges to receive federal student aid based on performance and results."
Accreditors and other higher-education experts said a direct reference to accreditation by a sitting president was rare. But being on the president's radar isn't necessarily viewed as a positive by accreditors and colleges, which could be in for even greater federal scrutiny.
Judith S. Eaton, president of the Council for Higher Education Accreditation, which represents some 3,000 accredited colleges and more than 60 accrediting organizations, said the president's proposals to overhaul accreditation or create a new system were completely unexpected. "I was, at first, startled," she said. "How did accreditation make it into the supplemental materials for the State of the Union?"
President Obama is not, however, the first to suggest that the next reauthorization of the Higher Education Act could include significant reform of accreditation, Ms. Eaton said. Earlier this year, when a federal panel recommended some middling changes in the accreditation system, a minority of that panel proposed more-sweeping reforms, including separating the accreditation process from eligibility for federal student aid.
A new pathway to accreditation might be based on more consumer-friendly information, such as graduation rates, job placements, and salaries, Ms. Eaton said, but it wouldn't necessarily deal with core issues of academic quality that employers are also concerned about, such as critical-thinking skills.
"What this means for accreditation, we don't really know," Ms. Eaton said of the president's plan, "but a new system of accreditation that is government-run is a concern."

Efforts Already Under Way

For their part, accreditors say they are already responding to accountability concerns and providing pathways for alternative approaches.
The administration's concerns "do align in a number of ways with recent revisions in our standards and processes," said Sylvia Manning, president of the Higher Learning Commission of the North Central Association of Colleges and Schools, which oversees postsecondary institutions in 19 states. For example, the Higher Learning Commission has increased its standards for assessing student learning and more explicitly requires colleges to have a plan for improving student-retention and graduation rates, Ms. Manning wrote in an e-mail.
In addition, the commission now annually requires the institutions it accredits to provide data on the student-loan-default rates of their students, she wrote. "And we are going to start making accreditation results more easily available and more meaningful to the public."
Accreditors also say they are responding to the rapid growth of massive open online courses and the movement toward awarding academic credit based solely on student assessment—sometimes referred to as competency-based education—rather than the traditional measure of seat time a student spends in a course.
The Northeast Commission on Higher Education, for example, recently approved Southern New Hampshire University's plan to award credit based on competencies demonstrated through tasks meant to simulate “real world” workplace requirements like critical thinking, quantitative reasoning, and writing and speech skills, said Paul LeBlanc, the university’s president. The plan is under way, and the university is awaiting final approval from the U.S. Department of Education to award federal student aid for the students  in the program.
"In our region, we have taken a look ... to see if we feel we are prepared to deal with competency-based assessment and feel that, at least for the moment, we are," said Belle S. Wheelan, president of another regional accrediting organization, the Southern Association of Colleges and Schools.
And accreditors point out that the Education Department has not been entirely helpful in fostering innovations such as "direct assessment" in higher education, for example by not better promoting the option to develop competency-based programs.
While some in the Education Department have called for more widespread acceptance of competency-based programs and flexibility for accreditors, the department's inspector general issued a trio of reports in 2009 that reinforced mainstream approaches by faulting regional accreditors for failing to set minimum standards for program length or credit hours. The inspector general recommended that the department penalize the Higher Learning Commission of the North Central Association of Colleges and Schools. That has made some accrediting agencies more cautious about what innovations they are willing to pursue.
Still, if the federal government wants accreditation that is suited to the changing educational environment, the existing organizations are still better equipped than the Education Department is to monitor academic quality, said Ms. Manning.
"As to an alternative system, it's worth noting that the current system has been responsive to changes and innovations," Ms. Manning wrote, "and is conducted at much lower cost to anyone than a government agency could do."
Correction (2/14/13, 11:41 a.m.): This article originally said that Southern New Hampshire University's plan to award credit was based on competencies demonstrated through tests, portfolios, clinical observations, and other assessments. In fact, the students must demonstrate proficiency through tasks meant to simulate workplace requirements like critical thinking, quantitative reasoning, and writing and speech skills. The article also stated that the university was awaiting final approval from the U.S. Department of Education to carry out its plan, but the plan is in fact under way. The university awaits the department's approval to award federal student aid for the students in the program. The article has been corrected to reflect those points.

Tuesday, February 12, 2013

Group Floats 3 Options for Financing Public Higher Education

Read original article at The Chronicle of Higher Education

February 12, 2013, 2:53 pm
A tax on financial transactions, a return to 2000-1 levels of state support, and a reallocation of existing money to offer free tuition were three ideas proposed on Tuesday in a news briefing as ways to finance America’s system of public higher education.
The Campaign for the Future of Higher Education, a two-year-old coalition of faculty groups, organized the briefing to stimulate a national conversation on using public dollars to pay for college and preserve access for the children of middle-class families. During the briefing, three scholars summarized their working papers on financing higher education and answered questions about their proposals.
“The public has demonstrated that they really care about higher education,” said Stanton A. Glantz, a professor of medicine at the University of California at San Francisco, who was among the papers’ authors. “The public has kind of voted with their pocketbooks that this is a high priority. The problem is that over the last 15 or 20 years we’ve shifted the burden of paying for education away from the society as a whole, as an investment in society’s future, and shifted it more and more to a private good where students and their families have to go hopelessly into debt to get it.”
In his paper, Rudy H. Fichtenbaum, president of the American Association of University Professors and a professor of economics at Wright State University, suggested imposing a tax on speculative financial transactions like stocks, bonds, and futures.
According to Mr. Fichtenbaum, the United States had a financial-transactions tax from 1914 to 1966, and countries including Britain, Colombia, France, and Taiwan have one now. The sheer volume of financial transactions means that a tax on them could be quite low—half a percent or less—and still generate $265-billion to $354-billion per year, he estimated. A study published by the Center for Economic and Policy Research estimated minimum potential revenue at $176.9-billion, Mr. Fichtenbaum said. That study found that a tax might reduce trading volume by as much as a quarter.
The bipartisan Joint Committee on Taxation has estimated much more conservative returns on the tax, $352-billion over 10 years, according to an article this month in The New York Times. The article, by ProPublica’s Jesse Eisinger, stated that Sen. Tom Harkin of Iowa and Rep. Peter DeFazio of Oregon, both Democrats, planned to reintroduce legislation calling for a financial-transactions tax.
Mr. Fichtenbaum noted that, in the 2012 fiscal year, the states cumulatively spent about $72.5-billion on public higher education. He proposed that $28-billion of the revenue from the proposed tax be used to cut tuition to ensure that college remains affordable for families. Next he would increase instructional spending by $47-billion to improve student advising and hire more tenure-track faculty members.
“A modest tax on financial transactions, a tax that would primarily affect wealthy speculators, many of whom have benefited from the government bailout of Wall Street banks during the Great Recession, would be an important piece of adequate funding for public higher education,” Mr. Fichtenbaum wrote in his paper.
Bob Samuels, president of the University Council-American Federation of Teachers and a lecturer at the University of California at Los Angeles, proposed making public college free by reallocating existing federal and state expenditures on higher education and doing away with regressive tax breaks.
Citing a Chronicle article, Mr. Samuels noted that the federal government spent $35-billion on Pell Grants and $104-billion on student loans in 2010. That same year the states spent $10-billion on financial aid and $80-billion on direct support of public higher education.
Mr. Samuels argued that the existing financial-aid system “drives up college costs as institutions increase tuition to chase publicly funded student-aid money and to provide set-aside moneys for their own student-aid programs.” As an alternative, he suggested eliminating the financial-aid system and directly allocating money to cover the total costs of each student. In addition, he said, eliminating student loans and their accompanying costs would save billions of dollars.
He criticized the existing system of education tax deductions and credits as “a tremendous subsidy for upper-middle-class and wealthy families” that forces lower-income students to take out hefty education loans. Direct financing of public higher education would be far more efficient, he said, citing another Chronicle article that showed that the federal government lost $40-billion in 2010 that could have gone directly to higher education.
A third paper, which looked at California as a test case, proposed hitting a “reset” button on higher-education financing to return to the levels of support that existed 12 years ago, “when higher education was more adequately funded, tuition was low, and students were able to work their way through school with little or no debt.” The report calculated the cost to either taxpayers or students of reopening California colleges and universities to students who have been excluded by recent budget cuts.
Mr. Glantz, the medical professor and vice president of UC Faculty Associations, wrote the paper with Eric Hays, executive director of the faculty group.
Restoring educational access and quality while rolling back student fees to 2000-1 levels would cost California taxpayers $6.4-billion, or about $48 apiece for the median taxpayer, the authors estimated. Without such an increase, they said, University of California students would have to pay an additional $10,491 (for a total of $23,721 per year), California State University students would pay an extra $2,470 (a total of $8,989), and community-college students’ fees would remain unchanged.

More employees entitled to family and medical leave under FMLA

More employees entitled to family and medical leave under FMLA

On February 6, 2013, the U.S. Department of Labor (DOL) published new regulations implementing amendments made to the Family and Medical Leave Act (FMLA).   These changes entitle employees with family members serving in the military and airline employees to leave under the FMLA.  The regulations become effective on March 8, 2013.
Eligible employees with covered family members serving in the military will be able to take two special types of leave: (1) military caregiver leave and (2) qualifying exigency leave.  Military caregiver leave allows employees an extended period of FMLA leave to care for a family member who is a current servicemember with a serious injury or illness incurred in the line of duty.  Qualifying exigency leave allows an employee whose spouse, child, or parent is called up for active duty in the National Guard or Reserves to take FMLA leave for certain related exigencies.  Additional information on the military family leave entitlements can be found in Fact Sheet 28A: The Family and Medical Leave Act Military Leave Entitlements at www.dol.gov/whd/fmla.
Airline employees will also be able to take advantage of  protected leave under the FMLA.  The new regulations address a loophole in the FMLA “hours of service” requirements for pilots and flight attendants whose unconventional work schedules did not permit them to meet the hours requirement. The new regulations clarify that the hours that count toward the requirement are hours pilots or flight attendants work, or for which they are paid—not just those spent in actual flight.

Thursday, February 7, 2013

For Making the Most of College, It's Still Location, Location, Location - Administration - The Chronicle of Higher Education

The Chronicle of Higher Education

February 4, 2013
For Making the Most of College, It's Still Location, Location, Location
Matt Roth for The ChronicleThe library, like this one at Goucher College, is said to be one of the few places where people go to be alone in public.
By Scott Carlson
In late December, a set of articles and essays in The New York Times focused on the public library as a place, and on the changing meaning of that place with the rise of electronic books and the demise of brick-and-mortar bookstores like Borders.

As librarians "struggle with the task of redefining their roles and responsibilities in a digital age," said the lead article, their libraries are "reinventing themselves as vibrant town squares, showcasing the latest best sellers, lending Kindles loaded with e-books, and offering grass-roots technology-training centers." A related commentary prodded readers with a provocative question: "Do We Still Need Libraries?"

For me it was déjà vu. Back in 2001, I wrote an article in The Chronicle, "The Deserted Library," which reported that libraries would change in the face of the Internet and electronic materials. Some people, like Mark C. Taylor, a professor of religion at Columbia University, predicted an inevitable decline of the physical library with the advent of the Internet. My own conclusion, and what I reinforced in follow-up pieces, was that while deserted libraries tended to be outdated, unimaginative, and sterile places, the libraries that stayed vibrant—and busier than ever—were the ones that found ways to appeal to people's sensibilities and needs (including caffeine).

And they continue to be. I write many of my Chronicle stories from a seat in Goucher College's new library, and it is buzzing, even in the middle of the day. People, especially young people, want to be around other people, even if they don't want to interact. The library, as someone once put it, is one of few places you can go to be alone in public.

A Reckoning?
This conversation about place versus the Internet continues, but now it has grown to encompass the fate of the college campus itself. Online learning and MOOCs have arrived, the argument goes, so place doesn't matter. The campus will become a relic, bound for desertion, like the ruins of Ozymandias. Many of these predictions come with barely concealed indignation over the college building boom of the past 15 years. Pundits see a reckoning for the luxurious climbing-wall colleges—"Disneyland for Geeks," as Nathan Harden, in the latest issue of The American Interest, calls it.

Within the next 50 years, Mr. Harden declares in his essay, half of American colleges will succumb to mounting financial pressures and shut down. The problem is not student debt or a flaccid hiring market, he argues. Big changes are coming because "the college classroom is about to go virtual."

"Recent history shows us that the Internet is a great destroyer of any traditional business that relies on the sale of information," he continues. "Nostalgia won't stop the unsentimental beast of progress from wreaking havoc on old ways of doing things. If a faster, cheaper way of sharing information emerges, history shows us that it will quickly supplant what came before. People will not continue to pay tens of thousands of dollars for what technology allows them to get for free."

I'm not buying it—at least not the way that Mr. Harden lays it out. Online classes will surely play some role in supplanting some classroom teaching—they already do. And certainly colleges face challenges—like burdensome debt and deferred maintenance—that may hobble or kill off a number of them. In the next 50 years, we could see major geopolitical, environmental, or socioeconomic mayhem, which could push weak colleges over the cliff.

But will campuses and traditional teaching disappear because we now have MOOCs? No, because that defies the human yearning for meaningful places and the real benefits that come with them. We see it in the migration to cities and in walkable neighborhoods. We see it most of all on college campuses.

'Place Is Everything'
Such yearning may sound nostalgic, which is how Mr. Harden characterizes it. But even evangelists of disruption acknowledge the intangible, serendipitous, and sometimes even uncomfortable educational opportunities that colleges offer by bringing different kinds of people together in one place.

Andrew Delbanco, a professor of humanities at Columbia and author of College: What It Was, Is, and Should Be, lauds the value of "lateral learning" between student peers who share a place. Mr. Harden, of all people, should understand this: Sex and God at Yale, his recent book about his experiences with promiscuity and political correctness on that campus, is a memoir made possible by being there.

"I think place is everything, and that's not to say that virtual learning can't enhance place," says Jonathan Brand, president of Cornell College, in Iowa. "You see how much students learn from each other sitting in the classroom, how much they learn sitting together in the dining hall—more than from their professor. It's hard to imagine replicating that virtually."

Look around, and you see the way people value place in education, even where you might not expect it. Goddard College did away with its traditional campus program and now offers low-residency programs mostly for adults, who spend only a week per semester on the campus. But those students regard the campus experience as a sacred time, when long walks and late nights on the old Vermont estate yield new ideas and new connections.

The so-called digital natives, who are too young for nostalgia, get it: Last fall, at a sustainability conference, a prominent environmental entrepreneur presented her vision for virtual classes designed to replace face-to-face classes. Undergraduates in the audience lined up at the microphones to tell her it was a bad idea, because they valued place and what it offered.

Many of these in-person-versus-online comparisons have a classist streak, as my colleague Goldie Blumenstyk and I discussed in a Chronicle essay in December. Mr. Harden, while briefly acknowledging that the virtualized classroom "can never duplicate the experience of the student with the good fortune to get into Yale," says it provides the wisdom of the Ivy League to "anyone who can access the Internet—at a public library, for instance—no matter how poor or disadvantaged or isolated or uneducated he or she may be."

He draws a simile: "Online education is like using online dating Web sites—15 years ago it was considered a poor substitute for the real thing, even creepy; now it's ubiquitous." Perhaps it's more like online sex—missing out on the intimacy, but offering something to those who have fewer options.

Local Geography
Take a lesson from recent history: Just as with libraries, campuses that are dismal, disconnected, and underutilized as places will suffer, while the ones that are vital will have a shot at succeeding. Colleges will need to find ways—preferably creative and inexpensive—to make their places relevant: Link to local communities. Use those communities as places where students can apply their education to fix problems or enhance strengths. Find the unique characteristics of the local geography, and incorporate them into lessons. Provide spaces where students can connect both intellectually and physically with one another, and with their college work.

People who predicted the death of the library made the mistake of thinking that libraries were merely useful for information distribution—an understandable error, given that libraries' central role involved passing around books and journals. But pundits now make the same mistake when thinking about the college campus. If college were merely about the "sale of information," the enterprise would have gone the way of Borders a long time ago.

American Council on Education Recommends 5 MOOCs for Credit - Technology - The Chronicle of Higher Education

Read original article at The Chronicle of Higher Education

In what could be a major step toward bridging the gap between massive open online courses and the credentialing system that they are supposed to "disrupt," the American Council on Education on Thursday endorsed five MOOCs for credit.
Two of the approved courses, "Introduction to Genetics and Evolution" and "Bioelectricity: A Quantitative Approach," come from Duke University. Two others, "Pre-Calculus" and "Algebra," come from the University of California at Irvine. The last, "Calculus: Single-Variable," comes from the University of Pennsylvania. All five are offered through Coursera.
The council, an association that advises college presidents, operates a credit-recommendation service that evaluates individual courses. If a course passes muster, ACE advises its 1,800 member colleges that they can be comfortable conferring credit on students who have passed that course.
Whether colleges take the council's advice, however, is an open question. "Ultimately, the degree-granting institution decides what credits to accept," said Cathy A. Sandeen, the council's vice president for education attainment and innovation.
In other words, the council's endorsement alone does not mean students can expect to save money by redeeming their Coursera certificates—evidence that they have passed its courses—for credit toward a traditional degree.
But if some colleges follow through, the council's recommendations could go a long way toward straightening the crooked path from free college courses to valuable college credits. Simplifying that process could make the economic significance of MOOCs more tangible.
"This could make it much easier for students to get credit for MOOCs, and they don't necessarily have to figure out the complicated, back-roads way of doing so," said Amy Laitinen, deputy director for higher education at the New America Foundation, a research organization in Washington. "Making it easier is a big step toward making it happen at scale."

What MOOCs Will Mean

Any hypothesis about how MOOCs might "disrupt" the American higher-education system inevitably will turn on the willingness of colleges to grant credit for courses for which students do not pay tuition. And when it comes to inviting free online courses into the world of mainstream credentialing, institutions might prefer to act conservatively for fear of undermining their own bases of revenue.
Andrew Ng, a co-founder of Coursera, said some of the company's university partners have been wary even of submitting their own MOOCs for consideration by the council's credit-recommendation service. "For students to receive credit, even if that credit is sponsored by a different institution—that's a big step," said Mr. Ng. "I think it's still so new that a lot of us are getting used to the implications and what this means."
ACE has positioned itself to lead the inquiry into what MOOCs will mean to higher education. The council has gotten funds from the Bill & Melinda Gates Foundation to study how the courses could be used to improve access and college completion, and it is currently reviewing courses from Udacity, another MOOC provider, for possible credit recommendations.
The approval of the first Coursera MOOCs is "an important first step in ACE's work to examine the long-term potential of MOOCs" to deal with issues such as "degree completion, increasing learning productivity, and deepening college curricula," said Molly Corbett Broad, the council's president, in a written statement.
But the second step, in which colleges begin accepting MOOC certificates for credit as if they were Advanced Placement scores, is equally important—and there is no guarantee that colleges will do so.

'A More Rigorous Process'

John Ebersole, president of Excelsior College, said his institution would not accept transfer credits from a Coursera MOOC, notwithstanding the council's recommendation.
Excelsior, a pioneer of "competency-based" learning, is sympathetic to the notion of granting credit for learning that occurs outside the traditional classroom. But Mr. Ebersole said he was not impressed by Coursera's assessment methods.
"We would hope that ACE would support a more rigorous process, as is the case with other forms of noncredit instruction, whereby those seeking credit would complete a psychometrically valid assessment in a secure testing facility," Mr. Ebersole said.
The council said it had confidence in its process for approving the courses for credit. Each course was reviewed by two independent faculty members, who looked at a number of aspects, including the tests and anticheating measures, which, in this case, involved a remote monitoring service called ProctorU.
"Our reviewers," said ACE's Ms. Sandeen, "found their controls and techniques to be sufficient."

Wednesday, February 6, 2013

Americans Value Higher Education but Question Its Quality, National Survey Finds - Students - The Chronicle of Higher Education

Read original article at The Chronicle of Higher Education

Americans overwhelmingly view a higher education as essential to landing a good job and achieving financial security, but they have doubts about its quality and affordability, according to a new report from the Lumina Foundation and Gallup.
They also favor changes in higher education that would make obtaining a degree more realistic for working adults. A majority of respondents to a survey underlying the report said they supported the awarding of credit for prior learning and skills acquired outside the classroom. Three-quarters, meanwhile, said that they would be more likely to enroll in college if they could receive credit for what they already knew.
"The demand for postsecondary education is as high or higher than it's ever been," said Brandon Busteed, executive director of Gallup Education, which conducted the survey. But civic and economic demands are driving more Americans to view higher education through a pragmatic, job-focused lens, he said. "They're asking for something very different from what we've done in the past."
The report, "America's Call for Higher Education Redesign," was released on Tuesday and is based on more than 1,000 interviews that Gallup researchers conducted in November and December 2012 on behalf of Lumina.
The findings suggest that Americans acknowledge the central role of postsecondary education in employment and financial stability—but hardly think the current model is perfect. Three-quarters said college is unaffordable. And more than half said the quality of higher education is the same as or worse than in the past.

Despite those concerns, the notion of earning a college degree appears to be powerful. Of those who do not have a college degree or certificate, more than four in 10 said they had thought about going back to college in the past year. More than one in five said they were "very likely" to do so.
Mr. Busteed said that enthusiasm could provide a critical boost to Lumina's college-completion agenda, which aims to restore the United States as the world leader in the proportion of adults who hold college degrees by 2025. Lumina's goal is for 60 percent of Americans to hold a "high-quality degree, certificate, or other credential." Currently, about 40 percent of American adults hold a two- or four-year degree.
Since the data set of those interviewed was statistically weighted to reflect the adult population of the United States, Mr. Busteed said, that means 55 million Americans said they had thought about going back to college. And 28 million are very likely to do it. About 23 million adults would need to earn college credentials to close the completion gap, he said.
But the quality of that education—and whether it results in a certificate or a degree that leads to employment—matters most. "A good job is now what Americans want out of college," Mr. Busteed said. "Not just a degree."

Calls for a Redesign

Several leaders in higher-education policy said the survey's findings should prod campus officials and policy makers to shed outdated notions of who students are, why they enroll in college, how to educate them, and how to assess what they've learned.
Breaking free of the credit hour, as currently defined, could liberate colleges to be innovative in delivering a quality education to students, suggested Paul J. LeBlanc, president of Southern New Hampshire University. Speaking during a panel discussion here following the report's release, he said that at his institution the creation of competency-based education has allowed for a more-direct determination of what students are learning. The approach, which has been approved by the university's regional accreditor, would allow students who pass a series of assessments to earn credits without attending classes.
For Michelle Asha Cooper, president of the Institute for Higher Education Policy, a successful redesign of higher education means focusing more—and meaningfully—on adult students' needs. The survey findings, she said, indicate that nearly all adults think higher education is important—but only a quarter think it's affordable, and more than a third say that family responsibilities are a barrier to re-enrollment. It's time, she said, to "think about education in a different way."
"We have refused to allow ourselves to think creatively and act creatively about what college can be for today's students," Ms. Cooper said. "The model that we're using is a model that is based in a traditional notion of higher education, and now, when we look at today's student body, over 75 percent of the student body is nontraditional."
Collaboration across sectors, strong partnerships between campuses and industry, meaningful engagement from civic leaders, and better communication with policy makers for elementary and secondary schools—all are necessary approaches to recast today's higher-education landscape in a way that will benefit students for generations to come, the experts said.
"We've got to think about how to create more opportunities for a large number of people at a very high-quality level," said Jamie P. Merisotis, Lumina's president and chief executive. "Because that's what society demands."