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EMERITUS NEWS EDUCATION
AMERICA'S WORST COLLEGESMore in this article in Washington Monthly, click here- 08/27/2010 "RACE TO THE TOP" GRANTS AWARDED / MOST SCHOOLS EAST OF MISSISSIPPI RIVERMore from the Emeritus Newsroom- Reaction to the Department of Education decision on those states winning the "Race to the Top" education grants includes criticism from civil rights advocates. Education Secretary Arne Duncan announced nine states and the District of Columbia will share most of the $3.4 billion dollars set aside for winning applications based on education reforms advocated in the grant program. Delaware and Tennessee had won earlier during an initial competition. Those states taking the second round were: Florida, Georgia, Hawaii, Maryland, Massachusetts, New York, North Carolina, Ohio, and Rhode Island, in addition to DC. Education Department officials say a total of 46 states and the District of Columbia put together comprehensive education reform plans to apply for Race to the Top in Phases 1 and 2. Over the course of the Race to the Top competition, 35 states and the District of Columbia have adopted rigorous common, college- and career-ready standards in reading and math, and 34 states have changed laws or policies to improve education. Opponents of the concept have said the grants only provide more to the "have" states while providing less to the "have not" states. Reacting to the announcement of the winning states, most from the east coast, California NAACP and other civil rights leaders claim the program undermines schools of the disadvantaged. Louis Freedburg of the blog, California Watch, points out, "Even if California were to be awarded funds in today's announcement, most children in most states will experience a real decrease in federal support when inflation and state and local budgets cuts are taken into consideration The document noted that the selection of two small states, Tennessee and Delaware, in the first round of the competition meant that Race to the Top currently impacts only 2.5 percent of the students in the United States eligible for free and reduced lunch, 3 percent of the nation's black students and less than 1 percent of Latino … students. What's extraordinary is that the joint statement represents by far the most vehement critique on President Obama from a constituency that, all things being equal, he should have been able to count on as among his strongest supporters. But in an indirect attack on the No Child Left Behind legacy of former President Bush, now being extended by Obama, they say:
An estimated $75 million dollars remains from the $3.4 billion program. So far, no indication as to how that money will be spent. Full text of Department of Education press release, click here. Video of announcement by Education Secretary Arne Duncan, click here. Blog post by Louis Freedberg of California Watch , click here. 08/24/2010 SCHOOLS STALL REHIRING TEACHERS DESPITE NEW $10 BILLION AID PACKAGEMore in this article from the New York Times, click here - 08/18/2010 FOR PROFIT COLLEGES TAKE HIT IN DEPARTMENT OF EDUCATION LOAN REPAYMENT REPORTMore from the Emeritus Newsroom- For profit colleges have the lowest student repayment rates according to a report released Friday from the U-S Department of Education. At 36% for profit college repayment rates are considerably lower than private colleges (56%) and public institutions (54%). some for profit colleges had repayment rates lower than 20%. The Department of Education report lists student repayments by each college or university. The significance of the report is that some programs at for profit colleges, funded by college loans from the federal government could be ineligible, due to low student repayment rates. That could mean a huge dent in earnings at a majority of for profit colleges, since they get most, in some cases, more than 80% of their revenues from federal student loans. The Career College Association, in a response to the report, issued a statement on Friday. “We have said consistently that the current laws are clear and the rules exist to provide the necessary oversight,” said CCA President Harris N. Miller. “If institutions or individuals are not playing by the rules, and that is established after careful review of the facts, they need to be held accountable. To that end, we agree that the Department should add resources to carry out its functions properly and to help assure quality education for students. We support activities that improve education quality while at the same time not denying access to millions of non-traditional students, those with the fewest opportunities in life to obtain post secondary education. We look forward to working with the Department to achieve these goals.” More in this article from Reuters News Service, click here. Full text of CCA statement, click here. U-S Department of Education proposed rulemaking involving loan repayment rates and press release , click here. Also see this August 16 2010 article from Washington Post. 08/14/2010 PRESIDENT SAYS U-S IS "NOT PLAYING FOR SECOND PLACE" IN EDUCATION / REMINDS STUDENTS OF NEW FINANCIAL INCENTIVESMore from the Emeritus Newsroom- During a Speech at the University of Texas in Austin, President Obama said the U-S will boost its standing in the world by educating its workforce. And he underlined the administration's initiatives, putting more money in the hands of colleges and their students. Obama outlined what he hopes will attract more students to colleges and graduate them to higher paying jobs.
"...we need an economy that puts Americans back to work, an economy that’s built around three simple words -- Made in America. Because we are not playing for second place. We are the United States of America, and like the Texas Longhorns, you play for first -- we play for first", said Obama. "I’ve called for doubling our exports within the next five years, so that we're not just buying from other countries, I want us to sell to other countries. We've talked about doubling our nation’s capacity to generate renewable energy by 2012, because I'm actually convinced that if we control the clean energy future, then our economic future will be bright -- building solar panels and wind turbines and biodiesel. And I want us to produce 8 million more college graduates by 2020, because America has to have the highest share of graduates compared to every other nation.But, Texas, I want you to know we have been slipping. In a single generation, we’ve fallen from first place to 12th place in college graduation rates for young adults", explained the President. The President's tour of Texas included a fundraiser for Democratic Gubernatorial candidate and former Houston Mayor, Bill White. White faces an uphill battle trying to defeat incumbent Governor Rick Perry, who has held the job since former President George W. Bush resigned the office to run for President in 2000. Text of President's speech, click here. 08/10/2010 HIGH SCHOOLS HELD ACCOUNTABLE WHEN GRADUATES MOVE TO COLLEGEMore from this article from the New York Times, click here- 08/10/2010 COLLEGE BOARD SAYS U-S EDUCATION LIMITING ECONOMIC GROWTHMore from the Emeritus Newsroom- An education deficit that could place the U-S at an economic disadvantage for decades, perhaps indefinitely. The assessment comes from the College Board's College Board's Commission on Access, Admissions, and Success in Higher Education. Formed in 2008, the commission was charged with studying the education pipeline as a single continuum and identifying strategies to significantly increase the proportion of students, especially low-income and underrepresented minority students, who graduate from college and are prepared to succeed in the 21st century. In the Commission's recently released 2010 report, the problem is summarized with a proposal to fix what is broken and reach a goal of 55% college educated population by the year 2025. "The country is not keeping pace with other industrialized nations: Once a world leader in the proportion of adults ages 25 to 34 with post secondary credentials, the United States now ranks 12th", according to the report. Some of the specific deficiencies:
The commission's report, Coming to Our Senses: Education and the American Future, established 10 interdependent recommendations to reach a goal of ensuring that at least 55 percent of Americans hold a post secondary degree by 2025. The College Board made a commitment to measure progress toward this goal on an annual basis. "The initial progress report issued by the College Board Advocacy & Policy Center underscores both the critical challenges and the vital importance of advancing the college completion agenda. The United States' downward drift among industrialized nations in post secondary completion threatens our nation's future economic well-being as well as our position of global leadership. The coordinated, comprehensive approach recommended by the College Board gives us the opportunity to plug the numerous "leaks" in the education pipeline, reverse the troubling trends in college completion, and secure America's economic and social future for generations to come. I am heartened by the progress we are seeing in some areas, but a broader commitment is required if we genuinely wish to succeed," said Chancellor Kirwan, who chaired the commission. Full text of College Board press release, click here. Link to College Board Executive Summary, full text of report and graphics, click here. Excellent Commentary by Columnist Bob Herbert on the report, click here. 08/08/2010 HOUSE TO BE RECALLED FROM SUMMER BREAK TO SAVE TEACHING JOBS AND MEDICAIDMore from the Emeritus Newsroom- Speaker Nancy Pelosi says the House will be called to vote next week on a $26 billion aid package for states which passed the Senate on Wednesday. The money goes for state education and medicaid payments. The funding for education is expected to save at least 130,000 teaching jobs across the country as states face major cutbacks due to the recession and high unemployment. The House broke for summer recess last week, however, with Senate approval of the aid package, which had been blocked by Senate Republicans, Pelosi was forced to recall the House next week, in order to get a vote and critically needed money before the start of the school year. 08/05/2010 FOR PROFIT COLLEGES TAKE HEAT FOR STUDENT LOAN PRACTICESMore from the Emeritus Newsroom- Loan practices by 15 for-profit colleges were singled out in a Government Accountability Office report, the focus of a Wednesday hearing before the Senate Health, Education, Labor and Pensions Committee. The GAO report called attention to deceptive and questionable practices, where students were encouraged to lie on their applications to better their chance for loans. A video presented by the agency was played at the hearing, featuring investigators posing as students being consulted by recruiters and financial aid advisors from for-profit colleges. The GAO report included problems reported at some of the best known for-profit institutions including, University of Phoenix, Kaplan, The industry has been subjected to increasing accusations that students are not told the true cost of the education at for profit colleges, the impact of their debt loads, and the prospects for employment, earning potential, and ability to repay the loans. For-profit colleges received an estimated $4 billion in aid and $20 billion in Department of Education loans last year. For some, that money constituted most of their revenues, in some cases, as high as 90%. The Senate hearing revealed instances of students being told by college financial aid representatives to lie on their applications through such tactics as lying about their savings and even suggesting applicants list children, when they had none. Also, in his testimony before the committee, Gregory D. Kutz, Managing Director Forensic Audits and Special Investigations for the GAO said the agency found, "that for the five associate’s degrees we were interested in, tuition at a for-profit college was significantly more than tuition at the closest public college. On average, for the five colleges we visited, it cost between 6 and 13 times more to attend the for-profit college to obtain an associate’s degree than a public college". Responding to the accusations, executives of the Career College Association, which represents for profit colleges on Capitol Hill, “Even if the problems cited in the GAO report are limited to a few individuals at a few institutions, we can have zero tolerance for bad behavior,” said CCA President and CEO Harris N. Miller. “As educators, our commitment must always be to put students first, even if that means taking action against individual employees or institutions that color outside the lines. We understand that employees can make mistakes, but it is up to employers to take the set of comprehensive and multifaceted preventative and corrective actions that minimize the risk of such problems and correct those that occur. “We will expand our existing compliance program to help CCA member institutions achieve the highest standards,” Miller continued. “The rules exist to protect students and taxpayers, and must be observed.” Steps CCA will immediately implement in response to the GAO report:
“Our resolve is to answer any questions about the quality, suitability and value of career education for our students. We are moving as one community to address the issues raised in the GAO report. We will continue to add to this ‘zero tolerance’ program until all such doubts about our sector are removed,” Miller concluded. New loan practice requirements at for-profit colleges are proposed to start this year. They range from complete disclosure of total loan costs, graduation rates, job placement percentages and incentive payments to recruiters. Full text of GAO hearing statement, click here. CCA (For-Profit Colleges) statement on GAO report, click here.Full video replay of hearing, click here. Selected video clips of GAO investigators posing as prospective students and GAO report summary, click here. Associated Press article on proposed new rules at for-profit colleges, click here. 08/05/2010 DEMOCRATIC LAWMAKERS ASK FOR G-A-O PROBE OF STUDENT AID TO "FOR-PROFIT" COLLEGESMore from the Emeritus Newsroom - The Senate Education Committee has scheduled a hearing for Thursday, June 24th, focusing on what is considered by some lawmakers, to be a disproportionate share of federal student aid dollars going to "for-profit" colleges. Members of both the House and Senate Education Committees have sent letters to leaders of the "for-profit" colleges explaining their concerns. Federal stats show that "for-profit" colleges have about 10% of the nation's student enrollment, yet command about 25% of the student aid dollars. THE HEARING WILL BE WEBCAST AT http://help.senate.gov. In a statement posted on the Senate Education Committee web site, Senator Tom Harkin (D) IA, wrote: “More than two decades have passed since Congress last examined the for-profit education sector and in that time, we have seen an explosion in growth in for-profit colleges, and in the federal taxpayer dollars they receive,” said Harkin. “With students, families and taxpayers investing so heavily in for-profit institutions through large loan debt and billions of dollars in federal student aid, we must ensure that student are actually getting the knowledge and skills they need to pay off the debt. Meanwhile, the lobbying group involving "for-profit"colleges, which earlier this month changed its name from The Career College Association (CCA) to the Association of Private Sector Colleges and Universities (APSCU), responded: The "Senate hearing later this week on private sector higher education is composed almost entirely of sector critics and, as a result, is unlikely to help the American people understand the important changes taking place in post secondary education. “What we will hear from one of the witnesses—a Wall Street short-seller born with a silver spoon in his mouth, who got his first big paycheck the old fashioned way, through his parents—will be self-serving attacks on non-traditional students designed to fatten his wallet, not to inform the American people on how best to get unemployed and underemployed Americans educated and back to work,” stated Harris N. Miller, CCA President and CEO. “We welcome oversight by the Senate Health, Education, Labor and Pensions Committee, but are surprised that Secretary of Education Arne Duncan or one of his lieutenants is not the primary witness to give the Committee a broad overview of higher education and our sector’s role in it.” Miller continued: “We look forward to working with the HELP Committee on future hearings, bringing students, graduates, institutions, employers and post secondary education experts--especially those whose comments are based on facts, not enriching their own bank accounts--into the conversation.” DEVELOPING BETTER ALTERNATIVES FOR THOSE WHO WILL NOT ATTEND COLLEGEMore from the New York Times, click here- 05/15/2010 OBAMA WANTS 26 BILLION EMERGENCY AID TO SAVE 300,000 TEACHING JOBSMore from the Emeritus Newsroom- President Obama and Education Secretary Arne Duncan are requesting $26 billion in emergency funds to save 300.000 teaching jobs that are expected to be lost over the summer. In a letter to congressional leaders, Duncan requested supplemental appropriations bills totaling $23 billion to preserve education jobs, along with $1 billion in funds to preserve early childhood education jobs and an additional $2 billion to support public safety. Full text of Department of Education press release, including letter to congressional leadership, click here. 05/14/2010 IOWA ENGLISH TEACHER IS TEACHER OF THE YEAR
Sarah Brown Wessling is a high school English teacher at Johnston High School in Johnston, Iowa, and the recipient of this year’s National Teacher of the Year Award.More from the Emeritus Newsroom- A proponent of open learning, Sarah Brown Wessling, says, “The desk in the back of the room” displaces hierarchies, creates an environment where a teacher becomes a lead learner, and evolves into a web of interdependence where the classroom walls become boundless. When we embrace this open-model of learning, the consumers of our curriculum will become designers of their own learning". The latest Teacher of the Year graduated from Winterset High School and Iowa State University and is only the second Teacher of the Year to come from Iowa. In achieving the honor, Wessling begins a national speaking tour to push education issues, beginning June 1st. Wessling told those gathered to honor her at the White House Rose Garden that, " In front of us all is the collective responsibility to create hope and opportunity for every child in this country". Full text of Wessling speech, click here. Video of Wessling ceremony at the White House, click here. 04/29/2010 100,000 VETERANS TRANSFER THEIR EDUCATION BENEFITS TO FAMILY MEMBERSMore from the Emeritus Newsroom- The Department of Veterans Affairs claims it has received more than 100,000 family transfer requests for remaining education benefits. According to the Armed Forces Press Service, Signed into law in June 2008, the new GI Bill is a Department of Veteran Affairs-sponsored program that provides the most comprehensive educational benefit package for veterans since the original GI Bill -- the Servicemen's Readjustment Act of 1944 -- was authorized toward the end of World War II. A provision in the new bill, which permits service members to transfer their unused educational entitlement to a spouse or child, has transferred "months of benefit eligibility to over 240,000 family members," Robert E. Clark, assistant director of accession policy for the office of the undersecretary of defense for personnel and readiness, told lawmakers today. "To date, over 105,000 requests from career service members have been approved," Clark said in a prepared statement to the Senate Veterans Affairs Committee, "transferring months of benefit eligibility to over 240,000 family members". Full text of Armed Forces Press Service. 04/21/2010 IOWA SENATOR HARKIN PROPOSES $23 BILLION BAILOUT FOR SCHOOLSMore from the Emeritus Newsroom- With the prospect of thousands of educators losing their jobs in the coming year, Iowa Senator Tom Harkin (D) has proposed a 23 billion dollar bailout of the nations schools. Just outside Washington DC, in Prince Georges County, Maryland, at least 800 positions are to be cut in schools there with thousands of others, mostly in major cities, such as Los Angeles where up to 6,000 positions, many of them teachers, are expected to be terminated. Even U-S Education Secretary Arne Duncan admits there could be 300,000 education related positions cut by year's end when Recovery and Stabilization Act funds for education run out. Sen. Harkin is Chairman of Senate Committee on Health, Education, Labor and Pensions. Harkin announced his proposal today saying the country cannot wait until August for action. “Recent headlines make the case that two pillars of the American dream – a good job and a good education – are at risk for millions upon millions of our citizens,” Harkin said. “At this point in our fragile recovery, we need to put Americans back to work educating the next generation, and that’s what this bill does.” The $23 billion included in the Keep Our Educators Working Act is roughly half of the amount dedicated to state aid in the SFSF, and is equal to the amount passed by the House in its December 2009 jobs legislation. Funding could be used for: • Compensation and benefits and other expenses necessary to retain existing employees, and for the hiring of new employees, in order to provide early childhood, elementary, secondary, or post secondary educational and related services; or • On-the-job training activities for education-related careers. Full Text of Harkin press release, click here. Senator Harkins comments during subcommittee hearing on education funding, click here. Video of Subcommittee hearing, click here. 04/14/2010 OBAMA SIGNS HOUSE BUDGET RECONCILIATION BILL / INCLUDES HEALTH INSURANCE REFORM AND STUDENT LOAN REFORM WITH MORE PELL GRANTSMore from the Emeritus Newsroom- After singing the Senate version of health insurance reform last Tuesday, President Obama today signed the House budget reconciliation version. The reconciliation version contains much of the funding for health insurance reform as well as student loan reform. During the signing ceremony at Northern Virginia Community College, President Obama told students the legislation will generate nearly $68 billion in savings over the next 11 years by finally putting an end to bank subsidies to act as middlemen for student loans. Some of the savings, according to the President, will be used to reinvest in community colleges, 800,000 more Pell grants, increasing the per student Pell grant to almost $6,000, and limiting to ten per cent, the percentage of your income that will be used at any one time to repay your student loans. the proposal also includes forgiveness for some of the loans if the student selects some of the target job categories after graduation, such as enlisting in the armed forces, or being a teacher or a nurse in under served and poor areas. Text of President's speech, click here. Text of review of the new law from Brian Levine of the Middle Class Task Force, click here. MP4 Video from Dr. Jill Biden on details of the student loan reform bill, click here. Text and action listings on the Health Care and Education Reconciliation Act of 2010 (HR 4872), click here. 03/30/2010 TENNESSEE GETS $500 MILLION AND DELEWARE $100 MILLION IN "RACE TO THE TOP" COMPETITIONMore from the Emeritus Newsroom-According to the U-S Department of Education, the first phase of the "Race to the Top" competition has brought the state of Delaware $100 million and Tennessee $500 million to be used to implement their comprehensive school reform plans over the next four years. As with any federal grant program, budgets will be finalized after discussions between the grantees and the Department, and the money will be distributed over time as the grantees meet established benchmarks. The U.S. Department of Education will have about $3.4 billion available for the second phase of the Race to the Top competition. "We set a very high bar for the first phase," Duncan said. "With $3.4 billion still available, we're providing plenty of opportunity for all other states to develop plans and aggressively pursue reform." The $4.35 billion Race to the Top Fund is an unprecedented federal investment in reform. The program includes $4 billion for statewide reform grants and $350 million to support states working together to improve the quality of their assessments. The Race to the Top state competition is designed to reward states that are leading the way in comprehensive, coherent, statewide education reform across four key areas:
Forty states and the District of Columbia submitted applications for the first phase of grants. Delaware and Tennessee were selected from among 16 finalists who presented their proposals to panels of peer reviewers earlier this month. In a statement released today by the National Education Association, a teachers union, NEA President Dennis Van Roekel said: “Educators are key partners in any successful effort to turn around low-performing schools. You can’t build a good plan that will yield long-lasting, sustainable results that are positive for students and their schools without having buy-in from all stakeholders. By selecting Delaware and Tennessee’s proposals—two states that submitted highly collaborative and comprehensive plans—the administration did what was right for students. “Unfortunately, the Race to the Top competition does not address the pressing needs of students in all states. For Delaware and Tennessee, it is only a stopgap effort for the sustained funding those states need. For the other 48 states that did not receive any funding, their financial situations are still just as bleak. The competition cannot comprehensively take on the looming problems of fiscal inequity among America’s public schools or systemically improve our nation’s schools. “America’s students need more than a program that only rewards a few throughout the country, and that is why it is vital that the administration and Congress move forward to revamp and reauthorize the Elementary and Secondary Education Act.” Full text of Department of Education press release, click here. Full text of NEA statement click here, 03/29/2010 READING SCORES STAGNANT UNDER "NO CHILD LEFT BEHIND" / AMERICAN STUDENTS NOT IMPROVING FAST ENOUGHMore from the Emeritus Newsroom- The latest study on American student reading abilities reveals more challenges ahead. According to a statement today from U-S Education secretary Arne Duncan, American students reading test results are not "improving fast enough". Duncan was responding to test results released today from the National Assessment of Education Progress, which bills itself as the "Nation's Report Card". Among the highlights, according to NAEP, "National results show that gains in overall average scores seen in earlier years did not continue at grade 4 but did continue at grade 8. The overall average score for fourth-graders in 2009 was unchanged from the score in 2007 but was higher than the scores in other earlier assessment years from 1992 to 2005. The average score for eighth-graders in 2009 was 1 point higher than in 2009 and 4 points higher than 1992 but was not consistently higher than in all the assessment years in between. There were no significant changes from 2007 to 2009 in the score gaps between White and Black students or between White and Hispanic students at either grade 4 or grade 8. State results for grade 4 show score increases since 2007 in three states and jurisdictions and decreases in four states. At grade 8, scores were higher in 2009 than in 2007 in nine states and jurisdictions, and no states showed a decline". Direct links to 4th and 8th Grade reports, including state statistics, click here. Full text of National Report Card, click here. Press release from Education Secretary Duncan, click here. 03/24/2010 SUPREME COURT RULES IN FAVOR OF STUDENT BILLED FOR SCHOOL LOAN INTEREST CHARGES AFTER BANKRUPTCY / BUT COURT TAKES DIM VIEW OF DISMISSING STUDENT LOANS IN BANKRUPTCIESMore from the Emeritus Newsroom- The U-S Supreme Court has ordered that Francisco Espinosa does not have to pay interest charges on a college loan that was wiped out in a bankruptcy. Espinosa also wanted interest on his college loans dismissed in his 1993 bankruptcy, but the loan servicer refused. Now in a confusing set of circumstances, Espinosa has won his case and will not be liable for over $4,582 in interest on four loans. In short, the Supreme Court ruled his loans were improperly dismissed in the original bankruptcy case, but since the bankruptcy court approved the agreement, Espinosa could not then be liable for interest charges on a loan that had been dismissed in a bankruptcy. The court's decision, written by Justice Clarence Thomas, stated, "Respondent Espinosa’s plan proposed repaying the principal on his student loan debt and discharging the interest once the principal was repaid, but he did not initiate the required adversary proceeding. The student loan creditor, petitioner United, received notice of the plan from the Bankruptcy Court and did not object to the plan or to Espinosa’s failure to initiate the required proceeding. The Bankruptcy Court confirmed the plan without holding such a proceeding or making a finding of undue hardship. Once Espinosa paid his student loan principal, the court discharged the interest. A few years later, the Department of Education sought to collect that interest. In response, Espinosa asked the court to enforce the confirmation order by directing the Department and United to cease any collection efforts. United op-posed the motion and filed a cross-motion under Federal Rule of Civil Procedure 60(b)(4), seeking to set aside as void the confirmation order because the plan provision authorizing discharge of Espinosa’s student loan interest was inconsistent with the Code and the Bankruptcy Rules, and because United’s due process rights were violated". And the Supreme Court found the bankruptcy judge and the loan servicer both made mistakes handling the case and the loan. "Given the Code’s clear and self-executing requirement for an undue hardship determination, the Bankruptcy Court’s failure to find undue hardship before confirming Espinosa’s plan was a legal error. See Part III, infra. But the order remains enforceable and binding on United because United had notice of the error and failed to objector timely appeal". "We thus assume that, in some cases, a debtor and creditor may agree that payment of a student loan debt will cause the debtor an undue hardship sufficient to justify discharge ". And the court found that, “Debtors and their attorneys face penalties under various provisions for engaging in improper conduct in bankruptcy proceedings,” id., at 644; see Fed. Rule Bkrtcy. Proc. 9011. The specter of such penalties should deter bad-faith attempts to discharge student loan debt without the undue hardship finding Congress required. And to the extent existing sanctions prove inadequate to this task, Congress may enact additional provisions to address the difficulties United predicts will follow our decision. The Supreme Court's decision thereby, upheld the previous decision of the U-S Ninth District Court of Appeals. Full text of the actual Supreme Court decision, click here. 03/23/2010 CONGRESSIONAL BUDGET OFFICE GIVES POSITIVE REPORT ON DEMOCRATS STUDENT LOAN PROPOSAL / SAYS IT WILL PRODUCE "SIGNIFICANT COST SAVINGS"More from the Emeritus Newsroom - House and Senate Democrats pushing a new student loan bill as part of the reconciliation package that includes health insurance reform, got positive news this morning from the Congressional Budget Office. According to Director Doug Elmendorf, "CBO estimates that the President’s proposal would generate significant cost savings using both the FCRA and fair value approaches, but the savings would be smaller under the fair-value approach. (Both estimates were constructed relative to CBO’s most recent set of baseline budget projections, which were issued earlier this month.) Using the FCRA methodology, CBO estimates that replacing new guarantees of student loans with direct lending would yield savings in mandatory spending of about $68 billion over the 11 years from 2010 through 2020. That figure represents the estimated savings in mandatory costs that would be shown in a CBO cost estimate for legislation under consideration by the Congress. However, adjusting for the projected increase in annual discretionary administrative costs in the direct loan program, the net reduction in federal costs from the proposal would be about $62 billion. On a fair value basis, incorporating administrative costs and the cost of risk, CBO estimates that replacing new guarantees of student loans with direct lending would yield savings of about $40 billion over the 2010-2020 period. The primary reason for that $22 billion difference is that payments from the government to lenders are risky—they terminate when a borrower defaults on or prepays a loan. Those payments are less valuable to lenders and less costly to the government when the cost of that risk is taken into account, so terminating those payments by eliminating the guaranteed loan program yields smaller savings for the government". Full text of Elmendorf CBO blog on student loan proposal, click here. 03/17/2010
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