Thursday, November 28, 2013

Feds Strike It Rich Indebting Our Nation's Youth

The federal government posted a $41.3 billion profit on its student loan business in fiscal year 2013, a higher profit level than all but two companies in the world: Exxon Mobil ($44.9 billion) and Apple ($41.7 billion). USA Today reports:

The numbers track the entire fiscal year that ended Sept. 30. They come as concern continues to mount about the level of indebtedness by college students and graduates. Estimates show more than $1.2 trillion in student loan debt across the nation, more than the nation owes on credit cards.
Kelly Wilk, a December 2010 graduate from the University of Michigan-Dearborn, feels the impact of her loans all the time. She graduated with about $25,000 in federal loans and now owes slightly more than $22,000, with a monthly payment of $281.

"For some, this payment may not seem too bad," the 25-year-old Livonia resident said. "But for me, it is a huge monthly payment; it is pretty much a car payment or half of rent.

Student loan debt is crushing young Americans and it is the fastest growing type of debt in the nation. While credit card debt has grown by just 2 percent over the last two years, student loan debt has grown by 20 percent. Americans now owe more in student loan debt than any other consumer type of consumer debt except for mortgages.

And yet the federal government insists on continuing to subsidize it, which only sends tuition higher, forcing even more students to take on more debt.

There is a better way.

Sen. Mike Lee (R-UT) is working on legalization that would reduce the price of higher education by dismantling the monopoly power existing colleges an universities use to keep tuition rising.

Lee's bill would empower states to create their own accreditation organizations, who would then be able to sanction new higher education options. Lee outlined in October:

Today, only degree-issuing academic institutions are even allowed to be accredited. Under the new, optional state systems that my bill would authorize, accreditation could also be available to specialized programs, individual courses, apprenticeships, professional credentialing, and even competency-based tests. States could accredit online courses, or hybrid models with elements on- and off-campus....

Imagine having access to credit and student aid and for:

a program in computer science accredited by Apple or in music accredited by the New York Philharmonic;

college-level history classes on-site at Mount Vernon or Gettysburg;

medical-technician training developed by the Mayo Clinic;

taking massive, open, online courses offered by the best teachers in the world... from your living room or the public library.

Brick-and-ivy institutions will always be the backbone of our higher-education system, but they shouldn’t be the only option.

If these new models were to succeed, they would create a virtuous cycle. Traditional colleges would be impelled to cut waste, refocus on their students, and embrace innovation and experimentation as part of their campus cultures.

This reform could allow a student to completely customize her transcript – and “college” experience – while allowing federal aid to follow her through all of these different options.

Students could mix and match courses, programs, tests, on-line and on-campus credits a la carte, pursuing their degree or certification at their own pace... while bringing down costs to themselves, their families, and the taxpayers.

The federal government should not be in the business of subsidizing debt for anyone, but particularly not young Americans just starting to live on their own. More Republicans should embrace Lee's vision for a different higher education solution.


Village Academic Curriculum: Feds Try Different Anti-Voucher Tactic

While at first glance it seemed like Eric Holder's Justice Department was giving Louisiana students a break by dropping the request for a permanent injunction against the state's voucher program, they instead are trying to bog down the process by reviewing each and every application. This is the opinion of Louisiana Republican Gov. Bobby Jindal, who remarked on the change of tactics that "[t]he Department of Justice's new position is that it wants bureaucrats in Washington to decide where Louisiana children get an education."

The federal government sued in August to stop Louisiana's two-year-old voucher program, claiming it ran afoul of a 1975 anti-discrimination injunction against the state. This is despite the fact that 90% of the 8,000 beneficiaries chosen by lottery are low-income minority students who get the opportunity to move from a poor-performing school to a better one.

Why? Follow the money. Funding that would have gone to a recipient's former school goes to the new school, and private schools are among those eligible for funding. That didn't sit well with the state's teachers union, which fought the program at the state level all the way to its highest court. The Louisiana Supreme Court allowed the program, but did not allow funding to come from the state's education budget so these vouchers are funded as a state budget line item.

Given the union-friendly slant of the present administration, it was only a matter of time before Washington intervened on the union's behalf. The process will only discourage those who want to improve their child's prospects when faced with the prospect of a 45-day hold before the Justice Department allows the state to notify the scholarship recipient. "The obvious purpose of the gag order would be to prevent parents from learning that the Department of Justice might try to take their child's scholarship away if it decides that the child is the wrong race," Jindal concluded.

With more states either enacting or considering similar programs, it's clear Holder's brand of justice is simply to make an example of Louisiana and protect threatened teacher's unions in the process


Australia:  Education Minister refuses to meet Leftist  panel on school funding

Federal Education Minister Christopher Pyne has said he is too busy to meet the expert panel that devised the so-called Gonski school funding model to discuss how it works before he discards it.

In a move that has angered the nation’s two most populous states and concerned a member of the panel, Kathryn Greiner, Mr Pyne has declared the Gonski needs-based model a "shambles" and has promised to go "back to the drawing board" to create a new system.

Mr Pyne told ABC Radio on Tuesday the government would "stick with what we’ve got" for the 2014 school year but wanted to move to a "flatter, simpler, fairer structure" after that.

He said the Coalition was committed to the same quantum of funding as Labor over the next four years.

But despite saying before the election that the Coalition and Labor were on a "unity ticket" on school funding, Mr Pyne said the Abbott government was not committed to the escalation of funding Labor had promised over six years.

"Our election policy was that we would support a four-year agreement ... we won’t be honouring a six-year agreement," he said.  "There’s no year five or year six in the Coalition’s funding agreement."

Mr Pyne said there was no reason for schools to fear they would receive less funding over the next four years and he defended the Howard government’s socioeconomic status funding model – which remains in place – which he said was also needs-based.

Asked whether he was prepared to meet the Gonski panel, Mr Pyne said he was too busy.  "No, I’ve studied the Gonski model closely and I have to get on with the job of being the education minister," he said.

"I think we’ve had a lot of talk, a lot of conferences, a lot of reports, a lot of analysis of those reports, we’ve had an election campaign, we’ve had election policies from both sides. It’s time for the government to be allowed to get on with the job and that’s exactly what I intend to do."

Gonski panel member Ms Greiner said she was disappointed that Mr Pyne would not meet the panel, and was concerned that the Coalition would not commit to six years of funding.

She contradicted Mr Pyne’s characterisation of the socioeconomic status model, which she described as "very broken".  "It was opaque, it was not transparent, it was confusing. It was, in fact, a beggar’s muddle," she told ABC radio.

She said the "flatter, simpler, fairer" structure Mr Pyne said he wanted could not meet the individual needs of students.  "It’s much more complicated than that," she said.

NSW Education Minister Adrian Piccoli rejected Mr Pyne’s criticism of the Gonski model, which he said was "fair and transparent". "It is a much fairer way of funding schools," he told ABC Radio on Tuesday.

"People have agreed to it and we don’t want to go through another three-year process of unravelling it all."

Mr Piccoli acknowledged the federal budget was under pressure but said NSW had committed to additional funding over six years in return for the Commonwealth’s promise of greater resources over the same period.

"We’re all under the same financial pressures," he said.

The Victorian government has also urged the Commonwealth to honour the schools funding deal it reached while federal Labor was in power.

A Victorian government spokeswoman insisted on Monday that a $12.2 billion deal had been reached guaranteeing "record levels of funding and an unprecedented six years of funding certainty" for schools in Victoria.

"Victoria made it clear that, along with Victorian schools and school communities, we expect the Commonwealth to honour this funding, which was agreed to on 4 August 2013," the spokeswoman said.

Meanwhile, Melbourne Catholic Education Office executive director Stephen Elder said he was still involved in "arduous" negotiations about funding for Catholic schools with the Victorian government.

"In addition, the Victorian government has foreshadowed another funding review on the back of two years of Gonski negotiations," he said.

Victorian Education Minister Martin Dixon said 2014 would be a year of "limited change".  "The Victorian government, over many years, has worked with the non-government schools sectors to update local school funding arrangements and this long-standing process will continue," he said.


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