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April 07, 2006
Stealth competitiveness issues
Congress is grapping with two major pieces of legislation that will affect the future of the US economy. One has recently grabbed the headlines: immigration reform. As I've stated before, immigration is one of the issues we need to get right if we are to have the workforce we need for the I-Cubed economy.
Another part of that human capital equation is also under debate in the Congress, but not getting the headlines: higher education. At the end of March, the House passed the College Access and Opportunity Act of 2006. As the New York Times - "House Passes Education Bill on Party Lines" reports:
The $70 billion proposal, which would renew the law until 2012, sets the terms for loans and grants along with the limits for maximum aid. It was last renewed in 1998.
The floor debate showcased partisan differences over how to approach an era when increases in tuition routinely outpace inflation and the ability of many Americans to pay for college. Republicans, who are particularly striving to control a soaring budget deficit by avoiding new spending, said the bill would make college more affordable.
Democrats wanted to cut interest rates on student loans and enlarge Pell Grants, which had been frozen for several years.
The bill had been threatened by a number of controversial provisions, including one that aid for-profit education companies. According to the Wall Street Journal - Higher-Education Bill Aims to Stir Up Academia":
Congress recently handed for-profit schools a big win when it eliminated a rule requiring all colleges to offer at least half of their instruction in brick-and-mortar classrooms to be eligible for federal financial aid. The restriction, intended to prevent fraud, had hindered online education programs that are especially popular offerings among education companies.
A provision in the latest bill would weaken another requirement -- that schools receive no more than 90% of their revenue from federal financial aid. The rule was intended to prevent a repeat of widespread fraud in the 1980s and early 1990s, when some trade schools signed up unqualified low-income students in order to collect federal aid. For-profit schools are most likely to bump up against the 90% limit because they lack other funding sources and often cater to low-income students. Schools would now have more time to get back in line with the rule if they fall short.
Apparently, those problems were worked out, as the bill that passed the House had different language regarding for-profit colleges than what was in the bill when it was reported out of the House Education and the Workforce Committee. And the
American Council on Education President David Ward issued the following statement regarding passage of H.R. 609:
I am pleased that today the House of Representatives passed the College Access and Opportunity Act (H.R. 609). This is an important step in the process of completing the reauthorization of the Higher Education Act of 1965--a process that began three years ago.
It is important to the I-Cubed Economy that non-traditional forms of learning flourish - without the fraud and waste that has accompanied some of these endeavors in the past. As the same time, it is important to strengthen the ability of traditional higher education institutions to offer a variety of learning experiences. Let's hope that this bill has struck the proper balance.
Let us also hope that when the Senate takes up the bill, it will be able to find the additional resources to expand student loans and grants -- so that a college education is accessible to all.
Posted by Ken Jarboe at April 7, 2006 09:43 AM
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