U of Phoenix Makes History UPDATED

http://www.nasfaa.org/publications/2009/ryearround052609.html http://www.nasfaa.org/publications/2009/rfinalrule102909.html http://ifap.ed.gov/dpcletters/GEN1014.html The general way things are implemented is unfortunately that the new features that benefit schools, lenders, guarantors and states are implemented immediately after enactment. If there are features that need to be fleshed out by regulation, then stakeholders are told to make a good faith legal effort to implement things in advance of official regulations. The implication is that stakeholders will be held harmless for any fraud, waste and abuse that happens to occur as dozens, if not hundreds, of "interpretations" of the same statute are made by individual stakeholders. Conversely, the general way that things are implemented is that those features that benefit students, borrowers, taxpayers, program integrity and oversight in general are implemented only after exhaustive study, review, and the full negotiated rulemaking cycle, even if they appear on the surface to be self-implementing. After all, stakeholders needs sufficient time to modify their systems and processes . . . Check out OIG's reports on previous experiences with stakeholders' "good faith effort to comply" with newly-enacted HEA provisions. Yes, in any case, Pell Grant appropriations will be unable to keep up with tuition and rising costs. Perhaps "COA" in the federal methodology should be calculated on a standard, generic, minimalist tuition and living cost, perhaps based on (i know Ed Sector isn't going to like this one) an average State college. This will at least take away the policy argument that the federal methodology is a "driver" for sticker price inflation in postsecondary ed. In any case, the "COA" part of the formula is simply too variable, not only for taxpayers but also for middle-school and high-school students trying to guess what type of financial aid they will qualify for when they finally go to college. This is probably much more of an issue for the federal loans, where the annual maximum is typically much higher than the maximum Pell Grant.

Ed Sector could not be more off-base as far as the national causes of the increases in Pell outlays. The causes, in order of significance, are (1) the implementation of the "year-round Pell Grant," (2) the recession, and, way in the back of the pack, (3) the nominal increase in the annual Pell Grant maximum. The year-round Pell, pushed by "access" advocates for decades and signed into law by George W. Bush during his last rew months of office, is laden with fraud, waste, and abuse, even by traditional, Ivy-league-type institutions. Year-round Pell effectively eliminates the significance of the nominal, annual Pell Grant maximum, as students can now receive much MORE than the annual Pell Grant maximum during any given 12-month period. And the only lifetime limit on Pell eligibillity for the student is 18 semesters' worth (or equivalent) of Pell Grants received. The HEA now requires the DoEd to provide a second Pell Grant for students who pursue "year-round study." Students who receive a second Pell award may exceed the official, nominal, maximum grant for the year in which they receive it. Traditionally, the summer was "Pell-free" (often no Federal student loans either), and, arguably, students who wished to accelerate their academic progress either had to attend summer school on their own dime (God forbid!) or take out a private loan. Other schools made summer a "loan-only" environment and did provide access to FFELP loans. (Of course, the last thing the schools wanted a public policy discussion of was the possibility that the schools, not the students or the federal govt, should cover these costs out of their own pocket . . . ) One of the goals of year-round Pell was to help more students get back to more of a four-year time-table for completing their bachelors degrees. Instead of shaming colleges into spending more many on undergraduate education and reducing the challenge of students getting into all the classes they need to complete their degree within four years, Uncle Sam simply throws more money at the problem. Their are no program integrity controls put in place to manage the potential explosion in fraud, waste and abuse of this new program. That's always done on the "back end," after the abuses come to light and after the money is long gone. Similar to the hatched-out-of-thin ear "Grad PLUS" loan type, the year-round Pell lacked the years of quantitative vetting and analysis which would have permitted the govt to get a solid grasp of the risks of future volumes.