Student loan deal to get Obama's signature Friday

By Ricardo Lopez

August 9, 2013, 8:03 a.m.

It took an entire summer of wrangling, but students heading to college this fall won't see dramatic student loan interest rate hikes once President Obama signs a deal on the matter, a move expected Friday.

About 11 million college students are expected to benefit from the legislation, which brings interest rates near what they were before a temporary extension expired in June.

Undergraduates will now be able to borrow at a 3.9% rate for subsidized and unsubsidized loans, according to legislation that was negotiated in July.

The previous rate for undergraduate borrowers was 3.4%.

Workers beware: Top cities with falling wages

Graduate students will be able to borrow at 5.4%; parents at 6.4%. But rates are expected to edge higher as they are tied to financial markets. The lower interest rates are in place because the government can borrow more cheaply now, but once the economy improves, borrowers can expect to see rates rise.

There is a cap, however. Interest rates for undergraduates cannot go higher than 8.25%, for instance. Congressional Budget Office estimates show that those higher rates are not expected to be reached any time in the next decade.

The bill, which Obama is expected to sign Friday, was approved by the Senate Aug. 1 -- two months after the previous extension expired and caused interest rates to double to 6.8%.
 
Student loan debt has ballooned in the last decade as more people went to school during the recession. There is now between $902 billion and $1 trillion in total outstanding student loan debt in the U.S, according to Federal Reserve Bank of New York and Consumer Finance Protection Bureau estimates.

via: http://www.latimes.com/business/money/la-fi-mo-obama-student-loan-deal-20130809,0,6067318.story

California GOP sees role to protect education funds

What's a marginalized minority party to do?

It's a key question for Republican lawmakers staring down a newly enshrined Democratic supermajority. Part of the answer so far seems to be a renewed emphasis on higher education.

Both Sen. Anthony Cannella, R-Ceres, and Assemblyman Jeff Gorell, R-Camarillo, have introduced a pair of bills that would freeze tuition at the University of California andCalifornia State University for the seven-year duration of the higher tax rates mandated by Proposition 30.

Since voters approved the tax measure last fall, the authors say they have a role to play in ensuring that an influx of new money from Proposition 30 is exclusively used for education. They say failing to do so would betray voters to whom the initiative was sold as a vehicle for averting more education cuts.

"A lot of people made a lot of implied promises to college students that everything would be OK if Prop. 30 passes," Cannella said. "If anyone thinks the state of California will just keep that money in a bank account," he added, "it's just not going to happen."

Democrats are more skeptical of Republican lawmakers' motives, given that they resisted putting such a measure on the ballot in the first place. Had it failed to pass, resulting cuts in higher education would likely have spurred a tuition hike.

"They're in a situation where they have been fundamentally irrelevant to most of the public policy discussions in Sacramento for quite a while now, and their first step to have some credibility is to say something in the public policy debate," said Democratic strategist Bill Carrick. "So what they've done, obviously, is say, well, people care about education, let's get out front on this."

The fact that Republicans went from opposing Proposition 30 to casting themselves as responsible stewards of the money it raised is a move born more of expedience than of principle, said Steve Maviglio, a Sacramento political consultant who worked for two Democratic Assembly speakers. He called the emphasis on higher education "a post-election gimmick."

"It's like they woke up the day after the election and decided they have a commitment to education," he said.

The focus on higher education was evident in GOP responses to Gov. Jerry Brown's budget proposal last month, which Brown trumpeted as a testament to the new-found fiscal stability Proposition 30 is set to provide.

While many Republican lawmakers praised Brown's budget, they also exhorted Brown and Democrats to ensure that the influx of new funding goes to schools.

In a written response to the budget, Republican Connie Conway, R-Tulare, called the tuition freeze bills an effort to "ensure that this revenue goes to boost higher education funding and prevent tuition and fee increases at our public colleges and universities, just as the voters intended."

In a follow-up interview, Conway affirmed that "we see our role as a watchdog."

"I believe that promises made should be promises kept, so if you're out there telling people 'if you vote for this to raise taxes then it's going to go to education,' then it should," Conway said.

Assemblyman Dan Logue, R-Marysville, has also introduced a pair of higher education bills. They would create pilot programs enabling students to obtain a degree for $10,000 and $20,000, respectively, an effort to hold down ballooning tuition costs.

"We're pricing kids out of a good education, especially the middle class," Logue said.

Democrats campaigned heavily for Proposition 30 on college campuses, mobilizing student voters by saying the ballot measure would prevent a tuition hike.

Logue is also promoting his measures to the young voter bloc, which had some of the highest turnout rates of any age group in California during the November elections.

In a recent press release, he said students have "some of the most powerful voices when it comes to getting involved in government" and called his bills "the beginning of a revolution to the very pressing issue of the rising costs of education."

The 2012-13 budget promised the University of California and California State University $125 million each in 2013-14 if Proposition 30 passed, and the schools agreed to hold tuition steady for 2012-13. Dianne Klein, a spokeswoman for the University of California, said the funding levels in Brown's budget should be enough to prevent a tuition bump this year.

Pushing to ensure that remains the case is one way for Republicans to exert influence when they otherwise have little room to maneuver, said Aaron McLear, political consultant and former press secretary to Gov. Arnold Schwarzenegger.

"They have limited leverage, no question about it," McLear said. "So I think they're using what power they have to try and effect change in the state instead of just curling up and moaning about being in the superminority."

Cannella did not publicly take a position on Proposition 30. But now that the voters have spoken, Cannella said, "the equation has changed." New revenues are coming, and that presents a chance for Republicans to make the most of their diminished status.

"On a political landscape in which support for education is measured predominantly by the amount of money you're willing to spend, Republicans don't get many opportunities to play the education issue to their advantage," said Dan Schnur, director of the University of Southern California's Unruh Institute of Politics. "By arguing about how the Prop. 30 money is going to be spent, they get a chance to look like the big guys."

via The Sacramento Bee

Read more here: http://www.sacbee.com/2013/02/03/5161070/minority-california-republicans.html#storylink=cpy

Prop. 30 Failure Would Mean Enrollment Caps, Fewer Classes at Local Public Colleges

If Gov. Jerry Brown's income- and sales-tax proposition gets rejected by voters, all of the state's public education will take a cut, not just K-12, which has gotten much of the attention in discussions of the potential fallout. 

The Nov. 6 ballot initiative includes a proposed quarter-cent sales-tax and income-tax increase on individuals making more than $250,000 a year. 

The current California budget is "balanced" based on the assumption that voters will approve the measure. If they don't, there will be $5.5 billion in cuts to public education. 

"If it fails, we will likely see two separate waves of consequences," Cal State San Bernardino spokesman Sid Robinson said. "The first stage will come if there is a midyear cut." 

Cal State San Bernardino has anticipated that this could happen and has set aside one-time reserves to address some of the issue for the current year. 

Part of the reserve funds come from deferred maintenance projects and delaying equipment purchases. In addition, the CSU Board of Trustees has already approved a 5 percent tuition increase, beginning in January, if Prop. 30 fails," Robinson said. 

It gets worse from there. 

"The consequences will be much more severe in 2013-14. The trigger cut to the CSU will be another $250 million. This will mean a roughly $10 million reduction to Cal State San Bernardino's state funding." 

If Proposition 30 fails, CSU officials estimate about 20,000 fewer students will be able to attend in the fall of 2013. About 165,000 spots in classes and 5,500 course sections would be cut.

"For CSUSB, that could mean as many as 800 students will not be admitted. We also estimate that our campus will be forced to drop about 375 course sections, and that class sizes will increase to as much as a 30-to-1 student- to-teacher ratio," Robinson said.

There may also be personnel cuts at CSUSB.

"If voters choose to reject Proposition 30, Cal Poly Pomona will face an additional funding reduction of $12 million, which is more than the operating budget of our largest college," university spokesman Tim Lynch said. "That's on top of the nearly $55 million that has been slashed in recent years. The university has been a very good steward of its resources, and every constituency on campus has borne the burden, but the painful reality is that there is no fat to trim. It's only muscle."

The pain will also be felt in community colleges.

San Bernardino Community College District, which includes San Bernardino Valley College and Crafton Hills College, will see "an ongoing $4.3 million loss compared to last year if the taxes do not pass, assuming there are no increases or decreases in future budget years, which is unlikely, because something always changes year-to-year," said Charlie Ng, the district's vice chancellor of fiscal services.

If Prop. 30 fails, the district is prepared to cut course offerings in the spring semester, he said. But officials aren't waiting for the ax to fall before making changes.

"We currently have in place a selective hiring freeze generating savings in wages and benefits, we have reorganized and downsized administrative staff designed to generate savings in wages and benefits," Ng said. "We recently completed a `solar farm' installation at Crafton Hills College designed to save in utilities expenses."

There's a lot at stake, officials said.

"If Prop. 30 does not pass, it will dramatically affect all community colleges, including Chaffey College," Chaffey spokeswoman Peggy Cartwright said.

If it fails, the school will enroll 3,000 fewer students and offer 250 fewer classes, eliminate the summer 2013 session and reduce the school's budget by $4.4 million annually.

"There is no way to predict what will happen in future years," she said, "other than if Prop. 30 fails, it is not a one-time reduction in funding; the reduction continues to future years."
In the High Desert, Victor Valley College is looking at a $2.9 million midyear cut if Proposition 30 fails. The budget will be cut to $42 million, down from $51 million at the beginning of the school year.

Read more: http://www.sbsun.com/ci_21833840/prop-30-failure-would-mean-enrollment-caps-fewer#ixzz2AAi5lw7m

Program gives college students a break on out-of-state tuition

While her classmates agonize over which college to attend, high school senior Samantha Morgan is passing up offers from Cal State campuses in Long Beach and San Jose. She is heading out of California to avoid overcrowded classes and other state budget problems.

And she can afford it thanks to a little-known program that offers discounts at public colleges and universities to students from 15 states, most of them in the West.

Morgan is taking advantage of the Western Undergraduate Exchange to enroll at Northern Arizona University this fall. Under the interstate agreement, she will pay $12,700 a year in tuition, compared with $20,800 for other out-of-staters at the Flagstaff campus. Her bill will be double California State University's nearly $6,000 a year, but she wants to graduate in four years and avoid delays that budget cuts are causing at California public universities.

"It definitely made a difference in where I was going to go," said Morgan, who attends Millikan High School in Long Beach. "It just made the decision easier."

She is part of a growing, although still relatively small, cadre of students in the program, which sets tuition at no more than 150% of in-state rates and saves undergraduates on average $7,700 a year. The arrangement is possible because, even in these tough economic times, some campuses in other states have more space at their universities and are happy to take in neighbors at less than full freight. In all, 150 public colleges — some two-year, some four-year — take part; only 10 are in California.

Last fall, 29,077 students took advantage of the tuition discount, up from about 22,100 four years before, in states from Alaska and Hawaii to North Dakota and New Mexico. The number of Californians has more than doubled in that time to 9,717 and now is 10 times larger than the number of residents of the other 14 states who come to California.

California "is a huge winner" in the program because it exports so many more young people than it receives, said Margo Colalancia, director of student exchanges at the nonprofit Western Interstate Commission for Higher Education in Boulder, Co., which runs the program. "This is a real relief valve for the state now."

For Californians, the most popular destinations are Northern Arizona University, the University of Nevada at Reno, the University of Hawaii at Manoa, Southern Oregon University and New Mexico State University. In California, 10 of the 23 Cal States have joined, with the Humboldt and Chico campuses attracting the most out-of-staters. University of California doesn't participate, no surprise since it has been pushing to add non-resident students who pay $23,000 a year more than California residents.

Such an exodus is not an answer to all the pressures facing public higher education in California, but this program and similar regional swaps in other parts of the country provide a benefit, according to Jerome A. Lucido, executive director of the USC Center for Enrollment Research, Policy and Practice.

"It is a valuable model at a time when some states like California are short on room at public campuses but have a lot of students, while other states have room and not enough students. In some ways it helps the nation educate more people and potentially at a lower cost," he said.

Some campuses limit the number of lower-paying students they accept, treating it as a scholarship for top students from other states. Some allow these students into only certain majors and departments. (The University of Arizona in Tucson, for example, opens up only mining engineering.) Some research-oriented campuses, such as the University of Colorado at Boulder and the University of Washington, haven't joined because, like UC, they already attract full-fare non-residents.

The program began in 1988; initially, Cal State's California Maritime Academy was the only school in the state to take part. As a result, about half the other states did not accept Californians. That changed after 2006, when other Cal States decided to join.

Cal State East Bay, for example, at first had plenty of room and liked the geographic diversity of the exchange students. Now in tighter economic times, the school still wants to stay in the program, which brings 67 out-of-staters to the Hayward campus, in part to help keep reciprocity alive for Californians who travel beyond the borders. "We see this as being a good citizen of California," said Greg Smith, a campus enrollment administrator.

Colalancia acknowledged that the Western Undergraduate Exchange remains somewhat unknown to many high school counselors and families. Its small staff has modest funds for marketing, which are shared with separate programs for graduate and health professional education, she said. Still, more efforts are in the works for staff to attend college fairs and to launch a social media campaign. A selling point is that students receive the discount regardless of family income.

"It's a great secret that a lot of people don't know about," said Becky Marchant, a counselor at Brea Olinda High school in Brea who is talking it up with her students. Marchant's own daughter turned down San Francisco State, fearing overcrowding there, and is part of the program as a freshman at Northern Arizona. Marchant and other counselors say they expect more Californians will participate if state budget problems make it harder for students to graduate in a timely fashion at UC, Cal State and community colleges here.

The only downside, Marchant said, is that California "is losing some great kids to out of state, and maybe a lot will come back after they graduate, but some will stay."

Recruiters for Southern Oregon University tell California students that they will have no trouble getting classes, unlike in UC and Cal State schools, said Jonathan Chavez Baez, an admission counselor. "Those are great institutions and are having difficult times. And we are not having those at our campus," he said.

This year, 629 Californians were enrolled there in the exchange, about 10% of the student body at the Ashland campus, officials said. The tuition under the program is about $10,000, half the usual out-of-state tuition, and is offered as a scholarship based on grades and test scores.

Northern Arizona University enrolls 2,147 Californians in the program, about 12% of its student body, and attracts them with its relative proximity, mountain setting and an additional promise that whatever tuition freshmen pay will not rise over their four years.

Jane Kuhn, Northern Arizona University's associate vice president for enrollment management and student affairs, said the campus receives benefits beyond the extra revenue. Out-of-staters also "add to the diversity of the student population and often have a positive impact on the overall quality of the student population," she said.

Headed to Northern Arizona is Chris Messina, a senior at Brea Olinda who wants to study political science or communications with the dream of becoming an officer in the U.S. Marine Corps. Not only does the tuition discount cut costs, he said, it also "gives students the idea that there is more out there than just California."

By Larry Gordon, Los Angeles Times April 22, 2012, 5:12 p.m.