2016 MILLENNIAL MEMO (May 18, 2016)
And we’re back! One primary down, one to go. We’re 60 days until Cleveland, 67 days until Philadelphia, and 173 days until Election Day. I’ll keep this brief — there is a lot to catch up on in this week’s bulletin. Please share this week’s edition, encourage your colleagues to sign up for updates, and follow us on Twitter here.
PREVIEWING TRUMP’S HIGHER ED PLAN: Inside Higher Ed’s Scott Jaschik scored a rare interview with Trump campaign co-chair and policy advisor, Sam Clovis, who outlines the candidate’s plans to fix higher education. If you haven’t already, you’ll want to read this in full. Of note from the piece: “While final decisions have not been made on when the ideas will be formally unveiled, not to mention many details worked out, Clovis said the Trump campaign expects higher education to be a major issue in the fall general election.”
BURLINGTON COLLEGE TO SHUT DOWN, BLAMES DEBT INCURRED FROM LAND ACQUISITION UNDER FORMER HEAD JANE SANDERS: “Burlington College, the small Vermont institution led by Jane Sanders from 2004 to 2011… announced on Monday that it will shut down later this month, facing insurmountable financial difficulties… Many of the school’s financial difficulties date to Sanders’s tenure as president… In announcing the closure, the school blamed the ‘crushing weight of the debt’ from the purchase of a new campus in 2010, during Sanders’s tenure… The land was 33 acres on the shores of Lake Champlain. Ironically, the diocese was selling the land at the time because it was cash-strapped. The purchase was huge—especially for a school whose annual budget didn’t crack $4 million. Jane Sanders plan was to bet big. To finance the deal, Burlington issued tax-free bonds, took a $3.5 million loan from the diocese, and received a $500,000 bridge loan from Tony Pomerleau, a wealthy local real-estate developer and close friend of the Sanderses. But the land deal proved to be a white elephant.” (The Atlantic, May 15, 2016)
CLINTON ENDORSES NEW CFPB FORCED ARBITRATION PROPOSAL, WHICH WOULD CHECK ABUSES BY STUDENT LOAN LENDERS: “Hillary Clinton endors[ed] the Consumer Financial Protection Bureau’s plan to ban mandatory arbitration provisions in credit card and bank contracts… The regulation would allow more people to take their credit card and loan complaints to court as class action lawsuits, rather than being forced to argue their cases individually in front of closed arbitration panels. ‘With [this] proposal, the Consumer Financial Protection Bureau takes aim at yet another unfair practice on Wall Street,’ Clinton said. ‘Mandatory arbitration clauses buried deep in contracts for credit cards, student loans, and more prevent American consumers from having their day in court when they’ve been harmed.’” (Money, May 5, 2016)
TRUMP UNIVERSITY “COACH” STEERED PITTSBURGH WOMAN INTO PONZI SCHEME: “Melissa Norris of Franklin Park said she is still trying to recover from the huge financial hit she took… In 2007, she spent $17,248 for a Trump University seminar in Florida….Cary Beagley, of Utah, was her coach. … She trusted Beagley because of Trump, who at the time said of Trump University’s teachers: ‘These are all people that are hand-picked by me.’ She said when Beagley told her to put her money into a company called Safevest, she did it. Eventually, she invested $230,000. But just six months later, the SEC called Safevest a fraud and a Ponzi scheme and won a court order shutting it down. Safevest ended up bankrupt, and Norris lost all her money. ‘I lost a lot of money because I trusted this organization and… I will not get anything back,’ she said… In 2011, three years after Norris lost her money, the state of Utah filed securities fraud charges against Beagley. He was accused of taking $150,000 [from pupils] who, like Norris, he coached in Trump University-licensed seminars… In 2008, she sued Trump University and Beagley in Allegheny County, but her case was thrown out because of a clause requiring her to arbitrate any dispute in Utah. …But Trump attorney Jill Martin said Trump University and Trump ‘did not ever hire Beagley or engage him as a contractor.’ So she said Trump University had no knowledge of Beagley’s criminal history.” Watch the full segment here. (WTAE, May 16, 2016)
GOV. MARTINEZ CALLS FOR REFORMS TO INCREASE COLLEGE GRAD RATES: “New Mexico Gov. Susana Martinez still is pushing higher education reforms aimed at increasing college graduation rates. The Republican on Monday told New Mexico college and university administrators at the National Hispanic Cultural Center in Albuquerque that they should work toward limiting degree paths to 120 credit hours. She also wants them to consider new ways at helping high school graduates who aren’t ready for college… She told administrators at a higher education summit that universities needed to increase counseling efforts and reduce undergraduate degree programs to 120 hours.” (Santa Fe New Mexican, 5/9/2016)
CALIFORNIA–SANCHEZ & HARRIS CALL FOR EXPANDING PELL GRANTS & FREE COMMUNITY COLLEGE: In a recent U.S. Senate debate at University of the Pacific, both Congresswoman Loretta Sanchez and Attorney General Kamala Harris called for increasing the value of Pell Grants and making community college free. Harris touted her experience cracking down on for-profit Corinthian Colleges, which she alleged engaged in predatory practices, while Congresswoman Sanchez said that [the government] should be working closer with “for-profit colleges who are doing a good job to train people up.” Catch the full higher education section of the debate starting at 22:20 here.
OHIO–PORTMAN HITS STRICKLAND FOR CUTS HE MADE TO HIGHER ED AS GOVERNOR: Sen. Rob Portman (R-OH) continued running into the issue of higher education in his Senate race by releasing this new :60 second spot. The ad’s narrator says: “As governor, Ted Strickland cut funding for colleges and universities, reversing his promise to freeze tuition and driving up costs for students and parents.” The ad goes on to tout that the campaign has 30 Students for Portman groups at colleges and universities across Ohio.
IOWA & NEW HAMPSHIRE–GRASSLEY & AYOTTE JOIN BIPARTISAN GROUP ASKING TREASURY & IRS FOR CLARITY ON REFI OPTIONS FOR STUDENT LOANS OFFERED BY NONPROFIT LENDERS: In a letter to Treasury Secretary Jack Lew & IRS Commissioner John Koskinen, Senators Chuck Grassley & Jack Reed — joined by 16 other Senators, including Kelly Ayotte — asked for “[clarity] that nonprofit lenders can use tax-exempt bonds to refinance student loans will expand the pool of lenders offering refinancing of student loans. The members praised prior agency action in clarifying that such options are available and sought removal of remaining specific barriers to make even more students and their families potentially eligible for refinancing student debt at lower interest rates via tax-exempt bonds.”
ILLINOIS–DUCKWORTH DROPS “IN THE RED” BILL IN THE HOUSE: “U.S. Rep. Tammy Duckworth and congressional leaders are pushing a measure to help make college costs more affordable, according to a news release. The In the Red Act proposal calls for increasing Pell Grants, investing in community colleges and enabling more people to refinance student debt at lower interest rates. Duckworth introduced it in the House [at the end of last month]… A provision in the proposal would give 9.2 million students an additional $1,300 in grant funding to pay for college costs… ‘Sen. Kirk shares the concerns of parents and students in making college more affordable, which is why he has supported expanding grants for students and authored legislation that would create innovative tax-free savings accounts,’ said Kevin Artl, Kirk’s campaign manager in response to Duckworth’s proposal.” (Daily Herald, April 28, 2016)
NEVADA–CORTEZ MASTO CHIDES HECK FOR VOTING TO CUT TO PELL GRANTS: “‘You just have to look at his voting record. He has voted against Pell grants. He has not worked to address the issue of college affordability,’ [Democratic candidate for U.S. Senate Catherine Cortez Masto] charged, pointing to [her opponent Rep. Joe] Heck’s vote on the last budget, which Democrats say would eliminate mandatory funding for Pell grants and freeze spending at their current levels. The Heck campaign says the Republican, who is still paying off his medical school loans, supports making college more affordable. ‘He worked to pass bipartisan, landmark legislation reforming and capping student loan interest rates for students and parents. Dr. Heck also introduced a bill to make the financial aid process easier for families, so more students can access the assistance they need to pursue higher education,’ Heck’s spokesperson, Brian Baluta, said in a statement to News 3.” (News3LV, April 26, 2016)
NEW HAMPSHIRE–HASSAN HIGHLIGHTS JOBS & HIGHER ED INITIATIVES IN STATE OF THE STATE MESSAGE: “[Gov. Hassan] outlined a new plan, Gateway to Work, which uses existing federal funds to help Granite Staters succeed in the workforce. ‘With this new initiative, we have the opportunity to help those on… state programs move into jobs that pay sustainable wages — lessening their need for public assistance.’ The program, she said, will involve more partnerships between the community college system and the business community to create apprenticeship programs in high-need areas such as advanced manufacturing, information technology networking, and health care. The state will provide employers with job-training grants and salary support for eligible workers for six weeks. ‘This will help ensure that workers can get a fair shot at a new career, while providing businesses with the workforce that they need to grow and thrive,’ Hassan said. Other measures include expanding after-school and summer youth employment programs for young people, including apprenticeships and on-the-job training.” (Conway Daily Sun, May 5, 2016)
NEW HAMPSHIRE–NH YOUNG DEMS TAKE AIM AT AYOTTE OVER STUDENT DEBT: Last week, “the New Hampshire Young Democrats held an anti-Ayotte rally on the University of New Hampshire campus focusing on the student loan issue. The group geo-targeted Facebook ads to the UNH campus and posted Snapchat photos of themselves and Thompson Hall filtered with mock chains, entitled ‘Lifetime of Debt.’” (WMUR, 5/10/2016)
NORTH CAROLINA–BURR UNVEILS NEW COLLEGE SAVINGS BILL: “The Boost Saving for College Act introduced by [Senators] Burr and Casey would help families pay for rising college costs, but it does not deal directly with the rates at which the costs are rising. Rather, the bill would create several ways that families could save for college or use unused savings for certain other purposes. Among its provisions: It would establish a tax credit of up to $2,000 for savings placed in 529 accounts, similar to the tax credit linked with retirement accounts[;] Employers could match an employee’s college-related contribution with a tax-deductible amount of up to $1,000[;] Families could roll unused college savings into retirement accounts, and [;] Families with disabled children could roll 529 account savings into an ABLE account. In this case, the money could be used for the cost of raising the children if they do not go to college. ‘The Boost Act is a common-sense bill that will expand ways for families to save and prepare for college so that they don’t have to rely so much on debt to get a college education,’ Burr said… [Burr’s opponent, Deborah] Ross supports 529 accounts, according to campaign spokesman Cole Leiter. Ross told the Winston-Salem Journal two weeks ago that she supports refinancing student loan debt, cracking down on private for-profit colleges that don’t have accreditation and providing initial free community colleges. In addition, Ross’ campaign aides highlighted several votes that she cast … Ross voted to extend a state income-tax deduction for families who use the deduction to save for college, according to Leiter.” (Winston-Salem Journal, 5/2/2016)
WISCONSIN–JOHNSON & BALDWIN SQUABBLE OVER STUDENT LOAN REFINANCING: “Baldwin is pushing legislation in the Republican-controlled Senate that would allow people with student debt to refinance their loans through the federal government… Johnson opposes more government involvement. ‘We already have dozens of programs that lower loan payments, tie things to income,’ he said. ‘There’s a recent Treasury Department study that showed of students who default on their loans, 70 percent qualified for one of these loan payment reduction programs. Some of them result in actual debt payment after 20 years or even 10 years.’ Baldwin addressed Johnson’s statement, and said the federal government needs to do something. ‘The idea of Republicans criticizing granting students the right to refinance their loans is actually limiting them, not expanding opportunities,’ she said.” (FOX 11, 5/1/2016)