News and Analysis


Pell Grants

The University is getting some tough love for its efforts to make a GW degree affordable.

The University landed on a public policy group’s “tough love” list this week for failing to enroll 17 percent of freshmen on Pell grants in 2011 or 2012. The Education Trust suggested that colleges who fail to meet the threshold should face federal funding cuts if they do not improve after three or four years, the Chronicle of Higher Education reported.

The group’s study comes as the White House prepares to roll out a rating system for all universities to spur improvements in financial aid and graduation rates.

“Goals without consequences won’t get the job done. Having real consequences for under-performing institutions that fail to meet those benchmarks helps ensure that our higher education system is serving students and the public good,” the study concludes.

Eight of the 14 universities GW considers its peers also landed on the list, including American, Georgetown, Duke and Northwestern universities.

At GW, 13 percent of freshmen received Pell Grants in 2011 and 12 percent in 2012, according to the group’s data, up from 9 percent in 2008. About 14 percent of GW students received aid from the federal program this year.

Associate Vice President for Financial Assistance Dan Small and Senior Associate Provost for Enrollment Management Laurie Koehler did not immediately return requests for comment.

The maximum Pell Grant award given during the 2013-14 academic year was $5,635, according the Department of Education.

After President Obama declared a “year of action” on college affordability in January, University President Steven Knapp launched a task force to focus on college access and success, making plans to send admissions staff to public D.C. high schools and host workshops on essay writing and applications.

The University’s financial aid pool grew by 3.6 percent to about $170 million for next year, though experts have questioned whether that is enough to make up for standard tuition increases.

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University President Steven Knapp at an event for the Confucius Institute in the fall. Erica Christian | Photo Editor

University President Steven Knapp at an event for the Confucius Institute in the fall. Erica Christian | Photo Editor

University President Steven Knapp will join about 140 higher education leaders at a White House summit Thursday to unveil new commitments to help low-income students attend and finish college.

The day-long event comes as President Barack Obama promotes plans to make college less expensive and easier to complete for low-income students. The University announced this afternoon that it will release its own affordability plans Thursday morning, along with dozens of other colleges that are on the closely-guarded guest list.

The White House has pitched several ideas to colleges already, encouraging them to set goals for increasing the number of Pell Grant-eligible students, create cohorts specifically for low-income students and improve science and engineering learning outcomes among low-income students.

Knapp has said he’s committed to lower college costs throughout his six-year tenure, increasing the percentage of students who receive Pell Grants from 9 percent to 14 percent over the last four years.

But GW has its own mixed record on college affordability. Its 2010-2011 sticker price tuition ($44,148) was the fourth-highest in the country, according to this year’s Department of Education report. But its net price ($27,793), which includes how much it gives out in financial aid, was lower than most of its competitors and other D.C. area schools.

Its average student debt (about $33,000) is higher than the national average. Only about 1.5 percent of students default on those loans though, which beats the national rate by a wide margin.

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President Barack Obama spoke earlier this month to a crowd of students in the White House's East Room, demanding that Congress come to an agreement. Obama said he was pleased with the Senate's agreement in a release sent Tuesday. Hatchet File Photo.

Just days before the July 1 deadline, Senate leaders said Tuesday they have reached an agreement to prevent the doubling of the student loan interest rate.

Senators of both parties are seeking to extend the current interest rate – 3.4 percent for new federally subsidized loans – for the next year.  The rate will double to the pre-recession level of 6.8 percent if no deal is reached before July 1.

“We’re very close to having everything done.  But until we get everything done, nothing’s done,” Senate Majority leader Harry Reid (D-Nev.) told reporters Tuesday.

To cover most of the $6 billion cost of keeping the lowered rate, senators proposed changes to federal pensions. Republicans also suggested limiting the time students can receive federally subsidized loans to six years.

The government estimates 7.4 million students receive this type of loan, and without a deal each would pay about $1,0o0 more in interest.

About 4,700 undergraduate students at GW received more than $30 million in education funding through Stafford loans this year.

Obama has demanded Congress come to an agreement, raising complaints by Republicans who say he is not helping with negotiations to grab attention of student voters.

The highly publicized debate has made headlines for months. This spring, Obama launched a two-day college tour focused on the student loan debate. In March, students nationwide signed more than 130,000 letters to Congressional leaders to protest the higher interest rates.

But as the deal takes shape, Mark Kantrowitz, founder and publisher of FinAid, points out that a rate hike would have little effect on the payments of individual students.

“This is a convenient tool for beating the drum of college affordability,” Kantrowitz said.

Kantrowitz said keeping the rate at 3.4 percent versus 6.8 percent translates into about a six-dollar difference in monthly payments for holders of subsidized loans.

Instead, more focus should be given to funding to Pell grants, Kantrowitz said, which provide need-based grants to low-income families.

“Certainly, those who get the benefit will like being able to get an additional cup of coffee or two a month, but it affects them only after they’ve already graduated,” Kantrowitz said, “What matters is how much money can you get for college and when do you have to start paying it back.”

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Rep. Virginia Foxx, R-N.C., sponsored the Academic Freedom in Higher Education Act, which the House of Representative passed Tuesday. | Courtesy of the office of Congresswoman Virginia Foxx

The House of Representatives passed a bill Tuesday to undo Department of Education regulations opponents called bureaucratic and burdensome.

The bill, H.R. 2117, would repeal two rules the Department of Education set for universities in 2010: The federal definition of a credit hour and a mandate for states to authorize colleges that operate within their boundaries.

Higher education activists denounced the increased costs the regulations would incur on universities trying to widen their online programs.

University spokeswoman Michelle Sherrard said the University would wait to see the bill’s significance as the Department of Education pushed back the deadline for colleges to comply with the rules until July 2014.

“We are monitoring the progress of the bill, but it is too early for us to speculate on its impact,” Sherrard said.

Universities like GW that participate in federal aid programs like Pell grants must comply with the regulations.

The bill, which was sponsored by Virginia Foxx, R-N.C., is unlikely to pass in the Senate.

“[The regulations] will stall the efforts in our country to make higher education more accessible and more affordable to everyone in the country,” Foxx said on the House floor Tuesday.

While the Higher Education Act of 1965 stipulates that states must give authorization for colleges and universities to operate there, the rule became cloudy with the rise of online learning.

Michael Lambert, executive director of the accrediting agency Distance Education and Training Council, said the states would use the regulations to gouge colleges for review fees.

He estimated that colleges would have to shell out $250,000 to $500,000 in licensing and curriculum review fees, as well as adding staff to check their compliance with regulations. He added that some states would look to gouge colleges for fees to

“It pushed a button and started a whole new cottage industry of certain states saying they assert the right to license a school that enrolls any citizen of their states. It used to be that states let sleeping dogs lie,” Lambert said. “This regulation encouraged states to become more aggressive and see this as a source of income for themselves.”

The University offers 60 degree and certificate programs that use a distance learning model. The Board of Trustees, the highest governing body at GW, allotted $2.3 million to develop mostly graduate-level online and hybrid programs in the GW School of Business and the College of Professional Studies this year.

GW’s graduate programs in business, education and nursing swept U.S. News & World Report’s inaugural list of top online-only programs in January.

Rep. George Miller, D-Calif., the leading Democrat on the House Education and the Workforce Committee, said repealing the regulations would allow colleges to inflate the number of credits and overcharge students.

“The bill before us today explicitly increases the risk of fraud, waste, and abuse in our federal student aid programs,” Miller said on the House floor. “At a time when the higher education market is in so much flux, with new kinds of programs popping up around the country and online, this is the wrong time to reopen this loophole.”

The Obama administration also opposed the bill.



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The debt deal passed by Congress and signed into law today will step up Pell Grant funding in exchange for putting federally subsidized loans for graduate students on the chopping block.

The Budget Control Act of 2011 will not touch President Barack Obama’s $5,550 maximum Pell Grant award per undergraduate student and pours $17 billion into the program’s funding by 2015, but cuts the federal subsidy that previously reprieved graduate students from accruing interest on their loans while still in school.

About 11 to 12 percent of GW undergraduates receive Pell Grant awards in their financial aid packages. Associate Vice President for Financial Assistance Dan Small said in February more than 1,390 students received Pell Grants this year.

Congressional Budget Office estimates show the new measures will boost direct spending by $7.4 billion over the next four years but ultimately reduce spending by $4.6 billion by 2021.

Beginning July 2012,  graduate students with subsidized loans will not receive subsidies on their interest, making the students accountable for interest that builds up while they are in school to trim government spending by about $21.6 billion by 2021, according to the CBO. The bill also prevents the Department of Education from incentivizing on-time repayment of loans through programs, such as one that offers partial rebates for certain fees students incur during the loan process.

Graduate students who make payments automatically debited from their bank accounts will still receive interest rate reductions.

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