Another take on the U. of California fee increases

I published an op-ed in the San Francisco Chronicle today, outlining why the fee increases imposed by the UC regents was the right decision.  The op-ed was based on my earlier blog post on the topic.  There was an opposing piece written by the former admissions director at UC Berkeley, as well as two other op-eds. You can see all of them in the Chronicle's Sunday Insight section.

I weigh in on the Pittsburgh tuition tax proposal

Story on the local CBS affiliate this evening: "Tuition Tax in State College?". If you have trouble with the video player, you can read a transcript here.

Sallie Mae's hypocrisy

The Chronicle of Higher Education a couple of weeks ago had an article (sorry, but you have to be a Chronicle subscriber to access the full article on-line) about a grass roots campaign being conducted by our friends at Sallie Mae.  Turns out that they had a little problem with part of SAFRA, the Student Aid and Fiscal Responsibility Act passed by the House earlier this fall and waiting now to be taken up by the Senate.  Which part of the legislation did they not like?  The part that, in the words of the House Education and Labor Committee:

Converts all new federal student lending to the stable, effective and cost-efficient Direct Loan program. Beginning July 1, 2010, all new federal student loans will be originated through the Direct Loan program, instead of through lenders subsidized by taxpayers in the federally-guaranteed student loan program.

Not surprising that Sallie Mae didn't agree with this provision, since a good portion of its business comes from originating federally-guaranteed student loans.

So according to the Chronicle article, the leadership of Sallie Mae went out and exhorted their workers to collect signatures on petitions to be sent to Congress, asking them not to shut down the Federal Family Education Loan (FFEL) program.  Now we could all have a long and engaging debate about FFEL versus Direct Loans, but that's a discussion to be had another day.  The point here is to discuss Al Lord, Sallie Mae's CEO, and yes, the same Al Lord who earned $225 million from 1999 through 2004.  That's an average of $45 million per year for those of you who are too lazy or unable to do the math.  I should note here that Al Lord is an alumnus of Penn State, has received numerous awards from the university, and has also been a generous donor with some of the money he's earned from Sallie Mae.

The article describes how Lord attended a rally held in Fishers, Indiana, home of a Sallie Mae facility with 1,600 employees, including 100 loan originators whose jobs are on the line if the Senate passes its version of SAFRA.  At the rally, Lord was quoted as saying, "There's Washington, and then there's the rest of the country.  This is the rest of the country."

The implication here is that the big, bad Congress represents Washington, and scrappy, fighting Sallie Mae represents the "rest of the country."  But Sallie Mae is as ingrained in Washington as almost any entity in America.  It started out as a federally-chartered enterprise with the mission of originating and servicing student loans.  In the 1990s, it began conversion to a private corporation, and has since grown to be one of the country's largest financial services companies, listed on the New York Stock Exchange.

Sallie Mae is also one of the biggest lobbyists and contributors to Congressional campaigns in the financial aid industry in Washington.  A few quotes about its lobbying activities:

"Sallie Mae spent $3.4 million lobbying last year, according to the Center for Responsive Politics. It also showered campaign contributions on individual members of Congress, including $26,150 for Rep. Paul Kanjorski of Pennsylvania, chairman of the House Financial Services Commitee and a key Democratic ally, and $10,000 on moderate 'Blue Dog' Democrats" (Chronicle, 7/30/09).

"Sallie Mae has always been generous to the lawmakers it supports. In the current election cycle, from January 1999 through the end of July, Sallie Mae's PAC has contributed $145,100 to Republican Congressional candidates and $98,093 to Democrats. In contributing to Congressional leaders, Sallie Mae is bipartisan. For example, while Sallie Mae provided $6,500 to the G.O.P. House leadership, it has given $11,000 to the chamber's Democratic leaders" (Chronicle, 8/11/00).

"Sallie Mae, the nation's largest student-loan company, spent $2-million on lobbying in the first half of this year" (Chronicle, 7/30/09).

"Sallie Mae spent $2.3 million in the first half of 2007 to lobby Congress, the White House, the Education Department, and the Government Accountability Office, according to a disclosure form filed with the Senates public records office" (New America Foundation, Higher Ed Watch, 11/30/07)

"Banks and other entities in the student-loan industry reported spending about $5.7 million [in 2005], led by Sallie Mae’s $1.46 million" (Inside Higher Ed, 12/21/06).

So for Al Lord to imply that Sallie Mae is "the rest of the country" is just a bit facetious.  Sallie Mae is as intertwined with Washington as is the United States Congress.  It has every right to lobby to protect its interests, but it shouldn't be hypocritical in doing so.

Radio show on paying for higher education

I was a guest this morning, along with the president of Shippensburg University, on "Radio Smart Talk" on WITF, the public radio station in Harrisburg.  Here's a description of the show from the WITF website:

Pennsylvania's four state-related universities -- Penn State, Pitt, Temple, and Lincoln -- are still awaiting almost $700 million in funding from the state.  That money is being held up by the legislature who has yet to put the final touches on the state budget...The broader conversation is how Pennsylvania state-related and state owned universities are funded to begin with.  Tuitions are higher at Pennsylvania's public colleges than in most states and the universities say that's because the state provides a smaller level of funding.  In fact, the College Board said last month that Pennsylvania's four-year public universities are the fourth most expensive for tuition and fees in the country.  Should the state be providing more funding or do the universities have to find ways to more drastically cut costs?

 Here's a link to a stream of the show.