Education

Over the last 40 years, collective bargaining by teacher unions has had an enormous impact on public education.  And while there continues to be debate whether teachers are fairly compensated, salaries and benefits for teachers have increased over the last four decades while student academic achievement remains flat.  Historically, teacher unions have been successful in their vehement opposition to placing weight on student academic performance in teacher evaluations. Yet students in right to work states, where collective bargaining is not required, are out performing their union-educated peers.  Additionally, teacher unions have been successful in maintaining tenure policies, which allow poorly qualified teachers to remain in the classroom, affecting student performance not only while in school but also after they graduate.

First and foremost our thoughts and prayers are with all those in the Capitol Hill and Philadelphia communities. 

Later today President Obama will hold a campaign-style White House event about student loan interest rates, which are set to change on July 1.

There is good news: In a positive sign of bipartisanship, both the White House and House Republicans agree that rates should be tied to financial markets. As I have written, shifting to market based rates would “simplify the federal student loan programs, all while removing government bureaucracy from the rate-setting process.”

Once again as college students celebrate graduation, Congress finds itself grappling with the now annual debate over student loan interest rates. Both the House and Senate introduced bills to address the pending interest rate change, but only the House bill provides a long-term budget conscious fix.  The House’s proposal, which looks similar to the president’s, sets borrower interest rates in line with market rates. This shift to market based rates would:

Proposal Would Save Students Up to $1,413 Over the Life of Their Loan; Save Taxpayers $4 Billion Over Next Decade 

The 2009 switch to direct student lending, billed as a means to bolster student financial aid spending by eliminating private sector ‘middlemen,’ has not only failed to produce the anticipated savings, it has cost taxpayers billions of dollars and shifted billions more onto the federal balance sheet, forcing the Department of Treasury to borrow money to keep the program afloat. 

Senator Elizabeth Warren made waves in higher education circles recently by introducing legislation that would set federal student loan interest rates at the same rate available to financial institutions through the Federal Reserve.   Her populist invocation of the ‘big bank’ mantra to defend changes in student loan policy is reminiscent of the 2010 Health Care and Education Reconciliation Act – the same legislation passed by her colleagues that relied on students to help pay for the President’s health care proposals.

After months of delay and blowing past the legal requirement that the President submit a budget request to Congress in February of each year, the White House has finally released a budget blueprint for fiscal year 2014 and beyond.

 On Friday of last week the President released his annual economic report, a 456-page report full of the same rhetoric that dominated the President’s reelection campaign.  According to the President’s report, the economy is on stable footing, federal budgets have been slashed, and millions of people are enjoying health care coverage for the first time.  Aside from making many of these same dubious statements the President has made previously, his report also simplifies higher education policy into o

Over a year ago, noted economist Robert Reischauer penned a letter to Congress expressing concern over the use of fair value accounting to measure the costs of the federal direct loan program.  In his letter, his logic is inconsistent, his arguments are inaccurate, and his conclusions are dead wrong.  That letter was referenced once again in a hearing before the House Committee on Education and the Workforce yesterday, warranting a reprise of why Dr. Reischauer has it wrong on fair-value accounting: