Education Secretary Arne Duncan: Banks vs. Students

Education Secretary Arne Duncan: Banks vs. Students

Excerpted from today’s Washington Post (read the original article here).

Education Secretary Pushes to Revise Student Loan Practices

By Nick Anderson
Washington Post Staff Writer
Wednesday, February 10, 2010; A15

Education Secretary Arne Duncan on Tuesday urged the Senate to overhaul student lending, asserting that the banking industry has had “a free ride from taxpayers for too long” and that executives with lending giant Sallie Mae have enriched themselves as borrowers rack up college debt.

“Working Americans pay while bankers get rich,” Duncan said in a prepared statement. “Sallie Mae executives have paid themselves hundreds of millions of dollars in the last decade while teachers, nurses, and scientists — the backbone of the new economy — face crushing debt because of runaway college tuition costs.”

Duncan’s unusually pointed critique marked an escalation in the student loan debate as the Obama administration seeks to end a program that uses private lenders as middlemen for federally backed loans. The tone of the comments echoed President Obama’s recent populist rhetoric about the need to expand regulation of Wall Street.

In September, the Democratic-led House passed a bill, over strong industry and Republican opposition, that would mandate a switch to direct government lending. It would steer an estimated $80 billion in savings over the next decade to grants for needy students and other education initiatives. But the bill has stalled in the Senate as the Democratic majority seeks to circumvent a virtually certain Republican filibuster.

Opponents depict the bill as a government takeover that would squelch competition, diminish services to students and cost jobs. Sallie Mae, based in Reston, and other industry players are pushing an alternative that they say also would end government subsidies but preserve a role for private lenders in originating student loans.

John F. Remondi, Sallie Mae’s chief financial officer, said the lender shares Obama’s reform goals but wants to “enhance” the House-passed bill. Asked about Duncan’s comments, Remondi said: “Look, we don’t think name-calling helps in this process. The design of the future of this program should be debated fairly and openly.”

Sallie Mae estimates that its workforce would be cut from 8,500 to 6,000 if the House bill becomes law. The company said it is funding a radio advertisement in Indiana and Pennsylvania, which are home to some of its facilities, to raise questions about potential job losses under the bill.

Duncan blasted such ads.

“We want the American public to have full knowledge of what’s happening here, the reality,” he said in a telephone interview. Private lenders “have had a very sweet deal. . . . Our proposal is infinitely better for middle-class, working-class Americans.”

The federal student loan program, designed to provide a secure source of college funds for young borrowers, is more than 40 years old. Since the early 1990s, colleges have been able to choose between direct government lending and private lending with a government guarantee against default.

Private lenders have a larger share of the market, but in recent months many colleges have migrated toward direct lending. As of Dec. 31, the Education Department reported $30.9 billion in direct loans originated for the current school year, up from $19.2 billion the year before — a 61 percent increase. Federally guaranteed loan volume rose 6 percent in that time, the department reported, to $53.1 billion.

Sen. Tom Harkin (D-Iowa), chairman of the Health, Education, Labor and Pensions Committee, has not introduced his version of the measure passed by the House but has said he plans to move a bill “early this year.” Some Democrats have raised questions about the bill, even though most appear to support its broad goals.

Sen. Robert P. Casey Jr. (D-Pa.) has not endorsed the House legislation, according to spokesman Larry Smar, and is exploring alternatives. “There’s a whole host of things he likes in the underlying bill,” Smar said.

Rep. George Miller (D-Calif.), chairman of the House Education and Labor Committee, said, “It’s inconceivable to me that the Congress would continue unwarranted subsidies to these lenders.”

Foothill College Houses Center for Open Educational Resources

Few of us get to see our fondest dreams realized. This announcement, below, represents the culmination of years of effort by a small group of committed individuals who overcame what at times appeared to be insurmountable obstacles to push forward an idea whose time had come. The result promises to make a meaningful contribution to the Open Educational Resources (OER) movement, which is enabling the greatest expansion of access to a high-quality higher education in human history.

This newly-announced initiative is also, I think, a wonderful example of what can be accomplished through public service in a local elected office where ideas can more quickly become actions that lead to change, often far more readily than at the national level. You can read the unedited version of this press release here here.

Free & Open Textbooks at California Community Colleges Supported by New Center

Foothill College Will Manage the Center

February 08, 2010

Faculty at California community colleges now have a centralized source of information about how to use free and open textbooks to lower educational costs for their students. The newly established Open Educational Resources (OER) Center for California will save faculty from spending many frustrating hours on the Internet to find and use high-quality instructional materials on their own.

The California Community Colleges Board of Governors established the center as a statewide pilot program “to provide faculty and staff from community college districts around the state with the information, methods and instructional materials to establish open education resources centers” on their campuses. The pilot program is authorized by Assembly Bill 2261, which was authored by California Assemblyman Ira Ruskin (D-Los Altos) and signed into law in fall 2008.

“I was proud to have carried this bill with the Foothill-De Anza Community College District as the sponsor,” Ruskin said. “This legislation helps provide educators and students with free access to course materials available in the public domain. It makes education more affordable and graduation more attainable.”

The Open Educational Resources Center for California is committed to aiding educators in the state’s 112 community colleges in finding, using and developing the best and most affordable open learning materials to meet the needs of their students, said Judy Baker, Ph.D., director of the center and dean of distance and mediated learning at Foothill College…Baker has worked for the last decade at promoting high-quality open educational resources for use in community colleges, and has emerged as a national leader in the field.

Foothill College is managing the center under an agreement with California Community Colleges Chancellor’s Office. The contract started this January and runs through 2012.

“Foothill College was selected to establish the Open Educational Resources Center because it has already done groundbreaking work in this area and is in the best position to make this a success for California,” said California Community Colleges Chancellor Jack Scott, Ph.D….These digital learning materials are openly licensed or available in the public domain so that they can be used, shared or customized for classroom and laboratory use.

“There are many creative and dedicated faculty who are writing high-quality textbooks and making them available for anyone to use free of cost,” said Foothill College President Judy Miner, Ed.D. “It is particularly exciting to consider the potential for improving instruction in basic skills given the current and future needs in that area.”

In addition to affordability, other benefits of OER include the ability to rapidly and regularly update learning content and the convenience of digital delivery.

De Anza College student Maya Kostyuanovsky is one of thousands of community college students who’ve experienced the benefits of using open educational resources.

When asked about her experience using an open textbook for her statistics class at De Anza last year, Kostyuanovsky said, “I definitely would use more, if they were available. It worked really well for me. It was easy to hop online and do what I needed. There was nothing I couldn’t do. And it was great to be able to print what I needed and not have to drag along the whole heavy book.”

The Foothill-De Anza Community College District has been a state and national leader in textbook affordability efforts since 2004 when it established a district policy on sustainable learning resources that supports “the creation, use, accessibility and ongoing maintenance of public domain-based learning materials…to augment and/or replace commercially available educational materials, including textbooks where appropriate.”

“This news is exactly what our board wanted to see happen when we passed our first-in-the-nation higher education governance policy supporting the creation, use and improvement of learning materials that reside in the public domain,” said Hal Plotkin, the former president of the Foothill-De Anza Board of Trustees who initially proposed the public domain policy in 2003. “This is an important step toward modernizing our state-supported academic institutions to better serve students and our society during a time of profound economic stress and difficulty.” Plotkin currently serves as the senior policy advisor in the office of U.S. Undersecretary of Education Martha Kanter, Ed.D., former Foothill-De Anza chancellor.

The OER Center for California will partner with the Community College Consortium for Open Educational Resources and the Community College Open Textbook Collaborative to maximize the use of available open teaching and learning resources. Among the available resources are peer reviews of open textbooks and links to more than 400 open textbooks that may be suitable for community college use.

“Use of open educational resources is growing in California community colleges, but there is still a learning curve for faculty, staff and students.” Baker said. “The center is prepared to assist them in learning to make effective use of these materials free of charge.”

Among the center’s immediate plans is to establish an advisory group and develop a professional development course that introduces community college faculty, staff and course developers to open educational resources and how to use, create and produce open materials that can be offered to students in community college classes. The center also will create an OER information repository that will serve as a central source of knowledge about open educational resources in California community colleges, and provide colleges with tools to collect data about use of open educational resources on their campuses. That data will also be reported to the state chancellor’s office.

The center’s goals dovetail with those of California Governor Arnold Schwarzenegger’s digital textbook initiative to evaluate open textbooks for use in California’s K-12 public schools, and support similar efforts at the community college level. With 112 colleges and enrollments of 2.9 million students, California’s community college system is the largest higher education system in the United States. Some 24 percent of all community college students nationwide are enrolled at a California community college.

Readers of this blog should be aware that this accomplishment would not have been achieved were it not for the wise leadership of then-Foothill-De Anza Community College District Chancellor Martha Kanter, who led and guided these efforts and who currently serves in the Obama administration as Under Secretary of Education. Foothill College President Judy Miner also played an instrumental role in crafting the related FHDA board policy and then helped situate the new center at her college; also deserving credit and thanks are her highly-respected colleagues in the Foothill-De Anza community of scholars; Professor Barbara Illowsky, who provided the first free high-quality learning materials through this center; Dean Judy Baker, who guides the new center with excellence and distinction; and the FHDA board members who supported these new programs: Betsy Bechtel, Paul Fong, Bruce Swenson, Laura Casas-Frier and Andrea Leiderman. Nor would it have been possible without the early and generous support provided by the William and Flora Hewlett Foundation and its visionary OER champions Cathy Casserly, who is currently a Senior Partner at the Carnegie Foundation for the Advancement of Teaching and Learning, and Marshall (Mike) Smith, who ran the Hewlett Foundation’s education program before agreeing to become the senior counselor to the Secretary of Education, Arne Duncan.

About the Author /

My published work since 1985 has focused mostly on public policy, technology, science, education and business. I’ve written more than 600 articles for a variety of magazines, journals and newspapers on these often interrelated subjects. The topics I have covered include analysis of progressive approaches to higher education, entrepreneurial trends, e-learning strategies, business management, open source software, alternative energy research and development, voting technologies, streaming media platforms, online electioneering, biotech research, patent and tax law reform, federal nanotechnology policies and tech stocks.