Hazard Herald
March 23, 2005
Ella Strong ranked in top 26 in nation
Hazard Community and Technical College’s Ella Strong has been named among
the 26 top professionals in the nation for the 2005 David R. Pierce Faculty
Technology Award.
The award is sponsored by Cisco Systems Inc. and the American Association of
Community Colleges (AACC). Margaret Rivera, vice president with AACC, said the
competition was very keen. “Because of the many wonderful nominations received
this year, the review process was challenging but also inspiring to the reviewers
as they read about the commitment and excellence demonstrated by community college
faculty,” Rivera stated.
The commitment and excellence shown by Mrs. Strong at HCTC include her work
as faculty division chair for Business and Information Technology.
“Hazard Community and Technical College is indeed fortunate to have Ella
as a technology leader and champion at your college. You should be very proud,”
wrote Rivera.
Mrs. Strong supports Internet and Distance Learning initiatives by teaching
classes on Kentucky’s Virtual University and by encouraging the faculty
in her division to teach Internet, web local, or web enhanced classes. She most
recently accepted the challenge of serving as the chair of the internal fund
raising campaign at the college.
Mrs. Strong, professor of Information Technology, received her master’s
of science degree in Computing Technology and Education from Nova Southeastern
University.
Her commitment to excellence and achievement were honored in 2004 when she
was named the No. 1 faculty member in the state by the Kentucky Community and
Technical College System (KCTCS) with the New Horizon award which included an
all-expense paid trip to Austin, Texas to attend a national conference and $1,000
cash.
Dr. Jay K. Box, president/CEO at HCTC, said, “Both of these awards for
Ella Strong demonstrate how truly fortunate we are to have someone with such
technology skills working at our college. Ella is a dedicated employee and our
students, and community as a whole, benefit from her accomplishments and dedication.”
Mrs. Strong and her husband, Johnny Strong, have three children—Megan,
Malissa, and Britt. They live in Perry County.
The Chronicle of Higher Education
March 28, 2005
Combatants Alter Tactics in Fight Over Student-Loan Consolidation
With interest rates expected to rise in July, loan industry pushes
for change this year
A looming increase in the interest rates that borrowers must pay on federal
student loans is forcing the combatants in a fierce fight on Capitol Hill to
reconsider their tactics.
The battle, which has been raging in Congress for the past two years, is over
the future of a government program that allows borrowers to refinance their
student loans. No other student-aid issue has been as contentious as lawmakers
consider legislation to extend the Higher Education Act, the law that governs
most federal student-aid programs.
On one side of the debate are the Republican leaders of the U.S. House of Representatives
Committee on Education and the Workforce. They have been pushing a proposal
that would change how the interest rate is calculated for student-loan borrowers
who consolidate their debt. The government, they say, has made the federal loan-consolidation
program too attractive to borrowers -- and too costly to taxpayers -- by allowing
borrowers to lock in low, fixed interest rates for up to 30 years. Instead,
the legislators have pushed a proposal, championed by the student-loan industry,
that would shift the rate to one that varies from year to year based on market
conditions but is capped at 8.25 percent.
On the other side are the panel's top Democrats, as well as student advocates
and companies that specialize in refinancing loans. They argue that Congress
should not make it harder for borrowers to repay their loans when so many students
are buried in debt.
The debate has been occurring at a time when the consolidation program is more
popular than ever. In order to lock in interest rates of about 3.5 percent for
the life of their loans and save thousands of dollars each, borrowers consolidated
about $44-billion worth of loans in 2004, almost four times as much as in 2000.
But in July, interest rates on student loans are expected to rise for the first
time in five years. The Congressional Budget Office projects that the rate will
jump by at least two percentage points, to about 5.5 percent, and will continue
to grow for the foreseeable future. That change could significantly alter the
terms of the debate. "This is no longer going to be such a black-and-white
issue," says John Dean, a lawyer for the Consumer Bankers Association,
which supports a shift to a variable rate.
Rising Rates
As rates rise, it will become increasingly difficult for Democrats and their
supporters to argue solely for the fixed-rate option. They acknowledge that
borrowers who wish to consolidate their loans will be worse off if they have
no other choice but to lock in higher interest rates.
With that in mind, student advocates and consolidation-company officials are
shifting their stance. Having the government offer variable-rate loans is not
a bad idea, they say, as long as it also maintains a fixed-rate option for borrowers.
"People should be able to choose the option they want," says Alik
Widge, an advocate for the National Association of Graduate-Professional Students.
"Chances are they will be able to figure out which one fits their needs
better."
At the same time, the prospect of rising rates threatens to undercut the Republicans'
central argument for making the shift: that it is too expensive for the government
to continue to offer fixed-rate consolidation loans. As interest rates grow,
the savings that the government would see from shifting to a variable rate diminish.
That is because the government makes up the difference to lenders when interest
rates exceed those which borrowers have locked in. As more and more borrowers
lock in higher rates, the amount that the government must make up for these
loans shrinks.
As a result, loan-industry officials are scrambling to get the proposal on
a faster-moving vehicle than the reauthorization bill, which is unlikely to
be completed this year. Lenders hope that lawmakers will consider making the
change as part of "budget reconciliation" legislation -- a measure
in which legislators propose cuts in federal mandatory programs, such as Medicare,
Social Security, and student loans, to reduce the government's budget deficit
-- if Congress moves forward with that process this year.
"Given the availability of large savings from moving to a variable rate
as soon as possible," Mr. Dean says, "we would hope that Congress
would explore that option."
Seeking a Compromise
With the dispute in Congress over the consolidation program heating up, some
lawmakers and college groups have offered proposals designed to find a compromise.
(See table below.)
The one with most promise has been floated by Rep. Thomas E. Petri, a Wisconsin
Republican. Under that plan, borrowers would be given the option of consolidating
with a fixed or a variable rate, capped at 8.25 percent. The fixed rate would
be indexed to a longer-term Treasury instrument that would produce a higher
rate than borrowers pay now. In fact, those who refinance would almost always
pay less if they chose a variable rate.
Borrowers are in the best position to know what type of plan works for them,
Mr. Petri says. He wants to model the consolidation program on the mortgage
market, where borrowers must pay a little more to lock in an interest rate and
have the advantage of knowing what their monthly payments will be.
"I believe that most citizens would be comfortable having similar choices
when refinancing their student-loan obligations," he says.
The plan has won the backing of some of the major loan-consolidation companies.
Those officials, who until now fought almost exclusively to save the fixed rate,
acknowledge that their position has evolved. Given the "economic conditions
we are likely to see in the future, we think the opportunity to choose between
fixed and variable consolidation-loan interest rates should be given to borrowers,"
says Jim Newell, vice president of government relations for Collegiate Funding
Services.
Members of groups representing graduate and professional students are also
likely to support the congressman's plans, as they have made a similar proposal.
Mr. Petri says that both Republican and Democratic lawmakers have expressed
interest in his plan. With the change in the way the fixed rate is calculated,
and another provision that eliminates some "excess earnings" of lenders,
Mr. Petri says his plan would produce as much, or even more, savings for the
government than the provision in the House bill. The Congressional Budget Office
has not yet estimated the cost of Mr. Petri's plan.
But requiring borrowers to pay more for a fixed-rate loan may be a deal killer
for groups that lobby for undergraduate students.
Kate L. Rube, higher-education adviser to the State Public Interest Research
Groups, says her organization supports giving borrowers who seek to refinance
the choice of a fixed or a variable rate, but doesn't want to see the terms
become less generous. "We shouldn't go backwards in terms of the benefits
borrowers are receiving now," she says.
The student groups would also like to see the cap on variable-rate loans reduced
to 6.8 percent.
Still, student advocates' primary goal is to preserve the fixed-rate option,
says Jasmine Harris, the legislative director for the United States Student
Association: "It's a great benefit for borrowers."
Time Running Out
For loan-industry officials there is no more important goal this year than
to get Congress to shift how the rate is calculated.
They have argued that the billions of dollars that the government provides
in subsidies each year to keep the costs of fixed-rate consolidation loans cheaper
for borrowers would be better spent giving more benefits to current and future
students.
But they also have another motive. Sallie Mae and other large lenders have
lost a significant share of the refinancing market to consolidation companies.
In large part, they are seeking to have lawmakers prevent borrowers from getting
fixed-rate consolidation loans so that refinancing would be less appealing.
They hope that the change would force these companies out of the market.
The lenders know that they have to act fast. The Congressional Budget Office
has estimated that shifting to a variable rate this year would save the government
$2-billion. But as rates rise, the amount of savings plummets. By 2008 the government
would actually lose money by making the change.
Loan-industry officials are trying to persuade legislators to look to the consolidation
program for savings as part of the budget-reconciliation process. If that were
to happen, colleges and students would benefit also, they say.
That is because, they say, the leaders of the House education committee are
depending on savings from the loan programs to offset the costs to the government
of other proposals in their reauthorization bill that would help students, such
as an increase in the amount they are allowed to borrow in their first two years
of college and a cut in the origination fees they must pay to obtain their loans.
If lawmakers move ahead with reconciliation this year, but don't look to the
consolidation program for savings, they will have to make other cuts to the
loan programs. That could leave the education committee's leaders empty-handed.
"Anything that can be done to minimize the impact of reconciliation on
reauthorization needs to be explored," says Mr. Dean, of the Consumer Bankers
Association.
But opponents of the proposed change say the issue should be dealt with in
reauthorization, where lawmakers have more time to engage in substantive policy
discussions.
"Policy considerations are ideally the basis for making program changes,
as opposed to the need to cut programs for budgetary reasons," says Mr.
Newell, of Collegiate Funding Services. "The results are always better
for students."
Inside Higher Education
March 28, 2005
Borrowing More, Earning More
The 1990s saw a significant increase in borrowing by students to finance their
college educations. But many students were protected — last least during
the last decade — from large debt burdens because starting salaries for
college graduates were also increasing at a large rate.
Those are the findings of a report released Friday by the National Center for
Education Statistics.
The report compared borrowing by students who graduated from college in the
1992-3 and 1999-2000 academic years, and also the financial status of those
starting to repay loans the year after graduation. During the period between
the time the two cohorts in the study graduated, the report noted, the cost
of college rose faster than inflation and Congress moved to increase the limits
on how much students could borrow.
Not surprisingly, those shifts resulted in significant increases in the percentage
of graduates who had borrowed. In 1992-3, 49 percent of graduates had student
loans, and the average debt for those who borrowed was $12,100 (in 1999 constant
dollars). In 1999-2000, 66 percent of graduates had student loans and the average
debt for those who borrowed was $19,400.
The researchers then looked at the debt burden that this borrowing placed on
the new graduates — a year after graduation. Debt burden was defined as
the monthly loan repayment as a percentage of monthly income. And despite the
significant increase in borrowing, the debt burden increased only marginally.
Using 2001 constant dollars, the researchers found that the first cohort, a
year after graduation was making monthly payments that averaged $170, or 6.7
percent of their monthly income. The second cohort was making monthly payments
that averaged $210, or 6.9 percent of their monthly income.
The report said that increases in starting salaries protected the second cohort
of students. But the report warned that the debt burden could pose a much more
serious problem to students who take jobs with lower than average salaries,
or in periods in which new graduates have more difficulty finding jobs that
pay well.
The report also compared borrowing trends by students’ race and ethnicity.
Among the findings: in the first cohort, the average debt of white graduates
exceeded that of black graduates. But that had reversed by the time of the second
cohort.
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