Bacon's Rebellion

Democracy Thrives in Sunlight

Is There Enough Helicopter Money to Save Higher Ed?

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by

James A. Bacon
in


by James A. Bacon

How much money are Virginia colleges and universities getting in federal COVID-relief helicopter dollars? More than $294 million, according to data published by OpenTheBooks in Forbes. The biggest winners are Virginia’s big public universities — George Mason University, Virginia Commonwealth University, and Virginia Tech foremost among them — but Liberty University, a private nonprofit, and Ecpi, a private for-profit, made the top ten as well.

The money will surely help higher-ed institutions, many of which have felt compelled to partially refund tuition revenue, and all of which are terrified how continued emergency shutdown measures will impact fall enrollments and tuition revenue. Many smaller, private institutions were facing enrollment crises even before the pandemic struck.

But will it be enough? While the funds surely will be welcome, they will fall far short of offsetting lost revenue at many institutions. VCU has said it faces a loss of $50 million, while the College of William & Mary has projected a shortfall of $3 million to $32 million.

I show the top 15 recipients above and the rest below.

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83 responses to “Is There Enough Helicopter Money to Save Higher Ed?”

  1. Nancy_Naive Avatar
    Nancy_Naive

    University of Illinois engineering and business schools had a lot of Chinese students. When Trump was elected, they feared a trade war or similar problems would kill their cash cow, and they crafted an insurance policy with Lloyd’s to protect against a loss with premiums of 425,000/yr.

    Apparently, it triggered to the tune of $30,000,000

  2. LarrytheG Avatar
    LarrytheG

    I, for one, think the way the Feds have done the money is nothing short of idiocy.

    We talk about Richmond and what it should do or not – wait or take action now but clearly on the Fed side – panic ensued and despite all the talk in years past of fiscal discipline for those claiming to have such credentials, it all went out the window – and the tales of who got money who shouldn’t have are legion.

    At this point – there is little pretence – they’re just blowing money like it’s cannon fodder…

    I’m sure at some pont – the two sides will get back to finger pointing.

    And just funny – those who are pilloring Northam say that it’s different because he has to “balance” his budget and the Feds do not.

    really? that’s the excuse?

  3. djrippert Avatar
    djrippert

    Virginia needs a wealth tax. On endowment wealth. Why should UVa get a penny of federal helicopter funding when it is sitting on a $9.5B endowment? Those funds are earmarked for specific purposes you say? Well the US Constitution has been usurped during this “crisis”. Seems like a small step to “un-earmark” 25 – 50% of all endowment dollars and cut state funding to higher education.

    Never waste a crisis.

    1. Nancy_Naive Avatar
      Nancy_Naive

      An ESTATE TAX. Dynastic wealth is killing this country.

      Well, lemme ‘splain UVa. In the 1970s state schools, including UVA, received large amounts of the operating costs from the state. Then, one of the political parties thought it would be better if the schools started endowments and increased tuition to cover expenses. UVA was good at it.

      1. LarrytheG Avatar
        LarrytheG

        e.g. supply side economics…

        1. Nancy_Naive Avatar
          Nancy_Naive

          UVA receives 6% of its operating costs from the State. 6%. And for that they have to put up with the crap like that which the McDonnell administration heaped on them, i.e., ideology.

          If they had half a brain, they’d negotiate an outright purchase, arrange the necessary loans at 0% practically, buy out the state, and dump the governor screwing with their BoV.

          1. LarrytheG Avatar
            LarrytheG

            absolutely unacceptable! It would deprive the critics of their gawd-given right to _itch and moan about worthless liberal institutions… sucking on the taxpayer teat!

            They would take away their very reason to exist!

          2. James Wyatt Whitehead V Avatar
            James Wyatt Whitehead V

            I think UVA would be better off on their own. An enormous institution like UVA could chart a better course to serve it’s mission without the state. VPI is another school that might accomplish more if the institution was untethered from the state.

          3. LarrytheG Avatar
            LarrytheG

            I actually agree – but the critics themselves are opposed to that.

            Without putting words in their mouths, they think it is the duty of UVA and VPI to be schools “open” to all Virginians of all walks of life and that’s the arrangement with the state funding.

            They want the “hook” of state funding to use to force those institutions to change more to their liking but it’s just not going to happen.

          4. Izzo Avatar
            Izzo

            Well, UVA gets more general fund appropriations per student than all other Virginia public colleges and universities except Norfolk State and Virginia State.

        2. djrippert Avatar
          djrippert

          Probably worked. Why should the state financially support adults (called UVa students) who will graduate and earn far more than Virginia’s median income for the 45 years after they graduate? Loan them money? Fine. Give them taxpayer funds? Wow, talk about welfare for the (soon to be) rich.

          1. Nancy_Naive Avatar
            Nancy_Naive

            Because, they will collect way more in future income tax on the higher earnings of a college graduate then the tuition they collect in four years. But, I digress.

          2. LarrytheG Avatar
            LarrytheG

            Who is “they” and is “they” collecting taxes and tuition?
            not following the shorthand……..

      2. djrippert Avatar
        djrippert

        Now the other party is in power an it’s time to start reversing the errors of the past. Drain the swamp and drain the endowments. Those donations to the endowments were made tax free. Time to pay up.

        All inheritance money should be taxable to the recipient at ordinary income rates. The deceased may have already paid taxes on that money but the recipient has not. Again, tax ALL inheritance. All money. The family farm. Everything.

        There should also be a limit on untaxed charitable donations. Like $500 per year. Why should people like Bill Gates and Warren Buffet be able to set up parallel government agencies tax free? They should pay their taxes and then use what’s left for whatever Masters of the Universe plots they want.

        As for UVA in the 1970s – I was there. Graduated in 1981. Great school but I still remember “The University” bumper stickers. Arrogance is a hallmark of everything in Virginia.

        1. Nancy_Naive Avatar
          Nancy_Naive

          OMG. A man after me own heart! Less likely to produce worthless third generation crap like Jared, GW, and even a few Kennedys (to keep the Republicans happy).

          The US can be reasonable when it comes to taxes. A few years back, I got curious as to what and how many Americans were cashing in and emigrating (Turns out 5% of those leaving were in the top 1%. Tell you something?)

          I was wondering what the “exit tax” was like. Some countries make a serious grab.

          The US says, “Okay, you can go. Just pay long term capital gains tax on the whole thing.” The argument is that you started with nothing so it’s all a gain.

          I cannot understand why they do not realize the same logic applies to Mommy’s and Daddy’s money too.

          CNU ’76 & W&M ’81. On my own ticket.

        2. TBill Avatar
          TBill

          Actually some might have made money by donating…by giving appreciated stocks and other techniques, some of those practices were just recently thwarted by the Trump TCJA.

          Making money in some cases where the states give tax credits for donating, and the same “donation” could then get deducted on Fed taxes.

  4. djrippert Avatar
    djrippert

    Virginia needs a wealth tax. On endowment wealth. Why should UVa get a penny of federal helicopter funding when it is sitting on a $9.5B endowment? Those funds are earmarked for specific purposes you say? Well the US Constitution has been usurped during this “crisis”. Seems like a small step to “un-earmark” 25 – 50% of all endowment dollars and cut state funding to higher education.

    Never waste a crisis.

    1. Nancy_Naive Avatar
      Nancy_Naive

      An ESTATE TAX. Dynastic wealth is killing this country.

      Well, lemme ‘splain UVa. In the 1970s state schools, including UVA, received large amounts of the operating costs from the state. Then, one of the political parties thought it would be better if the schools started endowments and increased tuition to cover expenses. UVA was good at it.

      1. LarrytheG Avatar
        LarrytheG

        e.g. supply side economics…

        1. djrippert Avatar
          djrippert

          Probably worked. Why should the state financially support adults (called UVa students) who will graduate and earn far more than Virginia’s median income for the 45 years after they graduate? Loan them money? Fine. Give them taxpayer funds? Wow, talk about welfare for the (soon to be) rich.

          1. Nancy_Naive Avatar
            Nancy_Naive

            Because, they will collect way more in future income tax on the higher earnings of a college graduate then the tuition they collect in four years. But, I digress.

          2. LarrytheG Avatar
            LarrytheG

            Who is “they” and is “they” collecting taxes and tuition?
            not following the shorthand……..

        2. Nancy_Naive Avatar
          Nancy_Naive

          UVA receives 6% of its operating costs from the State. 6%. And for that they have to put up with the crap like that which the McDonnell administration heaped on them, i.e., ideology.

          If they had half a brain, they’d negotiate an outright purchase, arrange the necessary loans at 0% practically, buy out the state, and dump the governor screwing with their BoV.

          1. LarrytheG Avatar
            LarrytheG

            absolutely unacceptable! It would deprive the critics of their gawd-given right to _itch and moan about worthless liberal institutions… sucking on the taxpayer teat!

            They would take away their very reason to exist!

          2. James Wyatt Whitehead V Avatar
            James Wyatt Whitehead V

            I think UVA would be better off on their own. An enormous institution like UVA could chart a better course to serve it’s mission without the state. VPI is another school that might accomplish more if the institution was untethered from the state.

          3. LarrytheG Avatar
            LarrytheG

            I actually agree – but the critics themselves are opposed to that.

            Without putting words in their mouths, they think it is the duty of UVA and VPI to be schools “open” to all Virginians of all walks of life and that’s the arrangement with the state funding.

            They want the “hook” of state funding to use to force those institutions to change more to their liking but it’s just not going to happen.

          4. Izzo Avatar
            Izzo

            Well, UVA gets more general fund appropriations per student than all other Virginia public colleges and universities except Norfolk State and Virginia State.

      2. djrippert Avatar
        djrippert

        Now the other party is in power an it’s time to start reversing the errors of the past. Drain the swamp and drain the endowments. Those donations to the endowments were made tax free. Time to pay up.

        All inheritance money should be taxable to the recipient at ordinary income rates. The deceased may have already paid taxes on that money but the recipient has not. Again, tax ALL inheritance. All money. The family farm. Everything.

        There should also be a limit on untaxed charitable donations. Like $500 per year. Why should people like Bill Gates and Warren Buffet be able to set up parallel government agencies tax free? They should pay their taxes and then use what’s left for whatever Masters of the Universe plots they want.

        As for UVA in the 1970s – I was there. Graduated in 1981. Great school but I still remember “The University” bumper stickers. Arrogance is a hallmark of everything in Virginia.

        1. Nancy_Naive Avatar
          Nancy_Naive

          OMG. A man after me own heart! Less likely to produce worthless third generation crap like Jared, GW, and even a few Kennedys (to keep the Republicans happy).

          The US can be reasonable when it comes to taxes. A few years back, I got curious as to what and how many Americans were cashing in and emigrating (Turns out 5% of those leaving were in the top 1%. Tell you something?)

          I was wondering what the “exit tax” was like. Some countries make a serious grab.

          The US says, “Okay, you can go. Just pay long term capital gains tax on the whole thing.” The argument is that you started with nothing so it’s all a gain.

          I cannot understand why they do not realize the same logic applies to Mommy’s and Daddy’s money too.

          CNU ’76 & W&M ’81. On my own ticket.

        2. TBill Avatar
          TBill

          Actually some might have made money by donating…by giving appreciated stocks and other techniques, some of those practices were just recently thwarted by the Trump TCJA.

          Making money in some cases where the states give tax credits for donating, and the same “donation” could then get deducted on Fed taxes.

  5. LarrytheG Avatar
    LarrytheG

    There’s always been great frustration over Higher Eds “finances”. This is an opportunity to find out more and it’s also an opportunity for those who would give aid – to require higher levels of transparency in exchange for the aid.

    But the big thing is that the standard on-campus College experience is pretty much gone and little chance of it coming back this year and my bet is that some of it won’t come back at all or in a LITE version.

    There has never been a shortage of ways to get an education and yet people would invariably pick the most expensive, least cost-effective way so that they could get that “college experience”.

    Interestingly enough – the folks who are demanding that K-12 “open up” have been mostly silent about Higher Ed… what gives?

  6. LarrytheG Avatar
    LarrytheG

    There’s always been great frustration over Higher Eds “finances”. This is an opportunity to find out more and it’s also an opportunity for those who would give aid – to require higher levels of transparency in exchange for the aid.

    But the big thing is that the standard on-campus College experience is pretty much gone and little chance of it coming back this year and my bet is that some of it won’t come back at all or in a LITE version.

    There has never been a shortage of ways to get an education and yet people would invariably pick the most expensive, least cost-effective way so that they could get that “college experience”.

    Interestingly enough – the folks who are demanding that K-12 “open up” have been mostly silent about Higher Ed… what gives?

  7. James Wyatt Whitehead V Avatar
    James Wyatt Whitehead V

    Higher education will survive one budget cycle at this rate.

  8. James Wyatt Whitehead V Avatar
    James Wyatt Whitehead V

    Higher education will survive one budget cycle at this rate.

  9. Steve Haner Avatar
    Steve Haner

    Must be an election this year. Oh, there is. Will Virginia Beach Theological Seminary be taking that in cash or a check? (I’m telling you, the COVID boodle is just starting to flow….)

    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      Hey, this is nothing. What I like best is the tax break for millionaire real estate investors that was tucked into the $2 trillion COVID-19 relief and stimulus package. https://www.washingtonpost.com/business/2020/04/14/coronavirus-law-congress-tax-change/

      As Mr. Rippert likes to say: Never waste a crisis!

      1. LarrytheG Avatar
        LarrytheG

        indeed:

        ” More than 80 percent of the benefits of a tax change tucked into the coronavirus relief package Congress passed last month will go to those who earn more than $1 million annually, according to a report by a nonpartisan congressional body expected to be released Tuesday.

        The provision, inserted into the legislation by Senate Republicans, temporarily suspends a limitation on how much owners of businesses formed as “pass-through” entities can deduct against their nonbusiness income, such as capital gains, to reduce their tax liability. The limitation was created as part of the 2017 Republican tax law to offset other tax cuts to firms in that legislation.

        The provision has fueled criticism by congressional Democrats and some tax experts who have called it a giveaway to the wealthy and real estate investors, who frequently face large losses on their investments. Conservatives have said enacting the limitation was a mistake in the 2017 law and suspending it gives badly needed liquidity during the economic downturn caused by the coronavirus pandemic by reducing their tax obligations.

        What’s in the $2.2 trillion coronavirus Senate stimulus package

        An analysis by the JCT found suspending the limit overwhelmingly benefits higher earners. About 82 percent of the benefits of the policy go to about 43,000 taxpayers who earn more than $1 million annually. Less than 3 percent of the benefits go to Americans earning less than $100,000 a year, the analysis found. The analysis included the impact of another tax change in the coronavirus relief legislation that allows firms to write off 100 percent rather than 80 percent of their losses, reversing another change in the 2017 tax law.

        Hedge-fund investors and owners of real estate businesses are “far and away” the two prime beneficiaries of the change, said Steve Rosenthal, a tax expert at the Tax Policy Center, a nonpartisan think tank.”

        and we fret about the bad ideas of the Dems in Virginia! good googly moogly

        Haner should just love the idea that his kids and grandkids are funding these GOP millionaires…

        1. TooManyTaxes Avatar
          TooManyTaxes

          And how much tax did the Tax Policy Center pay? How much more tax money would we have if every nonprofit that lobbies or tries to influence public policy/opinion had to pay taxes? Businesses cannot deduct lobbying expenses. Why should nonprofits be treated differently?

          And I would have limited COVID-19 relief to companies and colleges/universities that cut their CEO pay to no more than the President and for their other officers to no more than SEC scale. That alone would prevent big entities from getting bailouts.

          1. LarrytheG Avatar
            LarrytheG

            re: ” Businesses cannot deduct lobbying expenses.”

            are you sure about that?

          2. TooManyTaxes Avatar
            TooManyTaxes

            It was in Bill Clinton’s first tax bill.

            “Nondeductible lobbying and political expenditures are described in Code section 162(e), and include expenditures paid or incurred in connection with:

            “Influencing legislation;

            “Participating or intervening in any political campaign on behalf of (or in opposition to) any candidate for public office;

            “Attempting to influence the general public with respect to elections, legislative matters, or referendums; and

            “Any direct communication with a covered executive branch official in an attempt to influence the person’s official actions or positions.”

            https://www.irs.gov/charities-non-profits/other-non-profits/nondeductible-lobbying-and-political-expenditures

            It’s time to slice the power of non-taxed nonprofits.

          3. Reed Fawell 3rd Avatar
            Reed Fawell 3rd

            The most powerful, partisan and radical political operative, cartel really, in State of Virginia is its “non profit” University of Virginia.

  10. Steve Haner Avatar
    Steve Haner

    Must be an election this year. Oh, there is. Will Virginia Beach Theological Seminary be taking that in cash or a check? (I’m telling you, the COVID boodle is just starting to flow….)

    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      Hey, this is nothing. What I like best is the tax break for millionaire real estate investors that was tucked into the $2 trillion COVID-19 relief and stimulus package. https://www.washingtonpost.com/business/2020/04/14/coronavirus-law-congress-tax-change/

      As Mr. Rippert likes to say: Never waste a crisis!

      1. LarrytheG Avatar
        LarrytheG

        indeed:

        ” More than 80 percent of the benefits of a tax change tucked into the coronavirus relief package Congress passed last month will go to those who earn more than $1 million annually, according to a report by a nonpartisan congressional body expected to be released Tuesday.

        The provision, inserted into the legislation by Senate Republicans, temporarily suspends a limitation on how much owners of businesses formed as “pass-through” entities can deduct against their nonbusiness income, such as capital gains, to reduce their tax liability. The limitation was created as part of the 2017 Republican tax law to offset other tax cuts to firms in that legislation.

        The provision has fueled criticism by congressional Democrats and some tax experts who have called it a giveaway to the wealthy and real estate investors, who frequently face large losses on their investments. Conservatives have said enacting the limitation was a mistake in the 2017 law and suspending it gives badly needed liquidity during the economic downturn caused by the coronavirus pandemic by reducing their tax obligations.

        What’s in the $2.2 trillion coronavirus Senate stimulus package

        An analysis by the JCT found suspending the limit overwhelmingly benefits higher earners. About 82 percent of the benefits of the policy go to about 43,000 taxpayers who earn more than $1 million annually. Less than 3 percent of the benefits go to Americans earning less than $100,000 a year, the analysis found. The analysis included the impact of another tax change in the coronavirus relief legislation that allows firms to write off 100 percent rather than 80 percent of their losses, reversing another change in the 2017 tax law.

        Hedge-fund investors and owners of real estate businesses are “far and away” the two prime beneficiaries of the change, said Steve Rosenthal, a tax expert at the Tax Policy Center, a nonpartisan think tank.”

        and we fret about the bad ideas of the Dems in Virginia! good googly moogly

        Haner should just love the idea that his kids and grandkids are funding these GOP millionaires…

        1. TooManyTaxes Avatar
          TooManyTaxes

          And how much tax did the Tax Policy Center pay? How much more tax money would we have if every nonprofit that lobbies or tries to influence public policy/opinion had to pay taxes? Businesses cannot deduct lobbying expenses. Why should nonprofits be treated differently?

          And I would have limited COVID-19 relief to companies and colleges/universities that cut their CEO pay to no more than the President and for their other officers to no more than SEC scale. That alone would prevent big entities from getting bailouts.

          1. LarrytheG Avatar
            LarrytheG

            re: ” Businesses cannot deduct lobbying expenses.”

            are you sure about that?

          2. TooManyTaxes Avatar
            TooManyTaxes

            It was in Bill Clinton’s first tax bill.

            “Nondeductible lobbying and political expenditures are described in Code section 162(e), and include expenditures paid or incurred in connection with:

            “Influencing legislation;

            “Participating or intervening in any political campaign on behalf of (or in opposition to) any candidate for public office;

            “Attempting to influence the general public with respect to elections, legislative matters, or referendums; and

            “Any direct communication with a covered executive branch official in an attempt to influence the person’s official actions or positions.”

            https://www.irs.gov/charities-non-profits/other-non-profits/nondeductible-lobbying-and-political-expenditures

            It’s time to slice the power of non-taxed nonprofits.

          3. Reed Fawell 3rd Avatar
            Reed Fawell 3rd

            The most powerful, partisan and radical political operative, cartel really, in State of Virginia is its “non profit” University of Virginia.

  11. LarrytheG Avatar
    LarrytheG

    I don’t think the helicopter “boodle” will save higher ed as we know it.

    The money will buy them some small amount of time – to twist in the wind – to delay what is going to happen anyhow.

  12. LarrytheG Avatar
    LarrytheG

    I don’t think the helicopter “boodle” will save higher ed as we know it.

    The money will buy them some small amount of time – to twist in the wind – to delay what is going to happen anyhow.

  13. Nancy_Naive Avatar
    Nancy_Naive

    University of Illinois engineering and business schools had a lot of Chinese students. When Trump was elected, they feared a trade war or similar problems would kill their cash cow, and they crafted an insurance policy with Lloyd’s to protect against a loss with premiums of 425,000/yr.

    Apparently, it triggered to the tune of $30,000,000

  14. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Higher Education now confronts a very real and deep financial crises. Many institutions will not survive without Federal and state monies. Linked in below is a just competed study suggesting ways to reform these institutions as part of the rescue package. Here is brief sample of study’s Introduction:

    NAS

    April 20, 2020

    Introduction

    The 2020 coronavirus pandemic has already transformed higher education. Classrooms, laboratories, faculty offices, libraries, stadiums, and dormitories stand empty. In their place, colleges and universities have implemented online distance learning.

    We hope that truly valuable parts of higher education, such as the shared pursuit of liberal learning in an actual classroom, will be restored. But the path to that restoration will be difficult. The cost of the shutdown to colleges and universities is enormous and still growing. An unprecedented financial crisis for American higher education lies ahead.

    In response to that crisis, colleges and universities have announced a variety of cost-cutting measures. Generally, these include salary freezes, hiring freezes, limits on purchases, furloughs of many employees, and lay-offs of untenured faculty members. In a few cases, college presidents and other executives have taken salary cuts. The higher education establishment doesn’t expect these measures will be enough. They’re counting on additional federal and state bailouts to stay afloat.

    The National Association of Scholars (NAS) believes that some such bailout will be necessary. However, NAS also believes that legislators and regulators should tie bailout funds to reforms that address long-standing problems in American higher education. Colleges and universities can do better than just return to the status quo ante.

    For far too long, American higher education has exploited the hopes of students and their families, as well as the goodwill of legislators and the American public. Millions of Americans have been plunged deeply into insupportable debt in order to fund huge increases in college administrative costs over the last 30 years. Administrative positions, including non-instructional staff, now consume more than 50% of higher education payroll costs.1 At the same time, colleges and universities offer a trivialized curriculum marked by animosity to America. Our country deserves much better—and we can get it.

    NAS recommends that legislators require colleges and universities that want emergency federal and state financial support to adhere to two principles:

    1. They must significantly reform their unsustainable finances, above all by immediately reducing administrative overhead by 50% or more.

    2. They must adhere to American principles of freedom and avoid activities that threaten the American national interest.

    The Shutdown

    Inaction is not an option. We must act quickly.

    The shutdown has cost colleges and universities billions of dollars and will cost a great deal more. Amherst College estimated on April 4 that the shutdown would cost it $10 million. Pennsylvania’s 14 public universities together face $70 million to $100 million in losses for the spring closure. Oregon’s public universities project they will suffer at least a $100 million “loss in revenue in the current quarter due to campus closures and cancellation of college events including sporting competitions.” In Wisconsin, university system “officials conservatively estimate the revenue losses and additional costs related to the pandemic will tally roughly $170 million for the spring semester alone.” According to the Chronicle of Higher Education, “The University of California absorbed $558 million in unanticipated costs in March alone due to the coronavirus.”

    In March, Moody’s Investors Service downgraded “the credit outlook for the higher education sector to negative.”

    Higher education possesses several sources of revenue. The largest is generally tuition, room, and board. Other sources include research grants, donations, and, in some cases, endowments. State universities derive support from legislative appropriations. Colleges and universities also generally secure favorable terms for bonds and other forms of borrowing.

    The coronavirus pandemic, the shutdown, and the decline in the stock market have imperiled every one of these revenue streams. If nothing else changes, American higher education is hurtling toward a cliff.

    Pre-Existing Conditions

    Higher education’s financial crisis will get worse even if the shutdown ends soon. Colleges and universities already faced a demographic slump before the crisis. Many colleges reported that they failed to meet their fall 2019 enrollment targets. Enrollments peaked in 2011 at over 20 million, and fell to 18 million by fall 2019, when 231,000 fewer students than the year before showed up.

    Post-crisis, even fewer students will enroll. The American Council on Education (ACE) sent a letter to the US Congress on April 9 that projected a decline of “15% for fall 2020—including a 25% decline in international student numbers—and an expected revenue loss for institutions of US $23 billion.”

    No university’s contingency plan covers losses of this magnitude. The higher education establishment expects that the federal government will step in with a massive bailout, far beyond the $14 billion it received in March 2020 in the CARES Act’s initial stimulus package.

    Co-Morbidity

    Unfortunately, colleges and universities have given legislators and the American public many reasons to doubt that such funds would be well-spent:

    Although administrative costs absorb more than 50 percent of higher education payroll costs, colleges and universities have absolutely refused to touch the vast apparatus of “services” that have sent costs skyrocketing in the last twenty years. With few exceptions, our colleges and universities steadfastly preserve the jobs of every diversity dean, resentment studies professor, microaggression counselor, and “social justice” bureaucrat.
    Meanwhile, every objective test reveals that college admissions standards have collapsed and the quality of college education has plummeted. The Organization for Economic Cooperation and Development rates the United States among the lower half of developed countries on its tests in math, reading, and science. One widely cited study, employing the Collegiate Learning Assessment, showed that 45 percent of tested students showed no significant gains in critical thinking, complex reasoning, or writing over the course of four years of collegiate study. Every assessment documents that courses have gotten easier. College students spend half the number of hours studying that students did a generation ago, while grade inflation has sent student grade point averages so high as to make the scale meaningless. Discouraged academics have written a small library of in-depth examinations of this educational decline—including, most recently, the acute analysis that NAS scholar John M. Ellis provides in The Breakdown of Higher Education (2020).
    Students are mired in debt for college loans they cannot repay. Colleges and universities reap the benefits of those funds and bear none of the costs.
    Colleges and universities routinely violate students’ and faculty members’ intellectual freedom, trample on their due process rights, and promote programs that advance anti-American ideology and political activism.
    Finally, many colleges and universities give pride of place in admission to foreign students, who pay full tuition. More than a third of these students come from the People’s Republic of China, many of them with Communist Party family connections. In addition, many colleges and universities, despite their huge taxpayer subsidies, subvert American immigration law to admit, employ, and give “sanctuary” to illegal aliens.

    Economist and NAS board member Richard Vedder aptly summarizes the state of affairs in higher education: “In past crises institutions of higher education could count on tremendous support from the general public: people paying taxes which subsidize universities, making private donations, and paying tuition charges. Colleges are going to pay a heavy price for the contempt they have shown in recent years towards American values—the First Amendment, a strict adherence to the rule of law, etc.”

    Revival

    On April 15, President Trump announced the “Great American Economic Revival Industry Groups.” These include many sectors of the American economy, such as agriculture, banking, construction, defense, energy, financial services, food & beverage, healthcare, hospitality, manufacturing, real estate, retail, tech, telecommunications, transportation, and sports. Higher education was conspicuous by its absence.

    Its exclusion from the list makes good sense. The higher education sector has shown little willingness to put its house in order—even after substantial prodding from the Trump Administration.2 No amount of money can revive our colleges and universities until it does.

    NAS believes that higher education can do far better. Therefore, we offer the following proposals.

    NAS Proposes

    The President and Congress should demand that higher education cut administrative overhead by 50 percent as a minimum condition for any further bailout funds.

    Colleges and universities that ask for financial assistance must commit themselves to ending run-away costs and diversions from serious academic purpose. Nothing is more wasteful and extravagant than the growth in administration.

    The rest of this document outlines NAS’s framework for allocating bailout funds among colleges and universities that have made these cuts. Our framework draws in part from our larger education agenda, the Freedom to Learn Amendments.

    The first half of our framework reflects basic economic priorities:

    No bailout funds should go to the wealthiest colleges that have endowments sufficient to ride out this storm.
    No bailout funds should support the salaries or benefits of administrators or non-academic support staff, whose numbers have proliferated at the expense of faculty and whose “co-curriculum” seeks to replace teaching with indoctrination.
    Any bailout should reward institutions that uphold academic rigor, reform abuses of “community-service” work-study, encourage productive experimentation with distance learning, deliver liberal arts instruction to community college students, provide valuable vocational education, and excel in offering low tuition.

    Congress should put students first by reforming student debt lending practices and by ensuring that colleges and universities share the burden of students’ financial choices.

    The second half of our framework reflects America’s foundational principles. America’s colleges and universities should:

    Sign an intellectual freedom charter.
    Respect due process in all investigatory and disciplinary proceedings—especially those involving grave charges, such as accusations of sexual misconduct.
    Commit themselves to promoting First Amendment rights and intellectual diversity.
    Prioritize practical disciplines critical to American national security.
    Limit foreign dependence, particularly on countries such as China that have demonstrated hostility to American interests.
    Support American immigration laws by prohibiting illegal aliens.

    Colleges and universities only deserve taxpayer support if they control their runaway spending and support American principles.

    A Beginning

    Attaching conditions to a bailout fund is only a partial solution. Colleges and universities depend far more on Title IV student loans and grants, as well as on research grants from a wide variety of federal agencies. The wealthiest universities, such as Harvard with its $40+ billion endowment, scarcely need to worry about bailout money—although some have already received it. Harvard itself actually received $8,655,748 in the initial CARES bailout. Harvard ultimately returned that sum to the federal government, but only under extreme political pressure. Congress can only restore higher education to good health by reforming the Higher Education Act as a whole, as well as the rules governing colleges’ eligibility to receive federal research grants.

    Reform on that scale will take years. Establishing conditions on bailout funds can be completed quickly. These will provide a model for more far-reaching legislation—as well as demonstrate that such reform can be put into practice. Enacting reform tied to coronavirus relief is the most practical way toward achieving the ultimate goal of structural reform of higher education.

    1. Basic Economic Priorities
    1.1. No Bailout for Wealthy Colleges

    Just as Congress means-tested the emergency funds for individual Americans, to make sure money reaches people in true financial need, no emergency higher education bailout funds should go to the 100 private colleges and universities with the largest endowments, each of which has an endowment of more than $600 million. Federal support for student education should be channeled to colleges that lack the resources of our wealthiest colleges.

    1.2. No Bailout for Administrators

    Large colleges and universities, with student bodies of more than 1,000, should cut their administrative overhead by 50 percent as a condition of receiving bailout funds. Small colleges, with student bodies of 1,000 or less, should cut their administrative overhead by 10 percent. Additionally, Congress should forbid the use of any emergency relief money to pay for the salaries and benefits of college administrators and support staff, including those with in-class teaching responsibilities occupying one-third or less of their time. Congress should provide incentives, in the form of bonus relief funds, to institutions that submit budget plans to reduce their administrative expenses by 70% or more, with the largest bonuses going to institutions proposing the deepest administrative cuts. Any university that fails to execute these cost reductions will be required to repay the bonus. The Department of Education should formulate a rigorous definition of “administrative expenses,” to ensure that colleges and universities comply with Congressional intent.

    1.3. Require Academic Rigor

    Remedial courses—that is, pre-college-level courses offered by a college or university—should not count toward an academic degree or for college credit. No college that awards credit for remedial courses should be eligible for bailout funds.

    1.4. Community-Service Work Study Reform

    Currently, colleges and universities are required to reserve 7% of their federal work-study funds for “community service”—which, all too often, means forwarding “social justice,” i.e., progressive political activism. The Department of Education and Congress should either eliminate this set-aside or limit it to forms of community service that will directly help America endure and recover from the coronavirus epidemic.3

    1.5. Distance Learning

    Congress’ March 2020 bailout allocated its funds only by counting students who didn’t study exclusively online. The higher education establishment inserted this requirement to harm for-profit colleges, but it has also damaged nonprofit colleges that have innovated by providing exclusively online education.

    Distance education isn’t a panacea for higher education. It may always work better for some disciplines than for others. Done badly, it makes it too easy for students to slack and to cheat. Done properly, with rigorous final examinations that confirm students have acquired substantial amounts of knowledge, it holds great promise. With proper legislative support, distance education may grow to become a large and valuable component of American higher education.

    Congress should support good-faith experimentation by higher education institutions to deliver thorough, cost-effective instruction over the Internet. It should work to lower the institutional barriers that prevent such good-faith experiments from thriving. Indeed, given that the government favors “social distancing,” distance education may be a uniquely useful form of higher education for the duration of the pandemic.

    Coronavirus bailout funds should be allocated to for-profit and nonprofit institutions by a formula that gives equal weight to students who study exclusively online.

    1.6. Community Colleges

    Congress should direct substantial amounts of relief funds to community colleges, which provide the backbone for the democratic promise of American higher education. These relief funds should include support for liberal arts instruction, which was never meant to be reserved for a wealthy elite. Coronavirus bailout funds should provide payroll support dedicated to faculty in community colleges.

    1.7. Vocational Education

    Congress should provide targeted assistance for vocational education by offering payroll support for faculty. This payroll support should give priority to faculty who teach courses leading to degrees for vital careers such as medical assistant, dental assistant, pharmacist, cybersecurity technician, laboratory technician, fireman, and police officer. Congress should also provide targeted assistance for apprenticeships in these vital careers.

    1.8. Encourage Low Tuition

    Congress should offer additional bonus relief funds to institutions that have total student charges, including tuition and all fees, in the bottom ten percent of their institutional category. (“categories of institutions” as defined in 20 U.S.C. §1161m.) Colleges and universities that have held tuition increases to less than 1 percent per year for five years previous, or which sign a federally drafted pledge not to increase tuition for the next five years, should also be eligible for funds.

    2. Put Students First

    Congress should provide generous direct support for American students, and not just indirect support to colleges and universities. In the current system, students bear the risk of borrowing money against their future earnings to pursue degrees that often prove to have little value. The colleges and universities that offer these low-value degrees accept the borrowed money but none of the risk. This is wrong. America’s colleges and universities, which until now have benefitted from federal higher education support without sharing any of the risks or costs, should also help students both by helping them pay off their college loans and by assuming partial responsibility for student loan defaults.

    This support should be crafted to ensure that it benefits students who combine the greatest need and the greatest ability to succeed. Taxpayer support should also focus on helping students whose future careers will provide the greatest contribution to America’s national interest.

    2.1. Delayed Student-Loan Repayments

    The Education Department has already provided short-term relief for student loan repayments. It should provide longer-term relief at once, rather than simply extending relief a month or two at a time. The Education Department should immediately freeze student loan repayments, including interest accrual, until January 1, 2021.

    2.2. Student Loan Buyback Program

    Congress should mandate that colleges and universities that accept bailout funds establish a student loan buyback program to purchase Stafford Loans from lenders and replace them with new loans at a capped interest rate of no more than 1% a year. Colleges and universities must finance this program at a level equal to at least 10% of the coronavirus bailout funds that they receive. Student eligibility for the buyback program will be limited to borrowers who have successfully completed a financial literacy program and who have graduated from college with a GPA of 3.0 or higher. Colleges and universities should prioritize student loan buyback for faculty, professionals, and students in areas critical to national security, such as the biomedical sciences, medical schools, military science, nursing, and engineering.

    2.3. College Aid to Student Loan Defaulters

    Congress should mandate that students at colleges and universities that accept bailout funds will be allowed to discharge their debts into bankruptcy, if the student graduated at least seven years previously and currently is a member of a family/household in poverty, as defined by the Health and Human Service poverty guidelines.4 These colleges and universities will be required to accept responsibility for 30% of loans (including accruing interest) defaulted on by students at their institution, to be repaid to lending institutions over a 20-year period.

    2.4. Focus Student Aid on Genuine Need …”

    For More of this study

    https://www.nas.org/reports/critical-care/full-report

    1. Nancy_Naive Avatar
      Nancy_Naive

      How about for less of it?

    2. generally_speaking Avatar
      generally_speaking

      Can you please just post a link to this next time? It’s annoying to scroll past and most readers are not going to commit themselves to reading all of that.

  15. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Higher Education now confronts a very real and deep financial crises. Many institutions will not survive without Federal and state monies. Linked in below is a just competed study suggesting ways to reform these institutions as part of the rescue package. Here is brief sample of study’s Introduction:

    NAS

    April 20, 2020

    Introduction

    The 2020 coronavirus pandemic has already transformed higher education. Classrooms, laboratories, faculty offices, libraries, stadiums, and dormitories stand empty. In their place, colleges and universities have implemented online distance learning.

    We hope that truly valuable parts of higher education, such as the shared pursuit of liberal learning in an actual classroom, will be restored. But the path to that restoration will be difficult. The cost of the shutdown to colleges and universities is enormous and still growing. An unprecedented financial crisis for American higher education lies ahead.

    In response to that crisis, colleges and universities have announced a variety of cost-cutting measures. Generally, these include salary freezes, hiring freezes, limits on purchases, furloughs of many employees, and lay-offs of untenured faculty members. In a few cases, college presidents and other executives have taken salary cuts. The higher education establishment doesn’t expect these measures will be enough. They’re counting on additional federal and state bailouts to stay afloat.

    The National Association of Scholars (NAS) believes that some such bailout will be necessary. However, NAS also believes that legislators and regulators should tie bailout funds to reforms that address long-standing problems in American higher education. Colleges and universities can do better than just return to the status quo ante.

    For far too long, American higher education has exploited the hopes of students and their families, as well as the goodwill of legislators and the American public. Millions of Americans have been plunged deeply into insupportable debt in order to fund huge increases in college administrative costs over the last 30 years. Administrative positions, including non-instructional staff, now consume more than 50% of higher education payroll costs.1 At the same time, colleges and universities offer a trivialized curriculum marked by animosity to America. Our country deserves much better—and we can get it.

    NAS recommends that legislators require colleges and universities that want emergency federal and state financial support to adhere to two principles:

    1. They must significantly reform their unsustainable finances, above all by immediately reducing administrative overhead by 50% or more.

    2. They must adhere to American principles of freedom and avoid activities that threaten the American national interest.

    The Shutdown

    Inaction is not an option. We must act quickly.

    The shutdown has cost colleges and universities billions of dollars and will cost a great deal more. Amherst College estimated on April 4 that the shutdown would cost it $10 million. Pennsylvania’s 14 public universities together face $70 million to $100 million in losses for the spring closure. Oregon’s public universities project they will suffer at least a $100 million “loss in revenue in the current quarter due to campus closures and cancellation of college events including sporting competitions.” In Wisconsin, university system “officials conservatively estimate the revenue losses and additional costs related to the pandemic will tally roughly $170 million for the spring semester alone.” According to the Chronicle of Higher Education, “The University of California absorbed $558 million in unanticipated costs in March alone due to the coronavirus.”

    In March, Moody’s Investors Service downgraded “the credit outlook for the higher education sector to negative.”

    Higher education possesses several sources of revenue. The largest is generally tuition, room, and board. Other sources include research grants, donations, and, in some cases, endowments. State universities derive support from legislative appropriations. Colleges and universities also generally secure favorable terms for bonds and other forms of borrowing.

    The coronavirus pandemic, the shutdown, and the decline in the stock market have imperiled every one of these revenue streams. If nothing else changes, American higher education is hurtling toward a cliff.

    Pre-Existing Conditions

    Higher education’s financial crisis will get worse even if the shutdown ends soon. Colleges and universities already faced a demographic slump before the crisis. Many colleges reported that they failed to meet their fall 2019 enrollment targets. Enrollments peaked in 2011 at over 20 million, and fell to 18 million by fall 2019, when 231,000 fewer students than the year before showed up.

    Post-crisis, even fewer students will enroll. The American Council on Education (ACE) sent a letter to the US Congress on April 9 that projected a decline of “15% for fall 2020—including a 25% decline in international student numbers—and an expected revenue loss for institutions of US $23 billion.”

    No university’s contingency plan covers losses of this magnitude. The higher education establishment expects that the federal government will step in with a massive bailout, far beyond the $14 billion it received in March 2020 in the CARES Act’s initial stimulus package.

    Co-Morbidity

    Unfortunately, colleges and universities have given legislators and the American public many reasons to doubt that such funds would be well-spent:

    Although administrative costs absorb more than 50 percent of higher education payroll costs, colleges and universities have absolutely refused to touch the vast apparatus of “services” that have sent costs skyrocketing in the last twenty years. With few exceptions, our colleges and universities steadfastly preserve the jobs of every diversity dean, resentment studies professor, microaggression counselor, and “social justice” bureaucrat.
    Meanwhile, every objective test reveals that college admissions standards have collapsed and the quality of college education has plummeted. The Organization for Economic Cooperation and Development rates the United States among the lower half of developed countries on its tests in math, reading, and science. One widely cited study, employing the Collegiate Learning Assessment, showed that 45 percent of tested students showed no significant gains in critical thinking, complex reasoning, or writing over the course of four years of collegiate study. Every assessment documents that courses have gotten easier. College students spend half the number of hours studying that students did a generation ago, while grade inflation has sent student grade point averages so high as to make the scale meaningless. Discouraged academics have written a small library of in-depth examinations of this educational decline—including, most recently, the acute analysis that NAS scholar John M. Ellis provides in The Breakdown of Higher Education (2020).
    Students are mired in debt for college loans they cannot repay. Colleges and universities reap the benefits of those funds and bear none of the costs.
    Colleges and universities routinely violate students’ and faculty members’ intellectual freedom, trample on their due process rights, and promote programs that advance anti-American ideology and political activism.
    Finally, many colleges and universities give pride of place in admission to foreign students, who pay full tuition. More than a third of these students come from the People’s Republic of China, many of them with Communist Party family connections. In addition, many colleges and universities, despite their huge taxpayer subsidies, subvert American immigration law to admit, employ, and give “sanctuary” to illegal aliens.

    Economist and NAS board member Richard Vedder aptly summarizes the state of affairs in higher education: “In past crises institutions of higher education could count on tremendous support from the general public: people paying taxes which subsidize universities, making private donations, and paying tuition charges. Colleges are going to pay a heavy price for the contempt they have shown in recent years towards American values—the First Amendment, a strict adherence to the rule of law, etc.”

    Revival

    On April 15, President Trump announced the “Great American Economic Revival Industry Groups.” These include many sectors of the American economy, such as agriculture, banking, construction, defense, energy, financial services, food & beverage, healthcare, hospitality, manufacturing, real estate, retail, tech, telecommunications, transportation, and sports. Higher education was conspicuous by its absence.

    Its exclusion from the list makes good sense. The higher education sector has shown little willingness to put its house in order—even after substantial prodding from the Trump Administration.2 No amount of money can revive our colleges and universities until it does.

    NAS believes that higher education can do far better. Therefore, we offer the following proposals.

    NAS Proposes

    The President and Congress should demand that higher education cut administrative overhead by 50 percent as a minimum condition for any further bailout funds.

    Colleges and universities that ask for financial assistance must commit themselves to ending run-away costs and diversions from serious academic purpose. Nothing is more wasteful and extravagant than the growth in administration.

    The rest of this document outlines NAS’s framework for allocating bailout funds among colleges and universities that have made these cuts. Our framework draws in part from our larger education agenda, the Freedom to Learn Amendments.

    The first half of our framework reflects basic economic priorities:

    No bailout funds should go to the wealthiest colleges that have endowments sufficient to ride out this storm.
    No bailout funds should support the salaries or benefits of administrators or non-academic support staff, whose numbers have proliferated at the expense of faculty and whose “co-curriculum” seeks to replace teaching with indoctrination.
    Any bailout should reward institutions that uphold academic rigor, reform abuses of “community-service” work-study, encourage productive experimentation with distance learning, deliver liberal arts instruction to community college students, provide valuable vocational education, and excel in offering low tuition.

    Congress should put students first by reforming student debt lending practices and by ensuring that colleges and universities share the burden of students’ financial choices.

    The second half of our framework reflects America’s foundational principles. America’s colleges and universities should:

    Sign an intellectual freedom charter.
    Respect due process in all investigatory and disciplinary proceedings—especially those involving grave charges, such as accusations of sexual misconduct.
    Commit themselves to promoting First Amendment rights and intellectual diversity.
    Prioritize practical disciplines critical to American national security.
    Limit foreign dependence, particularly on countries such as China that have demonstrated hostility to American interests.
    Support American immigration laws by prohibiting illegal aliens.

    Colleges and universities only deserve taxpayer support if they control their runaway spending and support American principles.

    A Beginning

    Attaching conditions to a bailout fund is only a partial solution. Colleges and universities depend far more on Title IV student loans and grants, as well as on research grants from a wide variety of federal agencies. The wealthiest universities, such as Harvard with its $40+ billion endowment, scarcely need to worry about bailout money—although some have already received it. Harvard itself actually received $8,655,748 in the initial CARES bailout. Harvard ultimately returned that sum to the federal government, but only under extreme political pressure. Congress can only restore higher education to good health by reforming the Higher Education Act as a whole, as well as the rules governing colleges’ eligibility to receive federal research grants.

    Reform on that scale will take years. Establishing conditions on bailout funds can be completed quickly. These will provide a model for more far-reaching legislation—as well as demonstrate that such reform can be put into practice. Enacting reform tied to coronavirus relief is the most practical way toward achieving the ultimate goal of structural reform of higher education.

    1. Basic Economic Priorities
    1.1. No Bailout for Wealthy Colleges

    Just as Congress means-tested the emergency funds for individual Americans, to make sure money reaches people in true financial need, no emergency higher education bailout funds should go to the 100 private colleges and universities with the largest endowments, each of which has an endowment of more than $600 million. Federal support for student education should be channeled to colleges that lack the resources of our wealthiest colleges.

    1.2. No Bailout for Administrators

    Large colleges and universities, with student bodies of more than 1,000, should cut their administrative overhead by 50 percent as a condition of receiving bailout funds. Small colleges, with student bodies of 1,000 or less, should cut their administrative overhead by 10 percent. Additionally, Congress should forbid the use of any emergency relief money to pay for the salaries and benefits of college administrators and support staff, including those with in-class teaching responsibilities occupying one-third or less of their time. Congress should provide incentives, in the form of bonus relief funds, to institutions that submit budget plans to reduce their administrative expenses by 70% or more, with the largest bonuses going to institutions proposing the deepest administrative cuts. Any university that fails to execute these cost reductions will be required to repay the bonus. The Department of Education should formulate a rigorous definition of “administrative expenses,” to ensure that colleges and universities comply with Congressional intent.

    1.3. Require Academic Rigor

    Remedial courses—that is, pre-college-level courses offered by a college or university—should not count toward an academic degree or for college credit. No college that awards credit for remedial courses should be eligible for bailout funds.

    1.4. Community-Service Work Study Reform

    Currently, colleges and universities are required to reserve 7% of their federal work-study funds for “community service”—which, all too often, means forwarding “social justice,” i.e., progressive political activism. The Department of Education and Congress should either eliminate this set-aside or limit it to forms of community service that will directly help America endure and recover from the coronavirus epidemic.3

    1.5. Distance Learning

    Congress’ March 2020 bailout allocated its funds only by counting students who didn’t study exclusively online. The higher education establishment inserted this requirement to harm for-profit colleges, but it has also damaged nonprofit colleges that have innovated by providing exclusively online education.

    Distance education isn’t a panacea for higher education. It may always work better for some disciplines than for others. Done badly, it makes it too easy for students to slack and to cheat. Done properly, with rigorous final examinations that confirm students have acquired substantial amounts of knowledge, it holds great promise. With proper legislative support, distance education may grow to become a large and valuable component of American higher education.

    Congress should support good-faith experimentation by higher education institutions to deliver thorough, cost-effective instruction over the Internet. It should work to lower the institutional barriers that prevent such good-faith experiments from thriving. Indeed, given that the government favors “social distancing,” distance education may be a uniquely useful form of higher education for the duration of the pandemic.

    Coronavirus bailout funds should be allocated to for-profit and nonprofit institutions by a formula that gives equal weight to students who study exclusively online.

    1.6. Community Colleges

    Congress should direct substantial amounts of relief funds to community colleges, which provide the backbone for the democratic promise of American higher education. These relief funds should include support for liberal arts instruction, which was never meant to be reserved for a wealthy elite. Coronavirus bailout funds should provide payroll support dedicated to faculty in community colleges.

    1.7. Vocational Education

    Congress should provide targeted assistance for vocational education by offering payroll support for faculty. This payroll support should give priority to faculty who teach courses leading to degrees for vital careers such as medical assistant, dental assistant, pharmacist, cybersecurity technician, laboratory technician, fireman, and police officer. Congress should also provide targeted assistance for apprenticeships in these vital careers.

    1.8. Encourage Low Tuition

    Congress should offer additional bonus relief funds to institutions that have total student charges, including tuition and all fees, in the bottom ten percent of their institutional category. (“categories of institutions” as defined in 20 U.S.C. §1161m.) Colleges and universities that have held tuition increases to less than 1 percent per year for five years previous, or which sign a federally drafted pledge not to increase tuition for the next five years, should also be eligible for funds.

    2. Put Students First

    Congress should provide generous direct support for American students, and not just indirect support to colleges and universities. In the current system, students bear the risk of borrowing money against their future earnings to pursue degrees that often prove to have little value. The colleges and universities that offer these low-value degrees accept the borrowed money but none of the risk. This is wrong. America’s colleges and universities, which until now have benefitted from federal higher education support without sharing any of the risks or costs, should also help students both by helping them pay off their college loans and by assuming partial responsibility for student loan defaults.

    This support should be crafted to ensure that it benefits students who combine the greatest need and the greatest ability to succeed. Taxpayer support should also focus on helping students whose future careers will provide the greatest contribution to America’s national interest.

    2.1. Delayed Student-Loan Repayments

    The Education Department has already provided short-term relief for student loan repayments. It should provide longer-term relief at once, rather than simply extending relief a month or two at a time. The Education Department should immediately freeze student loan repayments, including interest accrual, until January 1, 2021.

    2.2. Student Loan Buyback Program

    Congress should mandate that colleges and universities that accept bailout funds establish a student loan buyback program to purchase Stafford Loans from lenders and replace them with new loans at a capped interest rate of no more than 1% a year. Colleges and universities must finance this program at a level equal to at least 10% of the coronavirus bailout funds that they receive. Student eligibility for the buyback program will be limited to borrowers who have successfully completed a financial literacy program and who have graduated from college with a GPA of 3.0 or higher. Colleges and universities should prioritize student loan buyback for faculty, professionals, and students in areas critical to national security, such as the biomedical sciences, medical schools, military science, nursing, and engineering.

    2.3. College Aid to Student Loan Defaulters

    Congress should mandate that students at colleges and universities that accept bailout funds will be allowed to discharge their debts into bankruptcy, if the student graduated at least seven years previously and currently is a member of a family/household in poverty, as defined by the Health and Human Service poverty guidelines.4 These colleges and universities will be required to accept responsibility for 30% of loans (including accruing interest) defaulted on by students at their institution, to be repaid to lending institutions over a 20-year period.

    2.4. Focus Student Aid on Genuine Need …”

    For More of this study

    https://www.nas.org/reports/critical-care/full-report

    1. Nancy_Naive Avatar
      Nancy_Naive

      How about for less of it?

    2. generally_speaking Avatar
      generally_speaking

      Can you please just post a link to this next time? It’s annoying to scroll past and most readers are not going to commit themselves to reading all of that.

  16. LarrytheG Avatar
    LarrytheG

    deep into snowball in hell territory… and then some.

  17. LarrytheG Avatar
    LarrytheG

    deep into snowball in hell territory… and then some.

  18. Lift Avatar
    Lift

    I have been dumbfounded by Virginia’s public higher ed budgets and have separately advocated for taxing inheritance as a means of leveling the capitalism playing field. But the topic posted here got my ire up a few weeks ago when the bailout got publicity because it included funds for the uber rich Ivies. Why are federal funds going to state publics which pay no federal tax? At least ECPI pays something to the feds. And the theological schools? No flipping way should an organization get tax exemption every which way and then get tax $ handout.

  19. Lift Avatar
    Lift

    I have been dumbfounded by Virginia’s public higher ed budgets and have separately advocated for taxing inheritance as a means of leveling the capitalism playing field. But the topic posted here got my ire up a few weeks ago when the bailout got publicity because it included funds for the uber rich Ivies. Why are federal funds going to state publics which pay no federal tax? At least ECPI pays something to the feds. And the theological schools? No flipping way should an organization get tax exemption every which way and then get tax $ handout.

  20. LarrytheG Avatar
    LarrytheG

    I, for one, think the way the Feds have done the money is nothing short of idiocy.

    We talk about Richmond and what it should do or not – wait or take action now but clearly on the Fed side – panic ensued and despite all the talk in years past of fiscal discipline for those claiming to have such credentials, it all went out the window – and the tales of who got money who shouldn’t have are legion.

    At this point – there is little pretence – they’re just blowing money like it’s cannon fodder…

    I’m sure at some pont – the two sides will get back to finger pointing.

    And just funny – those who are pilloring Northam say that it’s different because he has to “balance” his budget and the Feds do not.

    really? that’s the excuse?

  21. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    https://www.washingtonpost.com/business/2020/04/14/coronavirus-law-congress-tax-change/

    Hint:
    Many companies in America cannot pay their rent. Nobody’s going to office anymore. It’s illegal. America’s going broke fast. Not funny.

  22. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    https://www.washingtonpost.com/business/2020/04/14/coronavirus-law-congress-tax-change/

    Hint:
    Many companies in America cannot pay their rent. Nobody’s going to office anymore. It’s illegal. America’s going broke fast. Not funny.

  23. Fred Costello Avatar
    Fred Costello

    The universities needed a bailout so the teachers and administrators, unlike the rest of us, would not feel the pinch of the quarantine.

  24. Fred Costello Avatar
    Fred Costello

    The universities needed a bailout so the teachers and administrators, unlike the rest of us, would not feel the pinch of the quarantine.

  25. Top-GUN Avatar
    Top-GUN

    There must be a new definition of College and University that I don’t know about..
    I see Beauty Academy’s, Therapeutic Massage Schools, Barbara and Cosmetology Schools on this list…..
    Your basic M1A1 trade schools for low paying jobs.
    U you can learn this stuff on you tube.

    1. LarrytheG Avatar
      LarrytheG

      YUP! There’s not a whole lot you can’t learn on YouTube as long as you have staying power!

      The problem is – how do you prove you have learned and now qualify?

      Hells Bells, we have bloggers all over the internet that can do anything any old scientist with years of schooling can do, right?

      😉

  26. Top-GUN Avatar
    Top-GUN

    There must be a new definition of College and University that I don’t know about..
    I see Beauty Academy’s, Therapeutic Massage Schools, Barbara and Cosmetology Schools on this list…..
    Your basic M1A1 trade schools for low paying jobs.
    U you can learn this stuff on you tube.

    1. LarrytheG Avatar
      LarrytheG

      YUP! There’s not a whole lot you can’t learn on YouTube as long as you have staying power!

      The problem is – how do you prove you have learned and now qualify?

      Hells Bells, we have bloggers all over the internet that can do anything any old scientist with years of schooling can do, right?

      😉

  27. John Harvie Avatar
    John Harvie

    Part of the problem is they have become industrial giants fully capable of the building of a $Billion campus in places like NOVA. I understand it takes lots of money and a size of critical mass to attract needed talent and research grant funds in today’s environment.

    One of my prized possessions is a personal letter the chairman of the VA Tech Physics department wrote my mother in answer to her query as to how I was doing. He had actually taught some of the classes I’d had attended.

    Picture that happening today.

    1. LarrytheG Avatar
      LarrytheG

      yep, them were the good old days, agree.

  28. John Harvie Avatar
    John Harvie

    Part of the problem is they have become industrial giants fully capable of the building of a $Billion campus in places like NOVA. I understand it takes lots of money and a size of critical mass to attract needed talent and research grant funds in today’s environment.

    One of my prized possessions is a personal letter the chairman of the VA Tech Physics department wrote my mother in answer to her query as to how I was doing. He had actually taught some of the classes I’d had attended.

    Picture that happening today.

    1. LarrytheG Avatar
      LarrytheG

      yep, them were the good old days, agree.

  29. TBill Avatar
    TBill

    By the way, how does student loan forgiveness fit into the new world?
    And free tuition too.

  30. TBill Avatar
    TBill

    By the way, how does student loan forgiveness fit into the new world?
    And free tuition too.

  31. LarrytheG Avatar
    LarrytheG

    I wonder. Ther are ruminations that even Helicopter money has limits and it’s said that some of the Congressional critters are now showing concern for deficit and debt and returning to their deficit hawk “concerns”!

  32. LarrytheG Avatar
    LarrytheG

    I wonder. Ther are ruminations that even Helicopter money has limits and it’s said that some of the Congressional critters are now showing concern for deficit and debt and returning to their deficit hawk “concerns”!

  33. America’s Colleges & Universities Awarded $12.5 Billion In Coronavirus Bailout – Who Can Get It And How Much; Amid coronavirus pandemic, a growing list of colleges in financial peril, And More News | HigherEdFundraising

    […] Is There Enough Helicopter Money to Save Higher Ed? Bacon’s Rebellion (5/5/20) How much money are Virginia colleges and universities getting in federal COVID-relief helicopter dollars? Read more… […]

  34. Lift Avatar
    Lift

    North Carolina has made its decision: students come to campuses August 10, work straight through the semester to finish prior to Thanksgiving. No fall break, no coming and going en masse. Resume in January for second semester. Interesting answer, and mainly impressed that they’ve settled the question so that now everyone can plan.

  35. LarrytheG Avatar
    LarrytheG

    What will be interesting is if the Colleges will require students to sign a waiver absolving the College is responsibility if the student gets COVID19 while attending.

    I’ve heard that some in Congress want to do a law that provides blanket immunity for any entity that opens and those who might get COVID19.

  36. Lift Avatar
    Lift

    North Carolina has made its decision: students come to campuses August 10, work straight through the semester to finish prior to Thanksgiving. No fall break, no coming and going en masse. Resume in January for second semester. Interesting answer, and mainly impressed that they’ve settled the question so that now everyone can plan.

  37. LarrytheG Avatar
    LarrytheG

    What will be interesting is if the Colleges will require students to sign a waiver absolving the College is responsibility if the student gets COVID19 while attending.

    I’ve heard that some in Congress want to do a law that provides blanket immunity for any entity that opens and those who might get COVID19.

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