Student Loans: Use Public Funds for College Students, Not for Banks and Private Lenders

By Linda Stamato
A bill introduced in Congress on Wednesday would end the bank-based guaranteed-student-loan program (and provide additional money for Pell Grants, expand the Perkins Loan program from the current $1-billion to $6-billion a year, while overhauling its structure). Introduced by the chairman of the U.S. House of Representatives education committee, George Miller (D-Calif), it mirrors President Obama’s budget proposals by shifting all student loans into the government-run direct-loan program.

Under the bill, banks and other lenders would no longer “originate” federal student loans, but they could compete for the right to service them. And guarantors could compete for grants to provide borrower services like financial-literacy education, default prevention, and borrower retention.

“Many able students are excluded from college for no other reason than their ability to pay” (Center for the Study of Higher Education, Penn State University: 2009)

The House education committee is expected to take up the bill next week.

It’s hard to keep a straight face as private lenders vie to remain in the guaranteed student loan business. With virtually NO private capital available for financing student loans, what banks do is funnel public money to students and keep not a little for their “efforts.” Who thinks it’s a good idea to pay banks to give students public money? The usual suspects: those who benefit directly, their lobbyists, and members of Congress whose “interests” are affected.

Rutgers University Commencement in MayMore than 10,000 Rutgers students depend on the Pell Grant program for tuition aid, and Rutgers ranks among the top 10 public universities in the nation in the number of Pell recipients enrolled

The rhetoric is beyond the pale. Listen to Senator Lamar Alexander (R-Tenn) for example:

“This effort by the Obama administration for a Washington takeover of student loans is just one more example of a long line of Washington takeovers of banks, insurance companies, car companies, health care, that I totally object to.”

What the Obama administration proposed, though, goes like this: Scrap the existing program–so that all federal loans are made directly by the government–in order to save billions of dollars in subsidy payments to lenders, making it possible, then, among other things, to redirect money to pay for expanded grant aid to needy students. According to the Congressional Budget Office, replacing subsidized loans made by private banks with direct government lending would save between $87 and $94 billion over the next decade. (See my earlier blog on the subject: “Finance Federally Guaranteed Student Loans Without a Middleman” for more information).

While making direct loans may seem like a ‘no-brainer,’ it isn’t; too many vested interests are at stake.

Take a look at the lengths to which Citibank is going, for example, to retain the student loan business it has. The bank is spending some portion of its federal bailout funds to lobby against loan reform. And, why not? If the alternative to the Obama plan, to which it subscribes, were to gain approval, Citibank and its colleagues in the private-lending-of-public-money business stand to pocket $15 billion (yes, billion, at the expense of needy students).

The bank emailed borrowers who took out student loans with Citibank encouraging them to write to Congress opposing the administration’s proposal, using such words as “choice” and “service,” but, really, where is the value added in this arrangement of being a middleman between the provider of funds and the receiver of the aid? What choice? What service?

The argument that the Obama plan (and, now, the Wilson bill) will deny students choice is just plain hogwash. The call for “competition” is a joke. The terms on these loans are identical regardless of vendor, so there really is no choice to make.

And, by the way, take note Senator Alexander, under the bill students can still borrow from banks, but their loans would not be guaranteed by the government (let’s hear it for the private sector!) and the interest rate would not be set by the government. (the choice is up to the banks) . More like the competition the private lending crowd should be pleased to see, no? Well, not really. The banks prefer that the public bear the burden and pay the banks for the privilege.

Representative Miller finally got fed up with the game (and introduced his own bill):

“It’s unfortunate that a small number of lenders are using legislative gimmicks to mask the fact that their proposal would divert $15 billion into their own pockets at the expense of students…..This cynical stunt is another reminder that our federal student loan programs need major reforms to ensure they operate in the best interests of students and taxpayers.”

What the banks are seeking is a risk-free business in which they essentially use taxpayer dollars to “originate” loans, with repayment guaranteed, and then resell those loans to the Treasury–this is a system in which they get all the rewards and we, the public, take the risk. What does it take to “originate” a loan? Well, it’s a process the federal government already does, according to the deputy under secretary of education, Robert Shireman, “in a much more efficient way.”

With the government directly or indirectly financing virtually all federal student loans because of the current financial crisis, is there any reason to continue a program that was intended to inject private capital into the education lending system? Hello?

Come on. Let’s cut through all the rhetoric and do what’s right and sensible. Let’s reform the student aid program once and for all and put our dollars where the needs are–with the students. Banks can (and will) take care of themselves.

Reforming the student loan program is a critical element of President Obama’s strategy to make college more affordable, one of three domestic priorities. While there may be legitimate arguments about his other two–heath care and energy–there should be none about this one.

NJSTARS and NJSTARS II – Keeping the Best and Brightest in New Jersey

By E. Michael Angulo, Esq.

New Jersey has a strong commitment to educational excellence.  Few states can compare with New Jersey in terms of the amount of resources devoted to high quality public education.  A highly educated populace is essential if New Jersey is going to sustain a robust workforce ready to compete in the global economy.

To this end, Governor Jon S. Corzine and the Legislature have supported the NJSTARS and NJSTARS II program to ensure that our best and brightest students, regardless of economic circumstances, are able to pursue their higher education in New Jersey.

First established in June 2004, the NJSTARS program covers tuition and approved fees for attendance at a New Jersey community college for students graduating in the top 15 percent of their high school class.   NJSTARS recognizes the importance of acquiring an education beyond the high school level, the need to produce and retain a well-trained and educated workforce, and the ability of the State’s community colleges to strengthen the State’s economy.  Since 2004, nearly $35 million has been awarded under the program.

In an effort to encourage and assist NJSTARS students to obtain their four-year degree in State, in 2006, the NJSTARS II program was created.  The NJSTARS II program allows NJSTARS students graduating with at least a 3.25 grade point average (GPA) from their community college to continue their education at a four-year public college in New Jersey.  To date, over $8.7 million in NJSTARS II scholarships have been awarded.  Under NJSTARS II, awards are based on tuition; however, for students receiving a Tuition Aid Grant, the award is based on tuition and approved fees.  Award amounts are also based on the student’s GPA. Students with a GPA between 3.25 and 3.50 can receive up to $6,000 per year and those who have GPAs greater than a 3.5 can receive up to $7,000 per year.

To address the unprecedented growth of the NJSTARS and NJSTARS II programs, in 2008, the programs were modified to enhance eligibility requirements and to make the program fiscally sustainable particularly in the face of the State’s difficult budget situation.  The changes to the NJSTARS program include:

• Covering up to 18 credits per semester for those students who choose to accelerate their degree program
• No longer funding remedial course work
• Requiring students to pass an academic placement exam
• Imposing a income cap of $250,000 on families

Changes to NJSTARS II includes:

• Applying a tiered scholarship amount based on GPA
• Limiting the obligation of participating State and public colleges to 50% of the NJSTARS II scholarship
• Imposing a $250,000 family impose cap

Analysis of NJSTARS students shows their performance, as measured by grade point average and the number of degree credits earned, is higher than other full-time students at New Jersey institutions.  NJSTARS scholars also show a higher retention rate than their peers.  Most importantly, the majority of these high achieving students are expected to remain in New Jersey after graduation, sustaining our highly educated workforce, and investing in the State.  Through programs like NJSTARS and NJSTARS II, New Jersey is in a strong position to compete globally in the 21^st century.

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E. Michael Angulo, Esq., is Executive Director of the New Jersey Higher Education Student Assistance Authority Since 1959, the Authority, which administers the NJSTARS and NJSTARS II programs, has delivered over $18 billion in state and federal financial aid for more than 1 million students.  Annually, HESAA presents workshops, training programs and other outreach events to thousands of students, parents, guidance counselors and financial aid professionals in an effort to help them understand the benefits of higher education in New Jersey and the resources available to make that education affordable.

Can Politics Learn A Lesson from Academia?

By Richard A. Lee

At this time of the year, as we attend graduation ceremonies for family and friends and reflect upon the messages offered by commencement speakers, we may want to think about the world of politics for a moment.  There may be a lesson or two we can learn from the manner in which our colleges and universities operate.

A graduation is a happy event that marks the successful conclusion of an academic experience. Students celebrate their accomplishments and accept congratulations as they bid farewell to school.

Contrast graduations with how our elected officials leave the world of politics. Sometimes the end comes at the conclusion of a bitter election campaign. For others, it is an arrest, an indictment or an embarrassing personal revelation that brings a career to a sudden close.  Although there are some elected officials who leave the public spotlight on their own terms, they are few and far between. And many of those who “retire” and choose not to seek re-election are pushed to their decisions – by the threat of a primary challenge, sinking poll numbers, or a phone call from a powerful county chairman.

More often than not, the end of a political career is not something we celebrate with same enthusiasm as the end of an academic career. Let’s explore why.

For starters, education is something that generally takes place over a set period of time, with a defined starting point, a goal and a scheduled end point: four years to earn a diploma and a degree, and then move on. Political careers have less structure.  They have starting points, but the goals are not always clear, and they may differ substantially, depending on an elected official’s political party. For those in legislative bodies like ours in New Jersey, there is no planned end point — nor is there a specific goal akin to graduating — since there are no term limits. For those in places with term limits, there are aspirations to higher offices that blur or erase the end points.

Taking things a little further, there is a progression that takes place from year to year in education. Students enter as freshman and learn the ropes before they are accorded the privileges of upper classmen.  In state legislatures and Congress, freshman lawmakers have the same duties and responsibilities as colleagues who have been in office for a decade or more. Their votes carry the same weight, even though they have far less experience and institutional knowledge.

Schools also have standards for admission. They consider test scores, transcripts and other factors to ensure they have the best and brightest in their institutions. But there are no educational standards required to get one’s name on the ballot. An ample number of signatures on a petition is about all that is needed to do the trick. Lawmakers make critical decisions on issues that directly impact the quality of our lives, such as fiscal policy, education and healthcare. Yet there is no requirement that the men and women making these decisions have demonstrated the intellect to address them.

Lastly, academic institutions are very good at weeding out students who fail to cut the mustard. In fact, students can flunk out after just one semester. But once lawmakers take office — barring an extraordinary event – they are there for the full term, regardless of how they perform.

So should places such as New Jersey incorporate elements of academia into their governments? Should lawmakers’ official duties and responsibilities vary with experience? Should we set educational standards for holding office? Or establish term limits so lawmakers have clearly defined end points and goals?

No, we are not ready for such drastic changes, and the truth is we may never be. Politics and education are different fields that serve different functions in society. But there is a value in examining successful models from other disciplines to learn how others approach challenges and build foundation for success.

A few years ago, political scientist Larry Sabato wrote a book titled A More Perfect Constitution in which he laid out 23 proposals to re-invent federal government. The suggestions were bold and radical. They called for changing the structure of the House and Senate, establishing a new, six-year, one-time presidential term, and overhauling the primary system that political parties use to select their candidates for president.

Odds are Sabato’s proposals are too extreme and too controversial to gain widespread support, but they do provide a starting place for the constructive dialogue and conversation we need to change things for the better. Likewise, we are not about to re-model government after colleges and universities, but if the concept sparks debate and discussion, perhaps it can lead to something good.

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End the University as We Know It

BY: MARK C. TAYLOR

Graduate education is the Detroit of higher learning. Most graduate programs in American universities produce a product for which there is no market (candidates for teaching positions that do not exist) and develop skills for which there is diminishing demand (research in subfields within subfields and publication in journals read by no one other than a few like-minded colleagues), all at a rapidly rising cost (sometimes well over $100,000 in student loans).

Widespread hiring freezes and layoffs have brought these problems into sharp relief now. But our graduate system has been in crisis for decades, and the seeds of this crisis go as far back as the formation of modern universities. Kant, in his 1798 work “The Conflict of the Faculties,” wrote that universities should “handle the entire content of learning by mass production, so to speak, by a division of labor, so that for every branch of the sciences there would be a public teacher or professor appointed as its trustee.”
Unfortunately this mass-production university model has led to separation where there ought to be collaboration and to ever-increasing specialization. In my own religion department, for example, we have 10 faculty members, working in eight subfields, with little overlap. And as departments fragment, research and publication become more and more about less and less. Each academic becomes the trustee not of a branch of the sciences, but of limited knowledge that all too often is irrelevant for genuinely important problems. A colleague recently boasted to me that his best student was doing his dissertation on how the medieval theologian Duns Scotus used citations.

The emphasis on narrow scholarship also encourages an educational system that has become a process of cloning. Faculty members cultivate those students whose futures they envision as identical to their own pasts, even though their tenures will stand in the way of these students having futures as full professors.

The dirty secret of higher education is that without underpaid graduate students to help in laboratories and with teaching, universities couldn’t conduct research or even instruct their growing undergraduate populations. That’s one of the main reasons we still encourage people to enroll in doctoral programs. It is simply cheaper to provide graduate students with modest stipends and adjuncts with as little as $5,000 a course — with no benefits — than it is to hire full-time professors.

In other words, young people enroll in graduate programs, work hard for subsistence pay and assume huge debt burdens, all because of the illusory promise of faculty appointments. But their economical presence, coupled with the intransigence of tenure, ensures that there will always be too many candidates for too few openings.

The other obstacle to change is that colleges and universities are self-regulating or, in academic parlance, governed by peer review. While trustees and administrations theoretically have some oversight responsibility, in practice, departments operate independently. To complicate matters further, once a faculty member has been granted tenure he is functionally autonomous. Many academics who cry out for the regulation of financial markets vehemently oppose it in their own departments.

If American higher education is to thrive in the 21st century, colleges and universities, like Wall Street and Detroit, must be rigorously regulated and completely restructured. The long process to make higher learning more agile, adaptive and imaginative can begin with six major steps:

1. Restructure the curriculum, beginning with graduate programs and proceeding as quickly as possible to undergraduate programs. The division-of-labor model of separate departments is obsolete and must be replaced with a curriculum structured like a web or complex adaptive network. Responsible teaching and scholarship must become cross-disciplinary and cross-cultural.

Just a few weeks ago, I attended a meeting of political scientists who had gathered to discuss why international relations theory had never considered the role of religion in society. Given the state of the world today, this is a significant oversight. There can be no adequate understanding of the most important issues we face when disciplines are cloistered from one another and operate on their own premises.

It would be far more effective to bring together people working on questions of religion, politics, history, economics, anthropology, sociology, literature, art, religion and philosophy to engage in comparative analysis of common problems. As the curriculum is restructured, fields of inquiry and methods of investigation will be transformed.

2. Abolish permanent departments, even for undergraduate education, and create problem-focused programs. These constantly evolving programs would have sunset clauses, and every seven years each one should be evaluated and either abolished, continued or significantly changed. It is possible to imagine a broad range of topics around which such zones of inquiry could be organized: Mind, Body, Law, Information, Networks, Language, Space, Time, Media, Money, Life and Water.

Consider, for example, a Water program. In the coming decades, water will become a more pressing problem than oil, and the quantity, quality and distribution of water will pose significant scientific, technological and ecological difficulties as well as serious political and economic challenges. These vexing practical problems cannot be adequately addressed without also considering important philosophical, religious and ethical issues. After all, beliefs shape practices as much as practices shape beliefs.
A Water program would bring together people in the humanities, arts, social and natural sciences with representatives from professional schools like medicine, law, business, engineering, social work, theology and architecture. Through the intersection of multiple perspectives and approaches, new theoretical insights will develop and unexpected practical solutions will emerge.
3. Increase collaboration among institutions. All institutions do not need to do all things and technology makes it possible for schools to form partnerships to share students and faculty. Institutions will be able to expand while contracting. Let one college have a strong department in French, for example, and the other a strong department in German; through teleconferencing and the Internet both subjects can be taught at both places with half the staff. With these tools, I have already team-taught semester-long seminars in real time at the Universities of Helsinki and Melbourne.

4. Transform the traditional dissertation. In the arts and humanities, where looming cutbacks will be most devastating, there is no longer a market for books modeled on the medieval dissertation, with more footnotes than text. As financial pressures on university presses continue to mount, publication of dissertations, and with it scholarly certification, is almost impossible. (The average university press print run of a dissertation that has been converted into a book is less than 500, and sales are usually considerably lower.) For many years, I have taught undergraduate courses in which students do not write traditional papers but develop analytic treatments in formats from hypertext and Web sites to films and video games. Graduate students should likewise be encouraged to produce “theses” in alternative formats.

5. Expand the range of professional options for graduate students. Most graduate students will never hold the kind of job for which they are being trained. It is, therefore, necessary to help them prepare for work in fields other than higher education. The exposure to new approaches and different cultures and the consideration of real-life issues will prepare students for jobs at businesses and nonprofit organizations. Moreover, the knowledge and skills they will cultivate in the new universities will enable them to adapt to a constantly changing world.

6. Impose mandatory retirement and abolish tenure. Initially intended to protect academic freedom, tenure has resulted in institutions with little turnover and professors impervious to change. After all, once tenure has been granted, there is no leverage to encourage a professor to continue to develop professionally or to require him or her to assume responsibilities like administration and student advising. Tenure should be replaced with seven-year contracts, which, like the programs in which faculty teach, can be terminated or renewed. This policy would enable colleges and universities to reward researchers, scholars and teachers who continue to evolve and remain productive while also making room for young people with new ideas and skills.

For many years, I have told students, “Do not do what I do; rather, take whatever I have to offer and do with it what I could never imagine doing and then come back and tell me about it.” My hope is that colleges and universities will be shaken out of their complacency and will open academia to a future we cannot conceive.

“End the University as We Know It” originally appeared in the New York Times on April 26, 2009. Mark C. Taylor, the chairman of the religion department at Columbia, is the author of the forthcoming “Field Notes From Elsewhere: Reflections on Dying and Living.”

The Federal Stimulus Package and State Universities

BY: LINDA STAMATO

As advisors to President-elect Barack Obama work to finish an economic recovery blueprint to form the basis for legislation early in the new year, one can’t help but worry about the growing amount of the bailout, $775 billion most recently reported, and the purposes to which it will be directed. It appears that the omnibus two-year spending plan will cover five main areas of spending and tax breaks: health, education, infrastructure, energy and support for the poor and the unemployed, and that it is expected to have elements that seek an immediate impact as well as those that constitute investments for the future.

We need to put people to work, certainly, and try to rebuild our nation’s neglected infrastructure; we have to invest in ways that are wise, i.e., targeted, smart, green, and essential. We need to fix our health care problems, heal our social and economic divide and restore our damaged social compact. We need to take steps to spur long-term economic growth. Not least, we need to exercise careful stewardship of the stimulus funds.

We need to be creative, even inspired, in how we think about this.

New Jersey and New York leaders are talking about efforts to spur the economy by providing jobs. Regional officials hope for more housing vouchers for the poor and for block grants to rebuild playgrounds, sidewalks and police forces. The nation’s governors are asking the president-elect for funds to assist their economies with the focus heavily on infrastructure. Specifically, the governors ask for $136 billion for projects already on the books and ready to break ground (e.g. a new Tappan Zee Bridge; a tunnel under the Hudson River to Penn Station; a Nassau hub retail and entertainment cluster around a revamped Nassau Coliseum; upgraded sewer plants),and $40 billion for increased Medicaid costs, and, generally, for monies for people who have a likelihood of spending it quickly in order to get the economy moving again.

We need to think in broader, more lasting terms.

There are as many ideas -for putting the national economy back in shape as there are people who criticize them. Finding respectable, credible, and reasonably objective ideas is essential. Few fit this category as well as Michael E. Porter of the Harvard Business School. In fact, David Brooks, opinion columnist for the New York Times, singled out Porter’s overview of America’s long-term economic challenges in a recent issue of Business Week. . Porter’s perspective on the federal stimulus emphasizes investments that are particularly valuable for New Jersey, focusing not only on the immediate–as our governor, and others, appear to be doing at the moment–but on the future that is in jeopardy if we don’t.

Investing in higher education, and, particularly in public higher education is, for Porter, a critical part of the strategy to get us where we need to be.

Porter says that the United States has prospered because it has enjoyed a set of unique competitive strengths. Two have particular relevance to New Jersey: Porter acknowledges that the U.S. has provided an unparalleled environment for entrepreneurship by starting new companies, and that the U.S. also has the world’s best institutions for higher learning. Higher learning has equipped students with highly advanced skills and has acted as a magnet for global talent while also playing a critical role in both academic and commercial innovation.
Yet, what has driven America’s success, Porter believes, is starting to erode — beginning with a series of policy failures that have offset and, in some instances, nullified its strengths. Porter believes that these failures have become particularly alarming as other nations have become more competitive. More threatening than competition, though, Porter believes, is the lack of a coherent strategy for addressing our nation’s own challenges.

Higher education is an essential player in that strategy.

For the last several decades, there has been no serious or sustained plan to improve access to U.S. colleges and universities, that is, to make them affordable to more citizens. Porter indicates that America now ranks 12th in college or higher educational attainment for 25 to 34 year-olds and that we have made no progress in this ranking in the past 30 years. This trend is ominous in an economy in which skills must justify high wages. And, Porter observes, instead of mounting a serious program to provide access like the GI Bill or the National Science Foundation programs of earlier years, “Congress grandstands over the rate of endowment spending in our best universities.” At least it did until very recently!

Porter is not alone in thinking that we have to get beyond this limited thinking if we are to keep America competitive. If we go on the way we’re going for another 25 years, we won’t have an affordable system of higher education. Patrick M. Calla, president of the National Center for Public Policy and Higher Education found that published college tuition and fees, adjusted for inflation, increased 439 percent from 1982 to 2007, while median family income rose 147 percent.

Joseph Stiglitz, economist and Nobel laureate, also sees an important role for institutions of higher education in recovery plans. America has great assets such as a productive labor force and the best universities in the world. These strengths, coupled with a sensible and fair economic stimulus package, and judicious regulations, will help our economy recover. As Stiglitz sees it, the critical pieces of the puzzle are educating workers for the right job such as the so-called green jobs that reduce energy use and global warming emissions and improving information technology at public and private institutions, colleges and hospitals.

Accordingly, federal stimulus money going to the states ought to include a giant share for state universities. “We can’t weaken the link higher education institutions have in the social mobility chain,” Porter says. “If they don’t have the funds, the increased demand for their services can’t be met.”

Stimulus money is not neutral. We need to articulate the right goals, for sure, but the means or the implementation is critical. While job creation, for example, is clearly a significant part of the picture, without investing in universities to educate and re-educate the workforce, we could be creating jobs and have an insufficient of skilled (trained and educated) folks to fill them.
If universities continue to increase rates, effectively pricing students out, then the country needs to invest in keeping costs affordable. Public universities need support in order to expand classes, improve campus infrastructure, and accept more students. As public universities are being cut back by their states–drastically in some cases– enrollment cuts are imminent. The University of California is threatening to cut system-wide enrollment by 10,000 students, for example, if the state doesn’t provide more money. Here is where federal stimulus funds could be used well.

Some targeted investments can meet specific needs: more and better prepared nurses, for example, resources for community and technical colleges, and resources for universities to purchase needed equipment. Computers, for example, and other equipment for research are enormously important investments that can stimulate the economy, aid the institutions, and promote research and development in one fell swoop.

Fostering home grown innovation, state universities serve not only as incubators for technological development but they can provide avenues for the creative use of information technology. State universities can help ensure the competitiveness of U.S. technology-based businesses by keeping on the cutting edge, serving as repositories of federal funding for basic research, training many more engineers and scientists, and investing directly to stimulate commercial inventions. We need investment in high-level science and technology, and a greater effort to spur the spilling over of this research into ventures aimed at driving new industries. We must have a willingness to experiment and to innovate in the use of technology as well as in the creation of it.

In “The Venturesome Economy” (Princeton University Press, 2008) Amar Bhide, author and professor at the Columbia Business School, makes a corollary point, and argues for upgrading community college programs in order to enable them to experiment with new developments in technology.
Federal and state funding for research can create well-paid jobs while expanding knowledge. Investment in elementary and secondary education will feed this research with the essential good minds and able bodies, scientists, researchers, mathematicians, engineers, physicists, chemists, and yes, even a few writers and historians, so that we can document and learn from our past, present and future mistakes.

In two blogs, written before the economy visibly imploded, I made the case that becoming “green” and “smart” in order to improve New Jersey’s economic prospects was unlikely to happen without some targeted investment in higher education and, particularly, in the state’s research universities. And, last year in another blog, I lamented the fact of distorted federal spendingeven before we were considering investments in infrastructure. I criticized the federal omnibus appropriations bill, for example, for its failure to support essential funding for the nation’s growth –and for the pork spending the legislation contained: 800 earmarks, adding up to more than 10 billion dollars.

Looking at one area of science, the impact was as clear as it was lamentable. The Fermi National Accelerator Laboratory,the nation’s premier center for probing the mysteries of the universe had to lay off more than 10 percent of its employees as a result of the budget cuts mandated by Congress. And, as a result, Fermilab’s collaboration in an international project to design and build a linear collider stopped along with the nation’s contribution of $160 million to ITER, a test fusion reactor that is intended to develop a new commercial energy by emulating the process that powers the sun. Other critical science projects were put in limbo. We got earmarks instead.

Our priorities are clearly off. We need to get back on track with the federal stimulus spending and, to make an obvious point, to insert no earmarks–none–in this two-year plan, or any other for that matter. Trust in government has to be an essential element in the construction and implementation of federal spending.

As we plan a massive spending effort, political leaders, business leaders and civil society have to begin a respectful and informed dialogue about the challenges facing this nation. Recently, forty college presidents–including Rutgers president, Richard L. McCormick–board chairs, and leaders of educational associations signed a letter to President-elect Obama asking for about 5 percent of the expected stimulus funding–40 to 45 billion dollars–and indicated their preferences for funding through the states, as a part of the stimulus package.

It is good to see this effort being made. It should be made clear, though, that if federal stimulus funds are to be distributed by the governors of the states, that distribution should follow the strategy driving the stimulus spending; as with the “no earmarks” policy, there should, of course, be no “tree ornaments” in state spending of the federal dollars and there should be no “equalizing” or “politicizing” of funds. Commitments ought to be made on the basis of expanding enrollments, for example, demonstrable research-project-related equipment needs, or updating technology for campuses that directly relate to teaching and research needs.

New Jersey has an unfortunate history of funding “others” in order to gain political support for the necessary, demonstrated need, determined by merit and peer review.

In the effort to get funds to essential projects, it is necessary to jump-start the economy and to ensure that funds are not simply spent without care. Stimulus planners should also turn to the three principal institutes funded by the federal government, where many good ideas have been rejected for lack of funding. These ideas could be ready to launch. I refer to the National Science Foundation, the National Institutes of Health, and, yes, the National Endowment for the Humanities because, after all, the nation’s soul needs as much support as its infrastructural, scientific, and technological advancement.

One of the most important points in the open letter, beyond the immediate economic stimulus and infrastructure needs, is a call for the new president, the states, the business community, and education stakeholders from all sectors, to collaboratively ” develop a 20-year vision for educational attainment as part of an ambitious national strategy to ensure our continued competitiveness and security in the context of a global economy.” It’s not enough to recognize the urgency to improve education and its outcomes, raise graduation rates, prepare teachers better, and to build human capital in science, engineering, and mathematics. What is required in the present economic crisis is an investment in human capital, and the creation of “a long-term plan to serve the nation by enhancing public universities’ critical role in creating jobs, increasing graduates, enhancing the quality and skills of the workforce, and assisting in national technology and energy initiatives through research.”

“If we are honest with ourselves,” Professor Porter says, “We would admit the U.S. is not making real progress […]. Efforts by both parties are largely canceling each other out.” We need a strategy to direct our spending to “priority investments that also put money into the economy, such as educational assistance and logistical infrastructure, rather than, say, to tax rebates.” With a strategy we could stop counterproductive and expensive practices such as farm subsidies and spending earmarks.
Porter asks, “Is such strategic thinking possible, given America’s political system?”

It had better be.

We need a strategy for the stimulus plan(s), one that gives higher education a critical role in rebuilding the nation and the funds to make college more affordable for our future workforce. This strategy must come now. We need policies to assure we stay on track. Higher education must become and remain a vital partner in advancing and sustaining the nation’s economic well-being.

Ivy League Birth Control

By Michael P. Riccards

The Bush Administration’s budget contains some cuts in health care, one of them for subsidizing birth control devices and medications for college enrolled students. Across the nation, students (mainly female) are bemoaning the fact that birth control pills are going up from $6 to $18 per month which makes one would think that this new price is so terribly high that it threatens the economic well being of students on a budget. One must assume that they have already tried to absorb the extra $12 by cutting back on alcohol, cigarettes, clothes, shopping, and eating out.

In the true tradition of privilege, Princeton University’s the administration has come to the rescue of students. They have found in their campus billions about $80,000 to replace government subsidy for birth control. One only has to go the student heath center to be taken care of. After all, if one is paying $45,000 for an education at Princeton, one should expect free or at least subsided birth control. Things are all quiet on the Nassau.

The University’s largesse is a part of an even larger phenomenon. Students rightly object that they should not be treated as children by administrators. They do not need people serving in loco parentis. But still, when they get in trouble, they become children expecting the University and their parents to take their sides. Larger universities and colleges provide medical care, personal counseling, travel agencies, barbershops, and legal counseling. The once quiet student union has become a bazaar for student wares and student services. Of course, everybody ends up subsidizing all this through student fees.

While Princeton is subsidizing birth control, Rutgers is trying to figure out how to build luxury boxes in its football stadium. One great season has generated demand for seats—so the administration has to respond with more. Governor Corzine had promised $30 million in bonds; after the referendum defects in November he is backing way. He said he would head up an effort to raise private funds and made out a personal check for $1 million. That is the Corzine way.

Perhaps universities should revert to a clearer and more focused sense of the education mission. Yes an educational mission. If you want entertainment, go to Madison Square Garden. If you want birth control devices, go to the pharmacy. Let us subsidize student scholarships, libraries and laboratories—and do it based on student need.

Why Not Consider the Rutgers Stadium Funding Concept For Professional Sports?

BY: MICHAEL M. SHAPIRO

Time and again our State’s residents are told that professional sports teams will pay the full cost of stadium construction and are promised that no public funding will be used in the process. Yet, nearly every time our taxpayers wind up handing over big bucks to subsidize these professional stadium projects while team owners compete to see who can raise player salaries the highest. Our government in New Jersey has consistently played along and expressed surprise when suddenly our taxpayers are left with a bill that some politician attempts to explain in some convoluted manner. While not a situation involving a professional sports team, the recent plan announced to fund the expansion of the Rutgers stadium should be studied as a model for professional sports projects.

As recently reported, Rutgers had been seeking state funding for a stadium expansion, in the neighborhood of $100M. Last week, Governor Corzine informed Rutgers that the state money would not be forthcoming, a fiscally wise decision given our State’s skyrocketing debt. Instead, Governor Corzine is teaming up with Senator Ray Lesniak and other Rutgers alums to privately raise $30M to help fund the stadium expansion.

In the world of professional sports, if team owners seek public funds to subsidize their teams, our government should do the fiscally responsible thing and refuse. Rather, either the team owners should ante up the extra money or fans and players of the particular team can raise funds to finance any costs not covered by the team owners. If the funds are not raised, the stadium will not be built or expanded. Eventually, such stadiums will be built or expanded anyway if they are necessary to increase the profit margins of professional sports teams. As a result, team owners would likely wind up paying their full costs if private fundraising does not have the desired results.

In this way, public funds are not used to subsidize professional sports and the people who benefit the most from these sports teams — the team owners, players and fans — can each do their part so that our taxpayers are assured their tax money is not used to fatten the paychecks of players and the bank accounts of team owners. It should be worth noting that now that our government has refused to fund the expansion of the Rutgers stadium with public monies even though Rutgers is a public entity, a precedent has been set that would make it highly inappropriate for our taxpayers to be asked by our government to fund any stadium expansion by a professional sports team. Let’s remember this the next time our government asks us to bail out one of these teams and hold our elected officials’ feet to the fire.

Michael M. Shapiro, founder of ShapTalk.com, is an attorney who resides in New Providence, New Jersey. He currently serves as the Editor of The Alternative Press, http://www.thealternativepress.com Contact Mike at mike@shaptalk.com