University Business - December 2007 - (Page 32)

ON THE HILL Health, Education, Labor, and Pensions. “This legislation shows how the Congress and the president can work together to accomplish important things on behalf of American families,” declared Rep. George Miller (D-Calif.), chair of the House Education and Labor Committee. aﬃrmative action admissions policy of the University of Michigan Law School. Although the 2003 and 2007 rulings seemed to be contrary, the court distinguished them by noting that unlike the admissions plan it upheld in the Michigan case, plans in the Seattle and Louisville cases relied on diﬀerent types of racial classiﬁcations. Since the 2003 ruling, changes in its membership have given the court a more conservative bent. But after a careful reading of the latest decision to analyze its impact on how IHEs use race as an aspect of diversity, “we remain cautiously optimistic” that the University of Michigan ruling survives, said ACE’s general counsel, Ada Meloy. ACCREDITATION Proposals for reforming the higher ed accreditation system, which have ignited what the American Enterprise Institute calls “a ﬁrestorm of controversy,” were reviewed at an AEI conference in the capital. While Secretary of Education Margaret Spellings and her Commission on the Future of Higher Education recommend changes to the current process, others in the higher ed community say the changes go too far and could negatively impact accreditation as a whole. Some critics argue that the education agency seeks to federalize education or implement a one-sizeﬁts-all system. “The government is not leaning in this direction,” Sara Martinez Tucker, undersecretary of education, insisted at the AEI event. “Transparency is the main issue behind the changes that need to occur” in the accreditation system, said Arthur Rothkopf, former president of Lafayette College (Pa.) and now senior vice president of the U.S. Chamber of Commerce. Anne D. Neal, president of the American Council of Trustees and Alumni, suggested that the solution to the issue is to decouple ﬁnancial aid and accreditation. “The certiﬁcation process that an institution must go through to be able to operate, regardless of federal aid, should be enough to decipher whether or not they are a diploma mill,” she declared. into institutional decision-making if Congress tells universities how much to spend and what to spend it on. As ACE points out, most institutions aim for an annual 5 percent endowment payout—more or less depends on circumstances such as market conditions. At a Finance Committee hearing on the issue in early fall, Sen. Charles Grassley (R-Iowa), the senior minority member, said Congress should seriously consider legislation that would include additional reporting requirements and a minimum 5 percent payout on all college and university endowments above $500 million. It is uncertain where the committee will go on the issue. At a September hearing, the higher education community was not invited to testify, and ACE’s oﬀers to provide witnesses were turned down. As a result, lawmakers “received an inaccurate and incomplete picture” of endowments, ACE said. In late fall, ACE was urging colleges and universities to tell senators and staﬀ members from their states, particularly those serving on the committee, how endowments work and that imposing a one-size-ﬁts-all solution to a complex issue like endowment spending is misguided, the wrong response to college costs, and bad public policy. “Senators must proceed cautiously on this issue, if at all,” ACE asserted in its backgrounder. STUDENT AID, LOBBYING Earlier in the fall, President Bush took ﬁnal action on a less contentious issue when he signed the College Cost Reduction and Access Act, which the House and Senate had passed by overwhelming bipartisan margins. The legislation cuts subsidies to lenders who participate in the federal loan program and uses the savings to boost Pell Grants, cut the interest rate on student loans, and expand repayment options for students. Overall, the measure will deliver a $20 billion increase in student aid over the next ﬁve years—the largest investment in students since the creation of the GI Bill, said Sen. Edward M. Kennedy (DMass.), chair of the Senate Committee on Independent colleges that don’t employ or engage a lobbyist face tough restrictions on lobbying Congress. On another matter, ACE distributed a memo prepared by a Washington law ﬁrm that spells out what new rules on lobbying Congress mean for colleges and universities. Public IHEs remain exempt from congressional gift and travel restrictions. Thus, for instance, a state university may provide a member of Congress with tickets to a home football game without violating the rules. Independent IHEs, particularly those that don’t employ or engage a lobbyist, face tougher restrictions, including a ban on most gifts to members of Congress from the institutions and their employees. But the gift restrictions preclude food or refreshments of “nominal value” that independent schools may oﬀer at free receptions for members of Congress and staﬀ. SUPREME COURT Another new ACE paper evaluates the implications of a Supreme Court decision last June regarding race- and ethnicity-conscious admissions policies in K-12 public schools. In two cases based on developments in Seattle, Wash., and Louisville, Ky., the high court ruled that public school districts may not use race and ethnicity as the predominant considerations in school assignment programs designed to promote diversity. The key higher ed implication, ACE points out, is that the Supreme Court’s 2003 ruling in another case, Grutter v. Bollinger, “remains controlling law” for IHEs. The decision in that case upheld the 32 | December 2007 universitybusiness.com http://universitybusiness.com

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University Business - December 2007 Contents College Index Company Index Advisory Board Editor's Note Behind the News Viewpoint Admissions On The Hill Marketing Future Stock Independent Outlook Technology Spending Survey '08 Conference Call A Working Education 30 Smart Business Ideas Educause in Emerald City What's New Calendar of Events End Note

University Business - December 2007

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