Limit Taxpayer-funded, Need-Based Financial Aid to Public and Private Nonprofit Colleges Only

Spring
2012
Resolution Number
06.01
 
Contact
Phil Smith
Assigned to
President
Category
State and Legislative Issues
Status
Completed
Status Report

This resolution establishes a position of the Senate that will be communicated with constituent groups as necessary.

Whereas, Need-based financial aid is awarded to students on the basis of financial necessity rather than academic merit;

Whereas, Historically, the vast majority of students have attended public or private nonprofit colleges, and thus need-based financial aid from taxpayer dollars was thought to be an investment in individuals for the good of society and not for the benefit of private investors;

Whereas, The expansion of aggressive marketing by for-profit colleges and universities creates a situation in which need-based financial aid is additionally used to make a profit for corporate investors directly from taxpayer dollars; and

Whereas, Many students respond to aggressive marketing by enrolling in for-profit colleges and assuming financial responsibilities, often without a clear understanding of the scope and consequences of such commitments, and default at rates that are five times as high as at California private, non-profit institutions1 and graduate at rates that are 33-43% lower than at non-profit institutions2;

Resolved, That the Academic Senate for California Community Colleges support legislation and policy directives that limit need-based financial aid packages to public and private nonprofit colleges only; and

Resolved, That the Academic Senate for California Community Colleges urge the Legislature to provide funding for access to non-profit institutions for all impacted students.

MSC Disposition: Local Senates

1The average three-year default rate for federal loan borrowers at California for-profit colleges (24.2%) is more than five times the average rate at California private nonprofit colleges (4.8%) and almost four times the rate at California public colleges (6.5%). http://projectonstudentdebt.org/files/pub/CA_FP_Hearing_Advisory.pdf

2 The report, “Subprime Opportunity,” http://www.edtrust.org/sites/edtrust.org/files/publications/files/Subprime_report.pdf by the Education Trust, found that in 2008, only 22% of the first-time, full-time bachelor’s degree students at for-profit colleges over all graduate within six years, compared with 55 % at public institutions and 65 percent at private nonprofit colleges. NY Times http://www.nytimes.com/2010/11/24/education/24colleges.html?_r=1 Ed Trust Report http://www.edtrust.org/sites/edtrust.org/files/publications/files/Subprime_report.pdf

Appendix B