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Faculty Members and Union Protest Staff Layoffs at Temple U. as ‘Cruel’

May 29th, 2009 by Andrew Mytelka | Comments Off | Filed in Daily News

Union leaders, department heads, and faculty members at Temple University are calling the way the administration handled the firing of several staff members on Wednesday “simply cruel.”

The university announced on Monday of last week that it was moving forward with plans to restructure its administrative staff, as part of efforts to save money. According to several faculty members, all positions as they existed were terminated, and the affected staff members had the opportunity to apply for a number of newly created jobs.

The employees were given until 1 p.m. the next day to schedule interviews, until Wednesday of last week to submit their applications, and until Thursday to submit letters of recommendation. This week, they were interviewed. On Wednesday they found out whether they had been rehired — or fired.

According to several faculty eyewitnesses, the dismissed employees were promptly escorted out of their building. The locks on their office doors were also immediately changed, the faculty members said.

The layoffs affected at least 19 staff members who belong to the American Federation of State, County, and Municipal Employees, a union that represents much of the university’s staff and that has been in talks with the university since October 2007 for a new contract. Many of the staff members were in the College of Liberal Arts. Some had served the university for decades, their faculty colleagues said.

In a letter of protest to the College of Liberal Arts’ dean, Teresa Scott Soufas, after the layoffs, critics — including department chairs, program directors, graduate and undergraduate directors, and members of the college’s executive committee — said the layoffs and rehirings took place without their input, and decisions were made without advance notice.

Members of the executive committee said their questions about the process, including how many jobs would be created, how many jobs would be retained, and how many employees would be lost, were never answered.

Ray Betzner, assistant vice president for university communications, said all layoffs at the university, both academic and nonacademic, were needed to meet reductions in the university’s budget. He said department leaders had been informed of the restructuring and had received the opportunity to offer input.

Members of the college’s technical staff were available to help employees retrieve information from their computers as they left, Mr. Betzner said, and employees can use their university e-mail accounts for the next 90 days.

“Layoffs are never easy, and a lot of care was taken to be as humane as possible,” Mr. Betzner said. “Any layoffs were done in compliance with union rules, including those rules on notice and severance packages.”

But Paul Dannenfelser, president of the university’s chapter of the union, said his organization was filing grievances with the university, including one for an alleged violation of a contract clause that says: “In the event Temple finds it necessary to make major changes … Temple agrees to meet and discuss the changes with the union in advance of the initiation of such changes.” —Erica Hendry

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Kentucky Lender Received Millions in Excess Subsidies, Auditor Finds

May 29th, 2009 by Kelly Field | Comments Off | Filed in Daily News

The Kentucky Higher Education Student Loan Corporation overbilled the U.S. Department of Education for loan subsidies and should return at least $9-million, the department’s inspector general wrote in an audit report issued today.

At issue are payments the Education Department makes to lenders that hold student loans financed with tax-exempt bonds.

In the 1980s, Congress guaranteed nonprofit lenders a 9.5-percent return on such loans to help protect them at a time when the economy was sour and the cost of making student loans was soaring. Congress eliminated that guarantee in 1993 but grandfathered in existing loans.

Most nonprofit lenders, along with some large for-profit loan companies that had purchased nonprofit agencies, maintained until recently, however, that government regulations allowed them to continue to receive the 9.5-percent return if they used the returns on loans backed by the bonds to make new loans, a practice known as recycling.

The department suspended all payments at the 9.5-percent rate more than two years ago, saying it would pay the higher rate only if the lenders could prove, via an audit, that they qualified for it. Since then 15 lenders have performed audits, and at least seven have been approved for the higher rate.

According to the Kentucky audit, the state lender overcharged the department by more than $9-million from 2001 to 2006 and may have overbilled by $79.5-million since then. The inspector general recommended that the Education Department require the lender to calculate the actual amount of improper subsidies it received during the five-year period. The audit also said the department should monitor and recover any excess subsidies paid since then.

In a letter of response, the Kentucky agency disputed most of the findings.

The agency is not the first to stand accused of overbilling the federal government. In 2005 the Education Department’s Office of Inspector General issued a report accusing the New Mexico Educational Assistance Foundation of overcharging the government by as much as $36-million. In 2006 it found that Nelnet had improperly received $278-million in subsidies. And in 2007 it found that the Pennsylvania Higher Education Assistance Agency had received at least $33-million in excess subsidies. In the end, only the Pennsylvania agency was ordered to return any of the money. —Kelly Field

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More Colleges See Their Credit Ratings Downgraded

May 29th, 2009 by Kathryn Masterson | Comments Off | Filed in Daily News

With declining endowment values and other financial problems, more colleges are seeing their credit ratings downgraded, The Wall Street Journal reported today.

Moody’s Investors Service has downgraded 20 colleges this year and has a negative outlook for the credit ratings of 55 colleges, the newspaper reported.

“That’s comparable to the rate of downgrades universities saw during the dot-com bust,” a managing director at Moody’s, John Nelson, said. “And we probably will surpass it.” A lower credit rating can increase the cost of borrowing, something a growing number of institutions are doing.

Earlier this week, Dartmouth College was downgraded from a AAA rating, the highest possible, to AA+ by Standard & Poor’s Ratings Services. The ratings service cited Dartmouth’s operating deficit, a decline in the value of its endowment, and its debt load as factors in the decision.

Other colleges whose credit ratings have been downgraded include Bard College, Drew University, High Point University, Ohio Northern University, the University of Central Arkansas, and Yeshiva University.

The increase in downgrades comes at the same time more colleges, including the highest-rated ones, are borrowing money to cover operating costs. According to Moody’s, 12 institutions with AA or AAA ratings have borrowed a total of more than $6-billion in recent months to meet their obligations. —Kathryn Masterson

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Largest Community College in U.S. Will Cap Enrollment

May 29th, 2009 by Elyse Ashburn | Comments Off | Filed in Daily News

Because of steep cuts in Florida’s budget for higher education, Miami Dade College, the largest community college in the country, has announced plans to cap enrollment, The Miami Herald reported.

Miami Dade had hoped to raise revenue through a special referendum asking voters to increase the local sales tax by a half cent, but a bill that would have put the referendum on the ballot failed in the Florida Legislature.

Eduardo J. Padrón, the college’s president, said the significant cut in state money would prevent Miami Dade from adding new class sections in the fall term. The college is also canceling all of the open-house events set for tomorrow on eight of its campuses.

Miami Dade, like most community colleges, traditionally has an open-door enrollment policy, but the college estimates that as many as 30,000 students will not be able to take the classes they need to graduate and more than 5,000 will not be able to register for any classes this fall.

Shrinking state budgets have also put California’s community colleges in a bind. The 110-college system is likely to reduce its enrollment by 250,000 students in the coming academic year. —Ashley Killough

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