FAIRFAX, Va.  – President Barack Obama said Monday a new GI Bill for those who fought in Iraq and Afghanistan is an investment in both a new generation of veterans and the future of America.

The Post-9/11 GI Bill is the most comprehensive education benefit offered to veterans since President Franklin D. Roosevelt signed the original GI Bill for World War II veterans in 1944. In the next decade, $78 billion is expected to be paid out under it.

“We do this not just to meet our moral obligation to those who sacrificed greatly on our behalf, on behalf of the country,” said Obama, speaking at a celebration rally at George Mason University. “We do it because these men and women must now be prepared to lead our nation in the peaceful pursuit of economic leadership in the 21st century.”

The maximum benefit under the law rolled out Saturday will allow every eligible veteran, serviceman and woman, Reservist and National Guard member to attend a public college or university for free for four years. They are also eligible for a monthly housing stipend and up to $1,000 a year for books.

Those who attend a private institution or graduate school can receive financial assistance up to the cost of a public college in the state. About 1,100 schools are offering additional scholarships matched by the VA.

Obama noted that many of the 1.9 million troops who have deployed in support of the recent wars joined the military knowing they’d have to go and fight somewhere. He said military members have endured multiple tours in grueling combat.

“The contributions that servicemen and women can make to our nation do not end when they take off that uniform,” Obama said. “We owe a debt to all who served and when we repay that debt to those bravest Americans among us, then we are investing in our future.”

Service members who agree to serve four more years in the military can opt to transfer the benefit to their spouse or kids. It’s anticipated that nearly a half million veterans or their family members could participate in the first year.

More than 100,000 claims have already been processed, and more than 25,000 service members have applied to use the transfer benefit.

The legislation has been widely praised by veterans groups, but there have been concerns that universities and the VA could be overwhelmed, in part, because of the complexity of the benefit. There have been complaints that veterans attending private schools in states that keep public tuition low face a huge disparity in what they receive.

The legislation was authored by Sen. Jim Webb, D-Va. He was joined by several other veterans in Congress in getting it passed.

On the Net:

Veterans Affairs Department site on new GI Bill

Defense Department site on new GI Bill

Toll-free VA phone number on GI Bill benefits: 1-888-GIBILL-1 (1-888-442-4551)

State officials who oversee college-savings plans for parents are dumping several funds with higher expenses and poor performance, the N&O reports.

Winston-Salem Journal
The General Assembly’s aggressive spending this decade may cost North Carolina college students important financial aid in coming years.

That is the assessment of Treasurer Janet Cowell, and her calculations look pretty sound.

After the recession early in this decade, legislators raced to catch up on all the spending they’d missed. They freed money for new spending by shifting it among accounts.

One switch took scholarship money out of the General Fund for use elsewhere. Then the scholarship programs were restored with principal from the state’s Escheats Fund, The Associated Press reported.

The Escheats Fund is a repository for money about which North Carolina residents have forgotten. Two common sources are insurance policies that were never cashed and utility deposits that were left behind.
The fund now contains $584 million, and the state constitution says its proceeds must be used to help needy students attend public colleges. But that balance will fall quickly, Cowell said recently, because the General Assembly has been using its principal.

During this fiscal year, the Escheats Fund is expected to provide $210 million in financial aid, some $60 million of that going toward the state’s new EARN Scholars initiative. Low-income students in that program get $4,000 annual grants that, along with other funding, often allow them to graduate from college debt free. It is very possible that every dime involved in the legislature’s money switch went to very worthwhile causes. EARN is a laudable program that, by helping low-income youngsters to attend college, will prove a long-term investment winner for North Carolina.

But sound long-term investments are not built upon spending plans that involve the figurative eating of one’s seed corn. That is what the state is doing here by taking principal from the Escheats Fund. If the fund drops as much as Cowell predicts, it will contain only $83 million in 2011. That will end an awful lot of financial aid.

House Speaker Joe Hackney reacted to Cowell’s warnings by telling the AP that the legislature has the entire legislative session to figure out what to do with scholarships. But “we’ll think of something” is not a reassuring answer when the numbers are so compelling.

That’s especially true when we see record numbers of families applying for financial aid, when the College Foundation of North Carolina reports that parents are withdrawing college savings for non-college reasons and when enrollment at the state’s public universities and community colleges are all rising rapidly.
When the General Assembly figures out what to do, one component should be the return to the policy of using only earnings, and not principal, from the Escheats Fund. To do otherwise is foolish.

RALEIGH, N.C. — Students from HBCU campuses from across the state are gathering in Raleigh this Wednesday, February 18, 2009, reminding lawmakers they want their voices heard in the halls of the legislature.

Students have scheduled an 11 a.m. news conference in the press conference room of the legislative building, to discuss pending legislation they believe can make a difference in improving democracy.

Campuses represented on lobby day include: Shaw University, St. Augustine’s College, Bennett College, North Carolina Central University, North Carolina A&T State University, Fayetteville State University, and Winston Salem University.

This is the second biennial HBCU legislative lobby day co hosted by Common Cause North Carolina.

RALEIGH, N.C. – A little-known state fund flush for years with forgotten insurance policies and utility deposits soon will get lots of attention with projections its open spigot for college scholarships will run dry.

The Escheats Fund, now with $584 million, could go broke in 2012 if the Legislature doesn’t find another way to pay for student financial aid that’s drawing down its balance rapidly.

The fund is expected to provide at least $210 million in financial aid to college students this fiscal year, helping, among others, 54,000 students at University of North Carolina system campuses.

Lawmakers “need to sort of make a decision: either they find other sources for scholarships or reduce the rate that they’re paying out,” said new State Treasurer Janet Cowell, whose office manages the fund. Otherwise, Cowell said, future students won’t have as much access to grants and loans.

Lawmakers have tapped into the fund’s balance with increasing frequency in recent years. They’re aware of the trend, although fixing it is not as urgent as this year’s budget troubles.

“It was done to help more kids go to college, very simply,” said House Speaker Joe Hackney, D-Orange. “We have an entire session to figure out what we’re going to do about scholarships this year, and we re-examine that every single year.”

Cowell’s office estimates that without changes, the fund’s value will drop to $297 million by mid-2010 and fall to $83 million in 2011.

The demand for scholarships will only grow as the UNC system projects student enrollment to grow by 50,000 students, or more than 20 percent, in the next decade. At least one Republican said the dwindling Escheats Fund is a symptom of a larger problem with legislative budget-writers, most of whom have been Democrats.

“The creative financing that’s been used in recent years is catching up with us,” said Rep. Nelson Dollar, R-Wake, vice chairman of the House education university subcommittee.

The Escheats Fund is a pot of money where property unclaimed or forgotten by its previous owners are sent to Cowell’s office by banks, utilities, government agencies or insurance companies.

The treasurer tries to return held funds to their rightful owners and invests the rest of the money. The state constitution requires proceeds go toward aid for needy students attending public higher education institutions, including community colleges.

Valued at $184 million in 1998, the fund’s size has soared as companies sent more held cash. The additional money outpaced efforts by then-Treasurer Richard Moore to promote an online database that helped return up to $41 million annually to their owners.

Lawmakers historically used interest earned on the escheats for financial aid. But this decade, they have eaten into the fund’s principal, swapping out scholarship money paid through the state’s general operating funds.

The Escheats Fund transferred $101 million in principal to scholarship programs for the 12 months ending last June 30, according to the treasurer’s office.

This fiscal year, the principal will be doubled, mostly due to a $60 million requirement through Gov. Mike Easley’s EARN Scholars initiative, which funds $4,000 grants to students in low-income families so they can obtain a college degree debt-free.

“It’s a way that can really cut back on the amount they borrowed for college,” said Steven Brooks, executive director of the N.C. State Education Assistance Authority, which distributes student aid. “It’s a wonderful public policy.”

Easley had wanted to use taxpayer money for the program when he introduced it in 2007. But the General Assembly decided last year to earmark escheats for more than half the grants in part due to worsening budget numbers, said Sen. Tony Rand, D-Cumberland.

“The revenue estimate went down and the amount of money available,” Rand said. “It was simply a matter of trying to find available funds to allow this to happen.”

Budget-writers now must decide whether to spend another $40 million on the EARN Scholars program next year. Gov. Beverly Perdue is promoting college affordability. And the UNC system is seeking $23.4 million more for financial aid.

“We understand that we must protect the integrity of the Escheats Fund,” said Rob Nelson, the UNC system’s vice president for finance. “But we also know that we want to have enough need-based grant money so that every student … who is eligible receives those funds.”

A state law that says the Escheats Fund can’t fall below $400 million can be changed. Shifting scholarships more to taxpayer money may be difficult in a year when lawmakers may have to narrow a $3 billion spending gap.

Cutting scholarship aid would seem to be a bad political move.

Hackney and Rand said they understand that the fund’s faucet can’t be a torrent forever.

“This fund has existed for a long time to help students,” Rand said. “We really have to be careful.”

It can be confusing, but Schoolhouse Rock breaks it down.

RALEIGH, N.C.- The campaign for governor between Beverly Perdue and Pat McCrory will end in the same way it started – with allegations about illegal immigration.

Perdue’s campaign began running two radio ads Monday accusing McCrory of being soft on the issue. Perdue said she approved the ads because the Republican Governors Association had attacked her on the issue with a mailer that was addressed to her husband.

The narrator in one ad accuses McCrory of lying about her record. A man in another ad said “we’d be loco to vote for Pat McCrory.”

McCrory’s campaign manager Richard Hudson called the ad “an outrageous, personal and racist attack.”

A few days after the May primary, McCrory accused Perdue of failing to do enough about a state policy allowing illegal immigrants to attend community colleges.

CULLOWHEE, N.C. – Authorities now say a dead bear cub draped with Barack Obama campaign yard signs and left on the Western Carolina University campus was the result of a prank. Campus Police Chief Tom Johnson said Tuesday afternoon that seven students were identified as being involved in the incident, and it was determined that it was not a political statement.

A statement from the school said the students found the bear during a weekend camping trip, drove it to school in the back of a pickup truck and dumped it at the main entrance to campus.

Maintenance workers found the 75-pound bear cub Monday morning. The students told authorities they used the campaign signs to cover up the animal’s head wound and to keep blood from spilling onto the truck.

The price of college continues to surge, and financial aid isn’t keeping up. The Wall Street meltdown has hammered the stock market and college savings. And a college degree is ever more essential for finding a good job.

No wonder polls show voters want to know what, if anything, the two presidential candidates would do to make college more affordable.

Democrat Barack Obama and Republican John McCain have offered similar campaign pronouncements: A college education should be affordable to anyone, and the process of getting federal aid is more complicated than it should be.

But there are differences in how each would tackle the problem.

Obama’s proposals are more detailed – and more expensive. They reflect an assumption that government should do more to help students pay for college.

McCain’s proposals are more general and emphasize streamlining the aid system – improving but not necessarily expanding it. He calls for making more information available to parents and eliminating wasteful spending on pork-barrel university research projects.

Both candidates pledge to simplify financial aid.
 
A look at their proposals in some key areas:

NEW AID PROGRAMS
      The most sweeping proposal by either candidate is Obama’s call to provide most students with up to $4,000 a year in tax credits for college, in return for 100 hours of community service.

The Obama campaign says the plan would make two major improvements over the programs that it would replace – the HOPE and Lifetime Learning tax credits, which provide at most $2,000 annually.

First, it would be fully refundable, so low-income families who don’t pay enough in taxes to benefit from the full tax credit could still get $4,000. Second, aid would be awarded based on prior-year tax data, so families wouldn’t have to fill out lengthy federal aid forms and face a long wait to find out how much aid they can get.

Unlike Obama, McCain isn’t proposing new programs to help with college costs, but a senior adviser says the GOP candidate is committed to helping families, especially low-income ones, pay for college.

The adviser, Douglas Holtz-Eakin, said McCain’s approach uses taxpayer dollars more responsibly.

“We don’t have any new college proposals in terms of massive expansions of funding,” he said. “There is a budgetary reality; we have enormous spending pressures already. It would be irresponsible to go to every interest group and promise them lots of money. The other campaign does that. We don’t.”

Obama adviser Danielle Gray said all of Obama’s education proposals are paid for by cutting other federal programs, contracting and procurement reform, and eliminating spending on special projects pushed by members of Congress. The campaign puts the cost of the expanded tax credits at $10 billion.

PELL GRANTS
      For low-income students, Pell Grants, which don’t have to be repaid, are the most important federal aid program. This year 6 million students – virtually all with family incomes under $50,000 – will receive Pell Grants of up to about $4,700.

Because they target the neediest, Pell Grants are widely considered among the most effective aid programs. But over the past 20 years, demand has vastly outstripped supply. The maximum Pell Grant used to cover more than half of the cost of an average four-year public university; now it covers about one-third.

Congress has increased the maximum authorized Pell Grant, but in practice the increase is meaningless unless Congress and the next president fully fund the program – something that hasn’t happened for 30 years.

Obama pledges that Pell Grants will “keep pace” with increases in the cost of college. McCain does not commit to specific increases but would consider raising Pell awards if there is a pressing need and the budget allows, Holtz-Eakin said.

With the economy slumping, and Washington committed to a massive Wall Street bailout, the next president will be hard-pressed to maintain Pell levels, let alone increase them. A Bush administration official recently told Congress that Pell applications are running 10 percent higher than a year ago, and paying for the program may require spending increases of $6 billion – about 50 percent – next year.

STUDENT LOANS
      About $60 billion – nearly half of all public and private student-aid money – comes via the federal student loan program. The candidates have a major philosophical difference over how it should operate.

Currently, there are two parallel systems – students can borrow directly from the government, or take out loans from banks and other private lenders that are subsidized by the government.

Obama, who often mentions that he only recently finished paying off his own student loans, proposes moving the whole system to direct government loans and eliminating subsidies to banks. Last year, Congress made substantial cuts to those subsidies but did not eliminate them.

McCain, who attended the U.S. Naval Academy, which is free of charge, supports the dual system of government and private loans. Supporters of the current system say it provides competition that helps students, and say the federal government would be hard-pressed to administer the full program.

In some ways, the debate already has shifted. Experts point out that during the recent credit crisis, the government stepped in to prop up the subsidized lending program, so in practice the two programs already are merging.

Both candidates say they want to simplify the financial aid application process, and Obama wants to eliminate the Free Application for Federal Student Aid (FAFSA) form altogether. On Wednesday, Education Secretary Margaret Spellings planned to propose a new form that shortens the FAFSA from more than 100 questions to 26.

COLLEGE PRICES
      A recent survey by the College Savings Foundation found that one in four parents want the federal government to cap college costs. Neither candidate plans anything like that, or even smaller steps such as forcing schools to spend more from their endowments to hold down prices. That’s a relief to colleges, which resent interference from Washington.

The reasons why college prices are rising are complicated, and largely beyond the purview of the White House. Washington provides $86 billion annually in grants, loans and tax benefits to support students, but it’s state budgets that mostly determine public colleges’ list prices.

Critics say colleges share the blame, for failing to curtail their own spending. Families also bear some responsibility: While they gripe about rising prices, in the end, many still choose more costly schools. That could change in a prolonged economic downturn.

Michael Dannenberg, senior fellow with the New America Foundation and a former adviser to Sen. Edward Kennedy, D-Mass., says Obama’s proposals take the problem of college affordability more seriously than McCain’s. And he calls the tax credit a significant innovation.

“McCain’s message when it comes to increased tuition is, ‘You’re on your own,”‘ said Dannenberg, who has not worked for Obama’s campaign. “Obama’s message to families is, ‘We’ll give you more financial aid to help you with college costs, but your kids are going to have to help others.”‘

But Richard Vedder, an Ohio University professor affiliated with the conservative American Enterprise Institute, believes more spending on federal aid – such as what Obama proposes – will just encourage colleges to charge more. (However, as a member of Education Secretary Margaret Spellings’ higher education commission he signed on to recommendations that included more money for Pell Grants).

“I think this is just going to fuel the academics race rather than restrict it,” Vedder said. Spending more on aid means “treating the symptoms and not the disease.”