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More and more colleges and universities are hiking their minimum wage above what’s required by their states and the federal government.
The increases -- often motivated by concerns about equitable pay for all employees, changes in local ordinances or pressure from advocates for low-wage worker -- can cost millions. Yet many colleges that are raising pay say they have an obligation to do so.
“We are a higher-minded part of the economy, and you would expect that we would be among the first to be doing the right things for our employees,” said Charles Dougherty, president of Duquesne University, in Pittsburgh. Earlier this year Duquesne raised its minimum wage to $16 an hour -- more than double what’s required by state and federal law.
Pennsylvania is among the 24 states where the minimum wage is set at federal levels: $7.25 an hour. Yet some of private and public colleges in those states and others are choosing to offer a higher minimum wage than required.
The cost of living has increased about 10 percent since 2009, the last time the federal minimum wage was adjusted, according to figures from the U.S. Department of Labor. A person earning the federal minimum wage would have an annual income of just $15,000, and advocacy groups have been popping up across the country seeking a higher minimum wage.
At Duquesne, the decision to offer double the minimum wage has been years in the making. In 2010, the university was offering a minimum wage of $12 an hour.
“We began to think that it simply wasn’t fair to our lowest paid employees,” Dougherty said. “We are a Catholic university so part of what motivates us in a sense of responsibility to the people at the lower end of our payroll.”
Yet many of the institutions that increase their minimum wage aren’t religious. And several are public.
Duke University has 36,000 employees, and offers the roughly 400 workers who earn minimum wage $12 an hour, two-thirds more than the university is required by law in North Carolina. Before the hike, approved earlier this year, the institution’s lowest wage was $10.91 and hour, still higher than state mandates.
Last year Indiana University raised its minimum wage to $8.25 an hour, a dollar above the minimum wage required by state and federal laws, and this year the institution raised it again to $9 an hour. The change affects up to 11,000 of the IU system's $40,000 employees.
“We didn’t spend a lot of time thinking about whether or not it was mandated,” said MaryFrances McCourt, IU’s chief financial officer. “We were trying to think about what is the right thing to do for employees.”
Yet McCourt acknowledged the financial impact of the wage increase is significant. “It’s not a minor amount of money,” she explained. So far, the hikes have cost IU about $2.5 million, including $1 million in 2014 and $1.5 million in 2015.
“These decisions were made during a time when the pressure on the top line is tougher than ever,” McCourt explained.
“There’s a strong focus on keeping costs down, nonetheless you want to do the right thing,” she continued. “If you’re looking to hold tuition flat, there’s a myriad of ways you can look to hold costs. It’s easy not to think of employees, but we didn’t even let ourselves go there.”
At Duquesne, 170 of the university’s 2,300 employees have been affected by the wage increases since 2010, at a total cost of $500,000 to the institution, which has an annual operating budget of more than $300 million. Duke declined to disclose the financial impact of its minimum wage hike, but an official there did say the cost was not “enormously substantial.”
As more states and cities consider hiking their minimum wage, universities can find themselves in the midst an often passionate debate. When municipalities increase their minimum wage, private institutions must comply with the new laws.
But mandated increases have put public institutions in a tough spot. In many cases, public institutions have claimed that, because they’re autonomous entities or have constitutional protections, they don’t have to comply with municipal minimum wage laws.
Yet they’re often under enormous pressure to do so.
A handful of municipalities in California have increased their minimum wage in recent years -- Los Angeles, for example, passed a law this year that will eventually increase the city's minimum wage to $15 an hour -- but California’s colleges don’t have to comply. That’s because, as a state agency, California’s public universities are only required to pay the state minimum wage of $9 an hour.
Seattle passed a law this year that increases the minimum wage to $11 an hour. The law gives large employers three years to bring their minimum wage up to $15 an hour. The state’s minimum wage is $9.47 an hour.
The University of Washington, considered a large employer, is complying with the law, even though its lawyers believe the public institution is exempt from the mandate.
“It’s the right thing to do, but it’s not necessarily the easy thing,” said UW’s interim president, Ana Mari Cauce.
Cauce says that if UW raised its minimum wage to $15 an hour tomorrow, it would cost the institution a lump sum of $25 million. The cost may end up being less than that, given that employees would have received pay increases over the next three years anyway. Or it may be more: “One of the things we’re still grappling with is what this does in terms of compression of the salaries that are above” minimum wage, Cauce explained.
To cope with the annual operating increase, UW is already looking at cost saving measures. Administrators are considering back office and administrative efficiencies, and possible savings through attrition. The annual operating loss will need to be accounted for: “It’s not like it’s happening and manna is going to fall from heaven,” Cauce said.
“Seattle is an expensive city. Puget Sound is an expensive region. We certainly want our employees to make a living wage,” she continued. “It’s also going to be a struggle…. We’re going to need to really think differently on how we can get things done without it causing higher tuition for students, because that’s not the way we want to go.”
As they decide to increase minimum wages, institutions have different philosophies on student workers.
At Duke, student workers are excluded from the wage increase. Kyle Cavanaugh, Duke’s vice president for administration, says that’s because Duke bases its wages off of the market conditions in the Durham area and in higher education. Students, he said, usually aren’t supporting themselves or their families.
At Indiana and Washington, student workers earn the same minimum wage as staff.
Washington’s minimum wage increase to $11 an hour this year affected far more students than staff. Roughly 70 staff saw their wages increase under the new minimum wage. Meanwhile, more than 2,600 students received wage increases. As the university continues raising its minimum wage, it expects more and more employees to be affected.
“When we think about student affordability, that’s helping,” said McCourt, of Indiana. “For a university to say we’re bringing [the minimum wage up], but it doesn’t apply to students, they’re cutting a huge piece off the table.”
Unsurprisingly, minimum wage hikes have been popular at the universities instituting them. It’s at least one change in an era of many changes that administrators consistently receive positive feedback on.
“We’ve had uniform support,” offered Cavanaugh, the Duke administrator.Image Source:Getty Images
Sen. Claire McCaskill, a Missouri Democrat, suggested last week that she was in favor of “removing” the Clery Act, the law that requires colleges to provide and publicize information about campus crimes. In a statement late Wednesday night, though, she softened her language, saying through a spokeswoman that she had been referring only to the campus security law's reporting requirements.
While McCaskill -- who has promoted legislation that would toughen oversight of colleges on sexual assault -- has long been critical of the Clery Act, her statements last week were especially condemnatory. The comments, which came during McCaskill’s keynote address at last week’s Campus Safety National Forum, elicited cheers from campus law enforcement officials and concern from campus safety groups.
“I don’t need to tell you it’s flawed,” McCaskill said to the gathering of college security officials on Thursday. “To be honest with you, I am OK with removing the Clery Act completely.”
Adding that the Clery Act accomplishes little besides being "a waste of time pushing paper" for campus safety officials, McCaskill said she would ultimately like to see the law replaced with something that would provide a clearer picture of what crimes are taking place on campuses. "My goal is to remove [the Clery Act,]," she added. "Or at a minimum, simplify it."
The Clery Act requires colleges to annually disclose the number of particular types of crimes on campus and to provide timely warnings to students about ongoing criminal activity, such as an active shooter or a recent sexual assault. But critics like McCaskill, including many campus administrators, say Clery statistics do not accurately illustrate the prevalence of campus crime, as increases in the number of a particular crime may have as much to do with improved reporting techniques as an actual uptick in criminal activity.
McCaskill and Sen. Kirsten Gillibrand, a Democrat from New York, have sought to alter the Clery Act, as well as other facets of how sexual assault is handled on campuses, with a bill called the Campus and Accountability and Safety Act. The law would require campuses to conduct annual climate surveys regarding gender violence and sexual misconduct.
That legislation has not yet been voted on, but some amendments to the Clery Act did go into effect on Wednesday as part of the Violence Against Women Reauthorization Act. Colleges are now required to disclose reports of stalking and domestic violence.
The Clery Act does not have many fans among campus law enforcement officials, and McCaskill’s comments drew applause from the crowd at the Campus Safety National Forum on Thursday. A similar reaction was seen this week at the annual meeting of the International Association of Campus Law Enforcement Administrators in Nashville.
During a presentation about the role of the Clery Act and Title IX in sex crime investigations, Susan Riseling, chief of police and associate vice chancellor of the University of Wisconsin at Madison, said the Clery Act was a “cluster.”
Riseling said McCaskill would like to see the Clery Act repealed or at least stripped down to simply requiring colleges to provide timely information and warnings about ongoing crimes.
“That information is what might prevent someone else from becoming a victim, and timely warnings are really the point of Clery,” Riseling said. “Some of the best news I’ve heard was Sen. McCaskill saying ‘maybe we’d better throw out Clery.’ ”
The room of more than 100 college law enforcement administrators in Nashville broke out in applause.
In an open letter to McCaskill, the Clery Center for Security on Campus said it was “disappointed” by the senator’s comments. In the letter, the center listed a number of positive scenarios that are now possible thanks to the Clery Act, including students receiving text messages about active shooters and parents easily learning online about safety and security issues at a particular campus.
McCaskill made use of Clery data in her 2014 report on campus sexual violence, the center noted.
“The Clery Act was shepherded into existence by Connie and Howard Clery -- two parents who lost their only daughter, Jeanne, when she was raped and murdered in her residence hall in 1986,” the Clery Center stated. “They turned incomprehensible grief into incredible change in the effort to ensure no other family would experience such loss. It’s more than just paper work. It is meaningful policies that drive powerful action.”
On Wednesday, McCaskill’s office sought to clarify the senator’s comments.
"Claire’s criticism of Clery was specifically about its reporting requirements, which virtually everyone agrees are burdensome and need updating," Sarah Feldman, a spokeswoman for McCaskill, said. "She fully supports retaining many of the law’s other provisions, but would like to see crime statistic reporting simplified, along with the campus climate surveys her legislation requires."Students and Violence
The messy dismantling of Corinthian Colleges is moving through a federal bankruptcy court, as a judge mulls whether to halt loan repayments for up to 350,000 former students and the defunct for-profit chain seeks the court’s approval for the fire sale of its remaining assets – including trademarks, furniture and even old diplomas and typewriters.
Last month the U.S. Department of Education released a plan for Corinthian students to seek to have their debt erased.
As a result, the roughly 15,000 students who in the last year attended the 28 Corinthian campuses that shut down in April are eligible under the department’s closed-school loan discharge policy. ECMC, a nonprofit student loan guarantor, purchased most of the rest of Corinthian, creating the new Zenith Education Group to run it.
And, in an unprecedented action, the feds also said students who feel they were defrauded by their Corinthian campus, or that their campus broke state laws, can apply for debt forgiveness.
That means large numbers of the 350,000 students who took out loans to attend a Corinthian institution during the last five years could be eligible for some form of debt relief.
However, last week the department said it had received only 4,500 applications for closed-school discharges, 1,400 borrower-defense claims and 850 online requests for the government to halt debt collection.
Students must file their claims in bankruptcy court by July 20. The department last week announced that it had hired Joseph A. Smith, a high-profile mortgage settlement claim veteran, to oversee the debt-forgiveness process. And the department has created a web page with information for former Corinthian students who may be eligible. (Note: This paragraph has been changed from a previous version to clarify that the July 20 deadline applies to bankruptcy court claims, not debt-relief filings with the department.)
In the meantime, a group of former Corinthian students has asked the bankruptcy court to temporarily suspend the collection of all 350,000 students’ debt payments until the court can decide who is responsible for repaying them. The U.S. Department of Justice selected the group of seven former students to represent the interests of all Corinthian students.
In a hearing Tuesday, the federal bankruptcy court judge, Kevin Carey (not the Kevin Carey at New America), did not grant that freeze on repayments. But he did chide the department for not doing more to get the word out about its debt-forgiveness process.
“I’m not convinced that notice has been sufficient or broad enough to put people in a position to ask for it,” Carey said, according to a report by Reuters. He asked the department’s lawyers to find a better way of reaching Corinthian students.
The Education Department is using its records to identify borrowers who may be eligible for debt relief, said a department spokeswoman. “We plan to contact those borrowers to make them aware of their options through multiple channels, including email and regular mail,” she said via email. “We are also looking into other options, like advertising. We welcome the help of stakeholders and advocacy groups to help us get the word out.”
Ben Miller is senior director of the postsecondary education program at the Center for American Progress. He previously worked at New America and at the Education Department.
Miller asked why the feds wouldn’t temporarily halt collection proceedings on defaulted loans by Corinthian students while some of those former students work on their defense-against-repayment petitions and the special master locks in the debt-relief process.
“If they might get them discharged, why not pause efforts for defaulted loans for a few months just to work out the details?” he said via email. And if those students aren't eligible for a discharge, "then all you’ve lost is a couple of months of collection efforts. It’s not like the obligation is gone.”
Furnishings For Sale
The Obama administration’s Corinthian debt forgiveness plan was unveiled after months of prodding by Senate Democrats and consumer groups, who argued that students were hoodwinked into taking out loans to attend a fundamentally fraudulent operation.
The process may soon apply to students from other for-profits, too.
Arne Duncan, the education secretary, said recently that Corinthian “will not be the last domino to fall” in the for-profit education industry. “This is our first major action on this but obviously it won’t be the last,” he said.
As a result, the department sought to create a special-master-led process that is “durable, not just for Corinthian but beyond,” said Under Secretary of Education Ted Mitchell.
Yet the department stopped short of allowing Corinthian students to seek to have their debt erased as part of a group action, rather than applying individually. Consumer groups, Senate Democrats and former Corinthian students who went on “strike” to stop paying their loans had pushed for the group option.
Even so, the department already has decided that roughly 40,000 former students of Corinthian’s Heald College are eligible to file borrower defense appeals. That’s because the feds determined that Heald deceived students with nearly 1,000 instances of misleading job placement claims. The department slapped a $30 million fine on Corinthian based on those findings.
The company, or the lawyers that represent what’s left of it, don’t have that money. But the federal government would be on the hook for $544 million if all of those students applied.
The 12 Heald campuses, all of which are on the West Coast or in Hawaii, were considered Corinthian’s crown jewels prior to the chain’s collapse last year. The company bought Heald for $395 million in 2010.
Now Corinthian is seeking to sell its Heald campuses and other assets. A K-12 charter school outside Sacramento will buy one of the campuses, the Sacramento Business Journal reported.
Heald is also selling its trademarks, copyrights and domain numbers as part of the bankruptcy court’s Chapter 11 process. For sale is its trademark: “Get In. Get out. Get ahead.” So is the www.HealdCollege.com domain, as well as “historical” items from the 150-year-old institution, including old diplomas and typewriters.
Assets from the for-profit chain’s other brands -- Everest and WyoTech -- are also for sale. Earlier this week, Corinthian filed a notice in court of its proposed sale of “any and all furnishings, fixtures and equipment” from the former Everest Institute College located in Cross Lanes, West Virginia.
An outfit called Liquid Asset Partners is the purchaser, according to the filing. The price: $45,000.For-Profit Higher EdThe Policy DebateImage Source:Heald College