Tag: Connecticut

  • Officials in Connecticut Propose New Graduate Student Loan

    Officials in Connecticut Propose New Graduate Student Loan

    The loan program would need $30 million for its first year, based on calculations of how much Connecticut students take out in Grad PLUS loans.

    Photo illustration by Justin Morrison/Inside Higher Ed | Getty Images | Rawpixel

    After President Donald Trump’s One Big Beautiful Bill Act (OBBBA) overhauled federal student loans, college affordability advocates worried that those changes would severely restrict who has access to higher education—especially graduate programs. Now, lawmakers in Connecticut are taking steps to ensure students in the state can continue to afford those degrees.

    Rep. Gregg Haddad, a Democrat who co-chairs the Connecticut legislature’s Higher Education Committee, announced a plan last week to create a new state-level student loan program to fill in the gap left by the elimination of Grad PLUS loans, a 20-year-old loan program that helped expand graduate education for middle- and low-income students. The program will be open to any student studying at a graduate program in the state.

    Josh Hurlock, deputy director of the Connecticut Higher Education Supplemental Loan Authority (CHESLA), a quasi-public body that administers Connecticut’s state-level student loans, said the organization is hoping to launch the new program in time for students to take out loans for the 2026–2027 academic year.

    “The Grad PLUS program historically has had very little credit check, so it’s been accessible to students of all credit qualities,” Hurlock said. “So, with the program going away … we want to make sure that students and schools have financing options available for their graduate students, and students and schools need to know what’s available sooner rather than later as we approach the fall semester.”

    The program would require $30 million in funding for its first year, based on calculations that students in Connecticut take out between $90 million and $100 million in Grad PLUS loans annually. (Those already receiving the loans will be grandfathered in.) Two-thirds of that would come from a bond that CHESLA will issue, while the remaining $10 million would have to come from state allocations. Haddad said he is hoping the funds can be drawn from a $500 million emergency reserve the state created in November specifically to offset federal cuts.

    Interest rates and borrower fees have not yet been determined, “but we think we can come up with an attractive product and solve this problem for Connecticut students,” Haddad said.

    Eliminating Grad PLUS loans is just one of the restrictions on federal student loans included in the OBBBA. The legislation also placed caps on how much borrowers can take out in federal loans for graduate programs and on Parent PLUS loans for dependent undergraduates. Proponents of the limits argued that uncapped federal loans encouraged universities to increase their tuition fees, creating the student debt crisis. But supporters of federal student loan programs argue they opened the door to graduate education and careers in fields like medicine for students who previously would not have had those opportunities.

    Grad PLUS loans will officially end and the caps for other federal loans will go into effect in July. Administrators at several institutions with a large number of graduate students told Inside Higher Ed that they’re still working to figure out how to close funding gaps for their students.

    Filling in the gap left behind by Grad PLUS loans is especially important because Connecticut, like most U.S. states, struggles with a shortage of workers in certain professions, like nurses and teachers, Haddad said.

    “We have a keen interest in making sure that we have a robust pipeline of people who want to enter those professions,” he said. “And we’d like to remove any roadblocks to having them achieve and complete their degrees so that they can get to work providing the services that people need in Connecticut.”

    Peter Granville, a fellow at the Century Foundation who researches college affordability, said that it’s wise for states to consider how they can support students in the absence of Grad PLUS funding.

    “State leaders know that their economies depend on these students being able to attain degrees in fields like education and nursing,” he said. “States will be worse off if [they] completely depend on private lenders filling gaps that they may or may not be inclined to fill.”

    Haddad said that the proposed loan program has been received extremely well by both the public and his fellow lawmakers, whom he is hopeful will support the proposal once their legislative session begins in February.

    “I was struck when we had our press conference the other day—the room was filled with nurses and social workers, physical therapists and educators from across the state,” he said. “I think it’s an indication that there’s a real problem we need to fix.”

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  • Connecticut Democrats pitch plan for state-level graduate loan program

    Connecticut Democrats pitch plan for state-level graduate loan program

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    Dive Brief:

    • Democratic leaders in Connecticut are proposing a new state graduate student loan program to fill a vacuum created by the federal lending pullback built into Republicans’ massive spending bill. 
    • That plan would expand the reach of the Connecticut Higher Education Supplemental Loan Authority, using up to $20 million of its funds to create the loan program, according to a press release. It also calls for $10 million in state funding. 
    • The program could reach over 2,000 students in its initial phase, a CHESLA official said at a press conference Wednesday. The chairs of the General Assembly’s education committee plan to introduce and push for the proposal in the upcoming session.

    Dive Insight:

    The federal bill set to take effect in July, dubbed the One Big Beautiful Bill Act, will bring sweeping changes to the federal student loan system, with the largest impacts landing on graduate students and programs. 

    The new law sunsets the Grad PLUS loan program, which allows graduate students to borrow up to the cost of attendance. When it launched 20 years ago, Grad PLUS was the largest new student aid program in decades. 

    Along with the program’s end, OBBBA sets new caps on annual and total borrowing. Federal loans will max out at $100,000 for graduate students and double that for professional students.

    Just who is considered a graduate or professional student is no small financial matter, and one that regulators are mulling. The U.S. Department of Education plans to propose regulations that would exclude some health professions — including nursing, occupational therapy and physician associates — from the definition of “professional” that carries a higher loan cap. 

    Much uncertainty hangs over the federal loan changes and could put pressure on states to engineer their own solutions, as Connecticut is considering. 

    “We can ensure that students have the ability to become a doctor or scientist or a nurse or an educator and have their career choice determined by their drive and their talent — not the size of their bank account,” Rep. Gregg Haddad, co-chair of the state House’s Higher Education and Employment Advancement Committee, said at a press conference Wednesday. 

    Haddad and others estimate Connecticut graduate students currently receive $90 million in Grad PLUS loans, leaving a large financing gap in the state once the program ends. 

    The plan to create a state-level loan program would use CHESLA’s existing infrastructure and bond authority, while state funding could make loans more affordable, said Josh Hurlock, deputy director of CHESLA, at the press conference. 

    “The plan is not to just replace the Grad PLUS program,” Hurlock said. “The goal is to provide a more affordable financing option for Connecticut graduate students.” 

    Democrats control both chambers of Connecticut’s legislature as well as the state’s executive branch. 

    Where states don’t create their own lending programs, graduate students could be forced into the private lending market to make up shortfalls in federal loans. 

    Currently, private lenders play a “minimal” role in the market, researchers with the Federal Reserve Bank of Philadelphia’s Consumer Finance Institute said in a recent analysis. 

    The study found that 28% of graduate student borrowers in recent years took out loans over the cap levels set by OBBBA. Of those, 38% had either subprime credit scores or no score at all, meaning they would struggle to borrow in the private sector without a co-signer. 

    Those students could also face higher interest rates and less generous terms from private lenders compared to loans from the federal government, the researchers pointed out. 

    Connecticut officials alluded to this possibility when announcing their proposal. 

    “These arbitrary ceilings do not reflect the reality of rising tuition, and they’ll force students to turn to a predatory private market for lenders that will impose higher interest rates with fewer protections,” Haddad said.

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  • Audit sheds light on state-issued credit card misuse in the Connecticut college system

    Audit sheds light on state-issued credit card misuse in the Connecticut college system

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    Dive Brief:

    • A state audit of employee spending practices at the Connecticut State Colleges and Universities system found several financial transactions that broke university policies or lacked adequate documentation. 
    • Comptroller Sean Scanlon detailed over $19,000 in spending on food by system Chancellor Terrence Cheng in fiscal years 2022 through 2024, by far the majority of spending on his institutional credit card. Violations included missing receipts, missing guest lists and purchases of restricted items like alcohol.
    • Scanlon’s probe came at Connecticut Gov. Ned Lamont’s request after CT Insider reported Cheng spent lavishly on meals with a state-funded credit card over the past few years.

    Dive Insight:

    The report from CT Insider alleged that Cheng had spent as much as $1,114 at restaurants in a week, and paid for private chauffeurs despite having access to a state-provided car at the time. Once, he spent nearly $500 for the service, the outlet reported.

    Scanlon’s office concluded that “while not technically violating state or university policy, we found that, in the absence of sound, comprehensive policies, the Chancellor utilized poor [judgment] when making P-Card purchases that were especially troubling given the financial stress on the CSCU system.”

    The audit zeroed in on spending on food and transportation by the chancellor. Meals designated as business meetings accounted for 70% of the spending on the official’s card, and some transactions exceeded the $50 meal limit for system employees, the audit found. It also found 18 food purchases with tips deemed excessive — above 22% — which the report noted “is not a policy violation but a questionable use of university funds.” 

    Of the chancellor’s food-related transactions reviewed by the comptroller’s office, 43% had either no itemized receipts or were missing receipts entirely. 

    Among other violations were 30 instances where Cheng paid sales tax. That’s a violation of policy because institutional credit cards — also known as P-cards — are exempt from sales tax but must go through a process with vendors to credit those taxes.

    However, the comptroller found that Cheng did not technically violate policy because as chancellor he can “override the policy at his own discretion.”

    As for chauffeur use, the report noted three times when Cheng — who lives in New York state — paid for a private car service with his P-card, including two trips even more expensive than the one reported by CT Insider. Scanlon determined that these services did not represent violations but said that they “are of note as the Chancellor was provided with a state vehicle for their use.”

    In an emailed statement Thursday, Cheng said that he appreciated the audit’s thoroughness and that the system is “committed to implementing stronger controls, policies, and comprehensive training.”

    The system review also found issues with P-card use by other leaders, including the interim president of Southern Connecticut State University, Dwayne Smith. The audit found that Smith’s P-card “shows a wide variety of infractions spanning almost every category of restricted purchasing and failure to follow many of the policy requirements for documentation and reporting of transactions.”

    Specifically, the comptroller’s office faulted Smith for failing to keep receipts, as well as purchasing tickets to an outside football game without stating its business purpose, among other issues. 

    In an emailed statement, Smith thanked the comptroller for his analysis and recommendations, adding that many of his office’s P-card transactions relate to his community engagement activities. 

    “These meetings have yielded significant support for our scholarship programs, internships, mentoring, and ultimately, enhanced job opportunities for our graduates,” Smith said.

    Scanlon’s audit found many other issues across the Connecticut college system’s staff. His office’s report lists 10 recommended changes the system should make, including reinstating internal audits, establishing a central policy for P-card use, creating accountability measures for card misuse and establishing a policy for vehicle use. 

    “Unfortunately, this audit revealed troubling gaps in oversight and questionable spending practices,” Scanlon said in a Wednesday statement. “Our recommendations provide a clear path forward with more comprehensive policies, consistent enforcement, and greater overall accountability.”

    In his statement, Cheng said the recommendations would “support the goal of accountability and transparency across the system.”

    He added, “The system has begun to take steps in this direction and over the next 100 days, I’ve instructed my team to implement recommendations to improve compliance and reporting.”

    The system’s governing board this fall moved to increase oversight of spending in its central office. As part of that process, the system recently hired a new chief compliance officer and legal counsel.

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