Washington News Brief

By Sharon H. Bob, Ph.D., Higher Education Specialist, Powers Pyles Sutter and Verville, PC

Senate HELP Committee holds hearing on institutional risk sharing

On Jan. 30, 2018, the Senate Health, Education, Labor and Pensions (HELP) Committee held a hearing titled, “Reauthorizing the Higher Education Act: Accountability and Risk to Taxpayers.” Chairman Lamar Alexander (R-TN) opened the hearing by expressing concern over the large number of the President’s nominations for senior positions at the Department of Education that have not been confirmed by the Senate. He said that the Trump Administration used to share the blame because it was slow to make nominations, but now “the responsibility lies solely with the Democratic minority, which is insisting on taking most of one week to confirm each nominee, knowing that there is not much time for nominations on the Senate floor.”

In addressing the topic of the hearing, Senator Alexander said that “Congress should consider new accountability measures that are more effective at holding all individual programs at all colleges and universities accountable for the ability of their students to pay back their loans.” Senator Alexander went on to say that an important part of accountability is to find ways to make sure students are not borrowing more money than they will be able to pay back.” He noted that there were some worrisome signs with almost half, or 46 percent, of the borrowers repaying their loans and a little more than half, or 54 percent, of the borrowers who are in default or are not making payments on time. Of those repaying their loans, almost two-thirds of them are in the income-based repayment program, which was designed as a safety net for low-income borrowers, but has become the standard repayment plan. Chairman Alexander concluded his opening remarks by stating that he wanted to hold all schools accountable when students borrow too much and are not prepared to repay their loans by providing students with more data on the cost of college and what their earnings are likely to be; by encouraging schools to counsel students about the amount of money they can afford to borrow; and by having schools share in the risk.

Ranking Member Patty Murray (D-MA) said that both students and taxpayers must get a return on their investment in higher education and argued for a stronger accountability system. However, Senator Murray stated that the accountability system should not be a “one size fits all” approach, but should take into account the different sizes and types of institutions, such as community colleges, online colleges, and for-profit colleges, which she noted had a troubling history of sacrificing student success for financial gain. Senator Murray said that schools should be held accountable not only for students obtaining jobs after graduation, but at all phases of the student’s education. She also asserted that colleges that saddle students with debt they cannot repay should not be able to benefit from taxpayer dollars. She favors a stronger accountability system that builds on current measures but does not replace them. During the hearing, members of the Senate HELP Committee and witnesses discussed for-profit colleges and the need for different or stricter accountability standards. Senator Elizabeth Warren (D-MA) called for heightened accountability for for-profit colleges and accused them of being subject to the interests of financial investors or demonstrating quarterly profit growth to Wall Street and being more often sued or investigated for defrauding students than institutions in other sectors of higher education. She also opposed the use of mandatory arbitration agreements. Senator Warren also noted that colleges get access to federal dollars no matter what the quality of the education that they provide. The federal government and accreditors “rubber stamp” their approvals and students are then led to believe that they will get a good return on their investment.

Senator Tim Kaine (D-VA) discussed the 90/10 rule and said that the rule encourages institutions to target veterans. He encouraged the closure of the “loophole.” Ben Miller, from the Center for American Progress, testified that for-profit colleges can become about recruitment and not quality if they are in the wrong hands. Mr. Miller stressed the need to examine ownership decisions. In response to a question from Senator Alexander, Dr. Anthony Carnevale, from the Georgetown University Center on Education and the Workplace, said that standards should be set but they should be set for all sectors of higher education. Dr. Carnevale also said that students who are investing in higher education need to have better information to make decisions that have lifelong economic consequences.

After the question and answer session, Chairman Alexander wrapped up the hearing by noting that the HELP Committee will begin writing a bill to reauthorize the Higher Education Act in the “next few weeks,” and he hopes to mark up the bill in the spring 2018. He added that he is holding discussions with the Democrats with the goal of releasing a bipartisan package.

House Education Committee holds hearing on protecting privacy

On Jan. 30, 2018, the House Education and the Workforce Committee held a hearing titled, “Protecting Privacy, Promoting Policy: Evidence Based Policymaking and the Future of Education,” which focused on the use of data. Chairman Virginia Foxx (R-NC) opened the hearing by stating that schools should be providing program-level data to students and she hoped that what they learn will be helpful to Congress in updating and modernizing the laws. Chairman Foxx was interested in obtaining support for her position that there should not be a single unit record database, which is currently banned in the Higher Education Act. Ranking Member Bobby Scott (D-VA) said that research and data collected by the federal government should be used to shape education policy just like data does in other parts of the federal government, such as defense or agriculture.

Chairman Foxx asked the witnesses whether data was completely secure and they agreed that there was no “silver bullet” in protecting data because there are always those individuals who can breach data. While the members and witnesses agreed that data is important and should be protected, no one was able to assert that all data could be protected. Witnesses did agree that the use of aggregate data rather than individual data is an important safeguard to protect individuals’ information.

OIG releases report regarding ED’s communication on the costs of the income-driven repayment plans and loan forgiveness programs

On Jan. 31, 2018, the Office of Inspector General (OIG) released a report titled, “The Department’s Communication Regarding the Costs of Income-Driven Repayment Plans and Loan Forgiveness Programs (ED-OIG/A09Q003).” In the past, the Department of Education always made a profit on its student loan portfolio. However, according to the OIG report, they project that the Department will be lending more money than borrowers will be repaying due to the fact that the participation rates in the income-driven repayment (IDR) plans and loan forgiveness plans have grown rapidly. The Department predicts that it will be $36 billion short of what is needed to cover the outstanding debt and accrued interest. The report stated that the overall portion of outstanding debt in Direct Loans being repaid through IDR plans increased 625 percent between FY 2011 ($7.1 billion) and FY 2015 ($51.5 billion). The number of borrowers enrolled in IDR programs has also increased by more than 600 percent.

The report stated that the Department of Education should have enhanced its communications regarding cost information related to the income-driven repayment plans and loan forgiveness programs to make it more informative for decision-makers and the public about these plans and programs. “Decision makers and others may not be aware of the growth in the participation in these IDR plans and loan forgiveness programs and the resulting additional costs. They also may not be aware of the risk that for future loan cohorts, the federal government and taxpayers may lend more money overall than is repaid from borrowers.” The report recommended that the Department enhance its communications regarding cost information for the federal student loan programs and the loan forgiveness programs and annually publish cost information.

A copy of the OIG report is found at: https://www2.ed.gov/about/offices/list/oig/auditreports/fy2018/a09q0003.pdf

A copy of the GAO Report (GAO-18-5) is found at: https://www.gao.gov/products/GAO-18-5

Senate Democratic Caucus releases its HEA reauthorization principles

On Feb. 1, 2018, the Senate Democratic Caucus released a document called “Senate Democratic Caucus Higher Education Act Reauthorization Principles,” which outlines their priorities for the reauthorization of the Higher Education Act (HEA). The document reflects the thinking of the Senate Democrats, led by Ranking Member of the Senate Committee on Health, Education, Labor and Pensions (HELP) Patty Murray (D-WA). Many of the proposals show how far apart the Republicans and Democrats are on key issues. “While our nation’s higher education landscape has changed drastically over the last five decades, our core values have not.” The document goes on to say: “The reauthorization of the HEA must focus on four key principles: affordability, accountability, access, and protecting the rights and safety of all students.”

Democrats believe that any reauthorization of the HEA must include the following four principles:

1. Affordability and student debt:

• Reducing college costs: The HEA reauthorization must focus on providing a path for students to graduate from college debt-free. Tuition-free community colleges or two years of postsecondary education are important for lowering the costs.
• Pell Grants: The Pell Grant program must be strengthened to ensure a commitment to low-income students. Regular shortfalls and surpluses have put the program on an unstable footing.
• Debt relief: The HEA must reduce the burden for borrowers on their private and federal loans. Borrowers should be able to refinance their student loans. Seniors, veterans, and others with disabilities should be afforded debt relief.
• Student loan repayment and servicing: The process of repaying student loans is too complicated and poorly managed. Borrowers should have access to better information and a simpler process for enrolling in income-driven repayment plans.

2. Accountability and transparency:

• Outcomes and data: The HEA reauthorization should include provisions that require more transparency in school performance, overturn outdated restrictions on student-level outcome data, and crack down on worst-performing and predatory schools.
• Continuous quality improvement: Colleges with low student loan repayment rates and high default rates should be held accountable for their use of federal student loans, and colleges with poor access, persistence, or completion rates should be accountable for their use of grant aid. The triad must be strengthened, and accreditation must be improved to serve as an effective gatekeeper of federal dollars by holding low-performing institutions to high standards.
• For-profit colleges: In the wake of the closures of Corinthian Colleges and ITT Tech, extra scrutiny must be used for for-profit colleges to reduce their incentive to maximize profits over student success.

3. Access and success:

• Serving low-income students and strengthening campus-based aid: Colleges should be encouraged to enroll and graduate more low-income students. Colleges should be incentivized to improve student success, including persistence, completion, earnings, and placement.
• Closing college pipeline gaps: The HEA should address the high school graduation to college enrollment gap for low-income and first-generation college students by supporting strategies such as dual enrollment and early college high schools. The transfer process must be improved since untold numbers of students lose academic credit or drop out of higher education entirely.
• Historically underrepresented students: The HEA reauthorization should promote access and shared prosperity for groups of students that have been historically underrepresented in higher education.
• Improving teacher preparation programs: There continues to be a need to improve the diversity of the teaching force, reform teacher preparation programs, and address teacher shortages.
• Supporting institutions: The HEA should continue to support students attending Minority Serving Institutions (MSIs).
• Today’s student: Financial aid policies and support services should serve a student population that is fundamentally different than the student population during the last reauthorization.

4. Protecting student safety and rights:

• Campus sexual assault: Every student deserves to be safe on campus and the HEA must include guidelines to prevent sexual violence.
• LGBTQ students: These students should not be subjected to bullying and harassment.
• Students with disabilities: Students with all types of disabilities should have access to all materials and services provided by institutions of higher education.
• Hazing: The HEA should support transparency and a comprehensive agenda to support institutions who are struggling to address the issue of hazing.

Ranking Member Murray had harsh words for the white paper released by Chairman of the HELP Committee Lamar Alexander (R-TN): “They would move us in the wrong direction and make it very clear we have some serious and tough issues to work through as we negotiate a comprehensive reauthorization of this important legislation, but I remain hopeful we can get this done as quickly as possible.” She also said that rewriting the law should prioritize putting “students and taxpayers first – and that means strengthening our existing accountability provisions for schools that could be taking advantage of students, not weakening or eliminating them. And we should be holding all colleges accountable for successful outcomes for all groups of students.”

A copy of the Senate Democrats’ priorities is found at: http://cecu.informz.net/cecu/data/images/GR%20Uploads/Senate%20Democrats%20HEA%20Priorities.pdf

Senator Alexander seeks input on higher education accountability measures

On Feb. 1, 2018, Chairman of the Senate Health, Education, Labor and Pensions Committee Lamar Alexander (R-TN) released a white paper on “Higher Education Accountability,” which provides an overview of the federal accountability requirements that currently exist in higher education. It also considers a number of concepts or proposals for updating these measures. Chairman Alexander asks for public feedback on the proposals to ensure that students at the 6,000 colleges and universities are receiving degrees worth their time and money. The deadline was Feb. 15, 2018.

The white paper argues that Congress should end the use of cohort default rates as the primary federal accountability metric, repeal the 90/10 rule, and prohibit implementation of the gainful employment rule. Instead, the white paper proposes that Congress move toward a programmatic repayment measure to measure student success.

A copy of the press release is found at: https://www.alexander.senate.gov/public/index.cfm/pressreleases?ID=F7028D4D-8822-431B-AF77-C18D3E96DEA7

A copy of the white paper is found at: https://www.alexander.senate.gov/public/_cache/files/cfd3c3de-39b9-43dd-9075-2839970d3622/alexander-staff-accountability-white-paper.pdf

CBO releases analysis of PROSPER Act

On Feb. 6, 2018, the Congressional Budget Office (CBO) released its cost analysis of H.R. 4508, Promoting Real Opportunity, Success, and Prosperity through Education Reform Act (PROSPER Act), the House Republican bill to reauthorize the Higher Education Act, which passed out of the House Education and the Workforce Committee on Dec. 12, 2017. The CBO analysis estimates $14.6 billion in savings due to changes in the loan and Pell Grant programs. The elimination of the Public Service Loan Forgiveness (PSLF) Program, elimination of subsidized loans for undergraduate students, and modifications to the loan forgiveness options would generate the most savings. New costs to the federal government would result from the creation of a new Pell Grant Bonus Program for students enrolled in 15 credits or more a semester and the elimination of the origination fees.

A copy of the CBO report is available at: https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/hr4508.pdf

Senate HELP Committee holds hearing on improving college affordability

On Feb. 6, 2018, the Senate Health, Education, Labor and Pensions (HELP) Committee held a hearing titled, “Reauthorizing the Higher Education Act: Improving College Affordability.” The differences of opinion between the Republicans and Democrats were readily apparent during the hearing. Chairman of the HELP Committee Lamar Alexander (R-TN) said: “It is never easy to pay for college, but it is easier than many think and it is unfair and untrue to make students think that college is unaffordable. It is true that college costs have been rising and a growing number of students are having trouble paying back their debt. The purpose of this hearing is to look at what steps the government can take to help improve college affordability for students.” Ranking Member Patty Murray (D-WA) said that discussions on college affordability need to take a holistic approach, considering all aspects of college. She said that “I’m sure there will be a number of issues we don’t agree on – but I believe there is one question that should guide our negotiations. The question we have to ask ourselves is, ‘Will this reauthorization of the Higher Education Act leave students better off.’”

Senator Alexander suggested that they consider the Bennett Hypothesis, which was a concept introduced by former Secretary of Education William Bennett in 1987, when he “argued that rising federal student aid has an impact on rising college tuition.”

Concern was raised about the default rate of black college students. Senator Elizabeth Warren (D-MA) noted that black college students default at “five times the rate of white college graduates.” Dr. Sandy Baum, Senior Fellow at the Urban Institute, stated that there is a debt crisis among black students and many students attending for-profit institutions are borrowing more than other students.

Dr. Baum testified that there are many factors contributing to college affordability including the value of the education. Dr. Baum made three proposals for addressing college affordability: ensuring financial aid programs are “simple, predictable, and easy to apply for” and that students and families have information about aid early on; enacting policies to help students make better choices, such as placing restrictions on institutional eligibility for Title IV aid; and designing an “effective federal incentive” to increase state funding for need-based grant aid and public higher education.

During the period of questioning, Senator Warren stated: “The higher education law we write in this country could be the law of the land for the next decade. It would be unconscionable for us to write a law without making college more affordable and without dealing with the more than 40 million Americans who are struggling to pay off $1.4 trillion in student loan debt. I think that should be our first job.”

Regional accreditors release report on graduation rate information project

On Feb. 6, 2018, the Council of Regional Accrediting Commissions (C-RAC) released the results of the first year of their project, which gathered information on graduation metrics. C-RAC, an umbrella group comprised of the seven regional higher education accrediting agencies, launched the Graduation Rate Information Project in September 2016. C-RAC examined the Integrated Postsecondary Education Data System (IPEDS) “Student Right to Know” graduation rates at four-year institutions that had graduation rates at or below 25 percent and two-year institutions that had graduation rates at or below 15 percent. “A One-Year Review of the Council of Regional Accrediting Commissions’ Graduation Rate Information Project” reported the following findings:

• Federal graduation rates are incomplete but improving because they only measure first-time, full-time students completing their degree within three years for community colleges and six years for four-year institutions. The vast majority of the students attending these institutions are not first-time, full-time. In September 2017, the Department of Education began reporting a broader range of outcome measures.
• The more complete federal data and other non-federal graduation rate data from sources such as the National Student Clearinghouse are more robust than what were previously reported.
• Graduation rates matter, but accreditors also use other types of outcome data to identify struggling institutions. Accreditors also rely on transfer rates, non-federal graduation rates, course completion rates, retention rates, employment rates in fields central to the mission of the institution, and other data.
• Colleges and universities with low graduation rates are aware of the importance of raising graduation rates and are bolstering advising and student support services.

C-RAC concludes that the federal government, accreditors, and institutions can do more to better understand and improve graduation rates.

A copy of the report can be found at: https://docs.wixstatic.com/ugd/68d6c2_5bc3e173acf242e585c4c07fc8660dd9.pdf

Study finds that students who enrolled in certificate programs at public institutions experience better economic gains than students who enrolled at for-profit institutions

On Feb. 9, 2018, the Brookings Institution released a paper by Stephanie Riegg Cellini, an associate professor of public policy and public administration at George Washington University, and Nicholas Turner, a senior economist at the Federal Reserve Board of Governors, that reports on an analysis between students who enrolled in certificate programs at public institutions versus students who enrolled in certificate programs at for-profit institutions. Comparing the Department of Education’s gainful employment data (GE) matched with the Internal Revenue Service data, the report found that students from for-profit institutions experienced lower earnings gains, larger debt, and were less likely to be employed after leaving the program.

A copy of the report is found at: https://www.brookings.edu/blog/brown-center-chalkboard/2018/02/09/gainfully-employed-new-evidence-on-the-earnings-employment-and-debt-of-for-profit-certificate-students/

Trump administration releases FY 2019 budget proposals

On Feb. 12, 2018, the Trump Administration released its FY 2019 budget request (affects the 2019-2020 award year), which proposed $3.8 billion in cuts to federal education funding. The White House budget proposal will not be approved or even be seriously considered but it demonstrates that the Trump Administration agrees with the thinking of the House Republicans since there are many similar proposals to those included in the PROSPER Act, the Higher Education Act reauthorization bill that passed the House Committee on Education and the Workplace on Dec. 13, 2017.

The proposal would affect the federal student aid programs as follows:

• Pell Grant program: Funding would be available for a maximum Pell Grant award of $5,920 and Pell Grant eligibility would be expanded to include short-term programs that provide students with a credential, certification or license in an in-demand field “with sufficient guardrails in place to balance students’ needs with protecting taxpayers’ interests.”
• FSEOG: Funding would be eliminated.
• FWS: Funding would be cut and eligibility for graduate students would be eliminated.
• Direct Loans: The subsidy for Direct Loans for undergraduate students would be eliminated.
• Repayment plans: The income-driven repayment (IDR) plans would be consolidated into a single plan with a monthly cap of 12.5 percent of the borrower’s discretionary income and a 15-year repayment term for undergraduates, and a 30-year repayment term for graduates. Remaining balances would be forgiven. The budget proposes to auto-enroll severely delinquent borrowers in the IDR plan, institute a process for the borrower to consent to share income data for multiple years and streamline ED’s ability to verify applicants’ income data held by the IRS.
• Public Service Loan Forgiveness (PSLF) Plan: The PSLF Plan would be eliminated.
• Shared accountability: The proposal calls for “shared accountability” between the federal government and the colleges and universities for repayment of federal student loans.
• FSA’s “Next Generation Financial Services Environment:” The budget proposal would support new mobile phone engagement for all customer interactions.

Copies of the Fact Sheet and Full Budget Request are included in the Department of Education’s announcement found at: https://www.ed.gov/news/press-releases/presidents-budget-expands-education-freedom-protects-vulnerable-students

Borrower defense to repayment rules delayed until July 1, 2019

On Feb. 14, 2018, the Department of Education posted a Notice in the Federal Register that the borrower defense to repayment regulation would be delayed until July 1, 2019. The delay of the rule came around the time that the negotiated rulemaking sessions for the borrower defense to repayment rule concluded.

A copy of the Notice is found at: https://www.gpo.gov/fdsys/pkg/FR-2018-02-14/pdf/2018-03090.pdf

Reauthorization of the HEA is likely to take awhile

The higher education community has just begun to examine the impact of the Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER Act), the bill to reauthorize the Higher Education Act (HEA), that was passed out of the House Education and the Workforce Committee on Dec. 12, 2017 by a vote of 23 to 17, along party lines. The Democrats unanimously opposed the bill and criticized it for repealing the FSEOG Program and other programs that target low-income students and for failing to do more for students with student debt.

While some policy analysts have praised the PROSPER Act because it would provide incentives for students to graduate in four years, it would eliminate the origination fees, and it would expand the Federal Work-Study Program, many argue that the bill makes college more expensive since it would eliminate the subsidy on undergraduate loans, it would eliminate the FSEOG program, and it would eliminate borrowers’ repayment options, such as the Public Service Loan Forgiveness program. On Feb. 5, 2018, 35 higher education groups, civil rights organizations, and unions sent a letter to House leaders asserting that the PROSPER Act “exacerbates the increasing burden of student debt and continued inequality in higher education access and outcomes. It would make higher education less affordable, saddle students with greater debt, and push more students into loan default.”

A copy of the Feb. 5, 2018 letter is found at: https://edtrust.org/press_release/letter-35-higher-education-organizations-regarding-prosper-act/

On Feb. 15, 2018, a letter, led by the American Council of Higher Education (ACE) and 39 other higher education associations, was sent to Speaker of the House Paul Ryan (R-WI) and Minority Leader Nancy Pelosi (D-CA), outlining some areas of concern about the PROSPER Act. While the associations recognized a few areas that were worthwhile for students and institutions, such as the Pell Grant bonus program and the elimination of the origination fees on student loans, the group stated that the overall package was “problematic for students and families.” The letter concluded by requesting that the bill not go to the floor in its present form.

A copy of the Feb. 15, 2018 letter is found at: https://www.nasfaa.org/uploads/documents/20180215_Letter_to-House-PROSPER-Act.pdf

The differences between the Democrats and Republicans on the Senate side became evident in the recent Senate hearings on affordability and accountability. Despite a verbal agreement to introduce a bipartisan reauthorization bill in the spring 2018, it is not likely to happen. Democrats call for more federal dollars for student aid and the Republicans question the merit of making greater federal investments in student aid. Senator Lamar Alexander (R-TN), Chairman of the Health, Education, Labor and Pensions Committee, discussed the “Bennett hypothesis,” which is the idea that increasing federal student aid leads to rising college costs. While many disagree with Senator Alexander, he said that Congress should at least consider its effect. With regard to accountability, Senator Alexander believes that different standards should be used other than the cohort default rate, the 90/10 rule, and the gainful employment rule to hold schools accountable, while Democrats, led by Ranking Member Patty Murray (D-WA), believe the current standards should be strengthened. Several experts have argued that the disagreements on affordability and accountability signal that there is a long way to go before the Senate introduces its reauthorization bill.

On the other hand, while differences exist on the Senate side, on Feb. 13, 2018, Chairman Alexander and Ranking Member Murray released a joint announcement seeking comments or suggestions by Feb. 23, 2018 for the Committee’s consideration as they work on the reauthorization of the HEA. Comments should be sent to: HigherEducation2018@help.senate.gov. In addition, on Feb. 15, 2018, Ranking Member Murray asked current, former, and future students and their families to share their personal stories about what they think Congress should tackle when it comes to higher education. Senator Murray said: “Our top priority in reauthorizing the Higher Education Act should not be the colleges, loan companies, or interest groups – it should be our students.” The deadline was set for Feb. 23, 2018, and stories and remarks should be sent to: HigherEdStories2018@help.senate.gov

Maybe the differences can be worked out by spring?

Democratic Senators and Attorneys General express concern about ACICS’ request for reinstatement

In response to the Department of Education’s request for written comments on ACICS’ application for initial recognition, a number of groups have weighed in. Of special note was the Feb. 15, 2018 letter from Senators Elizabeth Warren (D-MA), Patty Murray (D-WA), Dick Durbin (D-IL), Sherrod Brown (D-OH), and Richard Blumenthal (D-CT) asking that the National Advisory Committee on Institutional Quality and Integrity (NACIQI) reject ACICS’ request for initial recognition. A letter of Feb. 16, 2018 from a coalition of 20 Democratic Attorneys General (AG) requested that ACICS’ application for reconsideration be blocked. The Career Education Colleges and Universities (CECU) sent a letter on Feb. 16, 2018 to the Department urging it to undertake a “fair, transparent, and non-ideological evaluation of ACICS’ application.”

A copy of the Senators’ letter is found at: http://c.ymcdn.com/sites/www.ncher.us/resource/resmgr/daily_briefing/ACICS_letter.pdf

A copy of the AGs’ letter is found at: https://www.mass.gov/files/documents/2018/02/16/AG%20Multistate%20Letter%20to%20USDOEd%20Opposing%20ACICS%20Recognition.pdf

A copy of CECU’s letter is found at: http://c.ymcdn.com/sites/www.ncher.us/resource/resmgr/daily_briefing/CECU_letter.pdf

Court prevents Department of Education from enforcing the deadline for third parties to comment on ACICS’ initial recognition application

On Feb. 16, 2018, U.S. District Judge Paul Crotty ordered the U.S. Department of Education to extend the public comment period regarding whether the Department should reinstate the recognition for the Accrediting Council for Independent Colleges and Schools (ACICS). Feb. 16, 2018 was the deadline for public comments but the Temporary Restraining Order (TRO) issued by Judge Crotty requires the Department to extend the date until March 1, 2018, or until a hearing on a motion for preliminary injunction is held. The ruling was the result of a lawsuit filed by The Century Foundation, a liberal leaning group that has been critical of for-profit schools, which sought to force the Department to turn over ACICS’ application for initial recognition. The Century Foundation argued that it could not comment unless it was permitted to review the ACICS application.

A copy of the decision is found at: https://s3-us-west-2.amazonaws.com/production.tcf.org/app/uploads/2018/02/16104012/TRO-Decision.pdf

Pursuant to the recent court order, a Notice appeared in the Feb. 22, 2018 Federal Register extending the public comment period until March 1, 2018. The Notice is found at: https://www.gpo.gov/fdsys/pkg/FR-2018-02-22/pdf/2018-03686.pdf. The Department has also begun releasing records related to the ACICS application during the last week in February.

Department seeks comments on student loan bankruptcy standards

On Feb. 21, 2018, the Department of Education published a Notice in the Federal Register requesting comments on factors to be considered in evaluating undue hardship claims asserted by student loan borrowers in bankruptcy proceedings. In 2005, the U.S. Bankruptcy Code was amended and barred most student loan borrowers from discharging their student loans in bankruptcy unless they could demonstrate “undue hardship” if forced to pay their student loans.

According to the Notice, Congress has never defined “undue hardship” in the Bankruptcy Code and has not delegated to the Department the authority to do so. Federal courts have established the legal standard for a student loan debtor to prove “undue hardship.” Current guidance is found in Dear Colleague letter GEN-15-13 and was reported to be very difficult to reach. The publication of the Notice suggests that the Department may be willing to broaden the definition of “undue hardship.” Comments are due May 22, 2018.

A copy of the Notice is found at: https://www.gpo.gov/fdsys/pkg/FR-2018-02-21/pdf/2018-03537.pdf

Net Price Calculator template for 2016-2017 data is now available

Each institution that participates in the Title IV federal student aid programs is required to post its Net Price Calculator on its website. The Net Price Calculator is required for all Title IV institutions that enroll full-time, first time degree- or certificate-seeking undergraduate students. The Net Price Calculator uses institutional data to provide estimated net price information to current and prospective students and their families based on a student’s individual circumstances. While there is no specific deadline for updating the Net Price Calculator, institutions are required to update their Net Price Calculator on an annual basis.

The template is available at: https://nces.ed.gov/ipeds/netpricecalculator/

NCES releases study on student financial aid estimates

In January 2018, the National Center for Education Statistics (NCES) released the “2015-16 National Postsecondary Student Aid Study, Student Financial Aid Estimates for 2015-2016, First Look.” “First Look” represents selected findings about student financial aid during the 2015-16 academic year based on data from the 2015-16 National Postsecondary Student Aid Study, a nationally representative sample survey of undergraduate and graduate students enrolled any time between July 1, 2015, and June 30, 2016, in institutions eligible to participate in federal financial aid programs. Some of the findings are:

• Seventy-two percent of all undergraduates received some type of financial aid.
• Among the undergraduates who received any aid, the average total amount received was $12,300.
• Fifty-five percent of all undergraduates received federal student aid, 22 percent received state aid, and 25 percent received aid funded by the institution.
• Seventy-two percent of graduate students received some type of financial aid.
• The average total aid received by graduate students was $22,000.

A copy of the NCES study is available at: https://nces.ed.gov/pubs2018/2018466.pdf

SHARON H. BOB PH.D., Higher Education Specialist on Policy and Regulation, is a member of the Education Group at the Washington, DC law firm of Powers Pyles Sutter & Verville, PC. Dr. Bob advises all sectors of higher education regarding strategic issues pertaining to their participation in the federal student financial assistance programs, accreditation, licensure, education tax benefits, and related regulatory matters.