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

Center for American Progress releases report on “How Accreditors Miss the Mark on Student Outcomes”

On April 25, 2018, the Center for American Progress (CAP) released a report titled, “How College Accreditors Miss the Mark on Student Outcomes,” which analyzed the policies and practices of 11 institutional accrediting agencies. The report found that many accreditors collect information on graduation rates and other student metrics, but concluded that accreditors need to do more to define what constitutes adequate performance by colleges. The report said: “The lack of true accountability means accreditors avoid engaging with the poorest outcomes and fail to help institutions improve how well they serve students in a tangible way.”

The CAP report referenced a report released in Feb. 6, 2018, by the Council of Regional Accrediting Commissions (C-RAC), which showed how the regional accrediting agencies are using data in new ways, including benchmarking performance, across institutions. CAP agreed that most accreditors collect numerous outcome measures, but “their standards lack clarity on how a school’s observed performance connects to consequences. With no definition of what performance means in terms of college’s quality, even the lowest performers pass the bar.”

The report indicated that CAP conducted a detailed investigation of accreditor policies and practices at 11 main regional and national agencies, reviewing standards, guidance, and annual reports. CAP also looked at how standards and guidance are used in practice. CAP found that regional accreditors vary in terms of what student outcomes they emphasize, but none have a clear definition for what constitutes poor performance. On the other hand, national accreditors have minimum performance standards for outcomes such as completion, job placement, and licensure pass rates, which are typically assessed annually. However, some national accreditors can be lenient when an institution fails to meet minimum standards.

The CAP report recommended that accrediting agencies should:

  • Collect common student outcome data;
  • Include equity in data collection;
  • Connect data to explicit standards through clear performance benchmarks;
  • Establish a defined process for holding colleges accountable when performance on student outcomes do not meet minimum standards; and
  • Support the creation of a federal student-level data system.

A copy of the CAP report is found at: https://www.americanprogress.org/issues/education-postsecondary/reports/2018/04/25/449937/college-accreditors-miss-mark-student-outcomes/

A copy of the C-RAC report is found at: https://www.c-rac.org/single-post/2018/02/06/C-RAC-Releases-One-Year-Review-of-Institutions-with-Low-Graduation-Rates

Senate Democrats express concern about Diane Auer Jones, ED’s senior advisor

On April 26, 2018, 10 Democratic Senators sent a letter to Secretary of Education Betsy DeVos expressing their concerns about the recent appointment of Diane Auer Jones to be senior policy advisor to the Assistant Secretary for Postsecondary Education. The Senators indicated that they were concerned because of Ms. Jones’ career as a lobbyist and consultant for for-profit colleges. They are particularly concerned because Ms. Jones will be serving as the Senior Department Official in charge of making recommendations on the status of the Accrediting Council for Independent Colleges and Schools (ACICS). In addition, Ms. Jones “may be advising you on a variety of regulatory and administrative matters that directly and indirectly impact her former employers and the for-profit college industry.”

A copy of the Senators’ letter is found at: https://www.blumenthal.senate.gov/imo/media/doc/04.26.2018%20-%20DeVos%20-%20Jones%20Conflicts%20of%20Interest.pdf

GAO report recommends improved oversight of schools’ default rates

On April 26, 2018, the Government Accountability Office (GAO) released a report titled, “Federal Student Loans: Actions Needed to Improve Oversight of Schools’ Default Rates,” which was requested by Congressman Mark Takano (D-CA) and Congresswoman Rosa DeLauro (D-CT). The report states that some schools and the consultants they hire to provide default management services may use strategies to prevent borrowers from defaulting during the Cohort Default Rate (CDR) period that may not be in the borrowers’ best interests. For instance, many borrowers are encouraged to put their loans into forbearance when other options, like income-based repayment plans, may be more beneficial. The GAO report states that the strategy helps schools avoid having a high default rate, but the practice drives up the amount of the debt to borrowers who continue to accrue interest on their loans.

The GAO recommends that Congress consider strengthening schools’ accountability for student loan defaults by revising the CDR calculation to account for borrowers spending long periods in forbearance during the three-year CDR period and by specifying additional or alternative accountability measures, such as a loan repayment rate. The GAO also recommends that Congress should consider “requiring that the information schools and consultants provide to borrowers about loan repayment and postponement options be accurate and complete.”

Congressman Takano said in a press release: “The GAO’s report revealed an astonishing lack of accountability and transparency in the default management industry that results in borrowers owing thousands of dollars in additional debt and facing a greater risk of default.”

A copy of the GAO Report is found at: https://www.gao.gov/assets/700/691520.pdf

A copy of the press release is found at: https://takano.house.gov/newsroom/press-releases/gao-report-shadowy-industry-is-manipulating-student-loan-borrowers-default-rates

Department announces distribution of Draft GE Completers Lists and 45-day corrections period

On April 27, 2018, the Department of Education released Electronic Announcement #114, which announced that the Draft Gainful Employment (GE) Completers Lists would be distributed on April 30, 2018, for the 2016 Debt Measure Year. Institutions may submit corrections to the Draft GE Completers Lists between April 30, 2018, and June 13, 2018. In addition to corrections, the GE Completers List corrections process also allows the institution to request the exclusion or inclusion of a student.

A copy of Electronic Announcement #114 can be found at: https://ifap.ed.gov/eannouncements/042718GEAnn114DistribDraftGEComplList45DayCorrectPer.html

Man uses FAFSA portal to attempt to retrieve Trump’s tax returns

On April 27, 2018, The Washington Times reported that Jordan Hamlett from Louisiana was sentenced on April 25, 2018, to 18 months in prison, two years of supervised release, and was ordered to pay $14,750 in restitution to the Department of Education to cover the cost of its response to his attempts to illegally obtain President Trump’s tax returns. Mr. Hamlett used Mr. Trump’s Social Security number, date of birth, and other information to complete the online Free Application for Federal Student Aid (FAFSA) in September 2016. After Mr. Hamlett received a Federal Student Aid Identification, he used the ID to try to obtain Mr. Trump’s tax information using the IRS Data Retrieval Tool, which is used to download tax information onto the FAFSA from the tax return. Mr. Hamlett was unsuccessful after making six attempts.

Civil rights and education groups release a list of guiding principles for reauthorization of the HEA

On April 28, 2018, almost 50 civil rights and education groups released a list of “Civil Rights Principles for the Reauthorization of the Higher Education Act,” which urges Congress to allow more students access to higher education and leave with degrees that would mean “economic, social, and political opportunity in the United States.” The principles are designed “to strengthen and build a higher education system that provides equitable access to and success in a high-quality postsecondary education for all students.” One way to achieve these principles is to “exclude for-profit colleges, including covert for-profit colleges masquerading as non-profit, from federal financial aid programs unless they have demonstrated their value to students through increased student earnings and they rely, at least partially, on non-federal sources of funding.”

Other principles include:

  • Removing barriers to enrollment and promoting meaningful access for historically marginalized students;
  • Increasing student persistence in and completion of a quality, racially equitable postsecondary education;
  • Making college affordable for low-income students;
  • Providing for the collection and reporting of higher education data that is disaggregated, cross-tabulated, and broadly available;
  • Designing accountability systems to ensure students receive value from their higher education;
  • Protecting student loan borrowers from abusive and fraudulent practices and exploitation in the federal and private student loan servicing and debt collection markets;
  • Ensuring safe and inclusive campus climates; and
  • Investing in and supporting institutions that serve high populations of traditionally underrepresented students.

A copy of the Civil Rights Principles is found at: http://civilrightsdocs.info/pdf/education/HEA-Civil-Rights-Principles.pdf

Senate Democrats urge department to help students harmed by ITT Tech

On April 30, 2018, 13 Democratic Senators, led by Senator Joe Donnelly (D-IN), sent a letter to Secretary of Education Betsy DeVos urging her to assist students harmed by the 2016 closure of ITT Tech. The Senators said that more than a year after ITT Tech’s closure, “significant numbers of former students and their families remain stuck in financial limbo and with credits and degrees of little labor market value.” According to the letter, these individuals continue to wait for the Department’s decision on whether it will provide them with debt relief.

A copy of Senator Donnelly’s press release that includes the full text of the letter is found at: https://www.donnelly.senate.gov/newsroom/press/donnelly-12-senators-call-for-department-of-education-to-assist-students-harmed-by-closure-of-itt-tech

NACUBO study finds that tuition discounts put financial strain on schools but do not increase enrollment

On April 30, 2018, the National Association of Colleges and University Business Officers (NACUBO) released the “2017 Tuition Discounting Study,” which reflects the final discount rates for academic year 2016-2017. The study found that private, nonprofit institutions offered discounted tuition for the 2016-2017 academic year at higher rates than in the previous year and spent almost half of what they collected in revenues and fees from undergraduates to offer tuition discounts. The NACUBO study found that while tuition discounts help to soften the sticker price of attending private, nonprofit institutions, tuition discounts put these institutions in a financial bind and have not been shown to increase enrollment rates. The authors concluded that “increasing tuition rates, strained growth in net tuition revenue and weak enrollment trends-warrant questions about whether tuition discounting practices are sustainable.”

The study is available for a fee at NACUBO.

Senate confirms Mick Zais as Deputy Secretary of the Department of Education

On May 1, 2018, by a vote of 50-48, the Senate confirmed the nomination of Mick Zais to serve as the next Deputy Secretary of the Department of Education. Mr. Zais was nominated by President Trump in October 2017. Secretary of Education Betsy DeVos said in a press release: “We are thrilled to finally have Mick on our team.” Dr. Zais has extensive experience in working in education and government. From January 2011 to January 2015, he served as South Carolina’s State Superintendent of Education. Before that he served as President of Newberry College in South Carolina. He also served as a Commissioner on South Carolina’s Commission on Higher Education for six years. He retired as a Brigadier General after 31 years of Army service.

A copy of the Secretary’s statement is found at: https://www.ed.gov/news/press-releases/us-secretary-education-betsy-devos-welcomes-dr-mick-zais-deputy-secretary

State banking and financial regulators want preemption provisions dropped from PROSPER Act

On May 3, 2018, the Conference of State Bank Supervisors (CSBS) sent a letter to Chairman of the House Education and the Workforce Committee Virginia Foxx (R-NC) urging her to drop provisions in H.R. 4508, the PROSPER Act, that would preempt states from regulating federal student loan servicers. CSBS, representing banking and financial regulators from all 50 states, said: “The preemption provisions upset the historical federal-state balance in financial regulation, wrongfully interfere with traditional state enforcement authority, and frustrate the ability of state regulators to protect student borrowers who rely on federal student loan programs.”

A copy of the CSBS letter is found at: https://www.csbs.org/states-oppose-legislation-preempt-state-authority-protect-consumers-student-loans

Senate Democrats urge CFPB to provide private loan forgiveness for former Corinthian College students

On May 7, 2018, six Senate Democrats sent a letter to Ms. Kristen Donoghue, Enforcement Director for the Consumer Financial Protection Bureau (CFPB), to determine whether the victims of the collapse of the Corinthian Colleges, Inc. have received their relief under the settlement with the Securities and Exchange Commission (SEC). The settlement called for $183.3 million in private loan forgiveness for 41,000 students who attended the now defunct Corinthian Colleges. The settlement was reached on Aug. 17, 2017, between the CFPB and Aequitas Capital Management, a private equity company that was accused of operating a predatory lending scheme in connection with Corinthian Colleges. The Senators expressed concern that “former Corinthian students may not have received the relief they are entitled to under the settlement and that many may have incurred tax liability for cancelled loans.” To determine the progress that has been made under the settlement, the Senate Democrats sought answers to specific questions by May 21, 2018.

A copy of the Senators’ letter is found at: https://www.help.senate.gov/imo/media/doc/050718%20Aequitas-Corinthian%20CFPB.PDF

Michigan Democratic Senators urge Secretary DeVos to deny ACICS’s petition for recognition

On May 8, 2018, Democratic Michigan Senators Debbie Stabenow and Gary Peters sent a letter to Secretary of Education Betsy DeVos urging her to deny ACICS’s petition for recognition. The Senators said that they were troubled by recently received emails under the Freedom of Information Act that suggest that the Department is giving ACICS preferential treatment with its renewal application. The letter said: “We urge you to side with Michigan students and taxpayers by denying ACICS’s petition to be a federally recognized accreditor. You have a responsibility to uphold the integrity of our country’s higher education system.”

A copy of the Senators’ letter is found at: https://www.stabenow.senate.gov/news/stabenow-peters-raise-alarm-over-secretary-devos-actions-to-restore-federal-recognition-of-failed-for-profit-accrediting-organization

OMB releases its semi-annual Unified Agenda of Regulatory and Deregulatory Actions for Spring 2018

On May 10, 2018, the Office of Management and Budget (OMB) released its semi-annual Unified Agenda of Regulatory and Deregulatory Actions for Spring 2018. Since 1978, Federal agencies have been required to publish agendas of regulatory and deregulatory activities. Under Executive Order 12866, Federal agencies are required to publish every six months a regulatory agenda, including all regulations that the agencies intend to develop or review during the 12 months following publication, so that the public has a sense of federal priorities and details about the most important significant regulatory actions that agencies expect to take in the coming year.

According to the Spring 2018 Agenda, the Department of Education’s Office of Postsecondary Education has nine regulatory priorities that may be of interest:

  • State Authorization – delayed effective date: The Department plans to issue a new regulation to delay the effective date by two years of the regulations pertaining to state authorization of distance education and correspondence education providers, published on Dec. 19, 2016. The Department plans to issue the rule in May 2018 and a final rule in June 2018. [The proposed rule delaying the effective date of the state authorization rule until July 1, 2020, was published in the Federal Register on May 25, 2018.]
  • State Authorization and related issues: The Department plans to amend, through negotiated rulemaking, regulations relating to the legal authorization of institutions by States. The Department is also proposing to amend regulations pertaining to distance education providers and correspondence education providers as a component of institutional eligibility for participation in Title IV programs. The Department plans on publishing a notice of intent to establish a negotiated rulemaking committee in June 2018.
  • Borrower Defense to Repayment – delayed effective date: The Department plans to publish a regulation to delay the effective day by one year of the borrower defense to repayment rule issued on Nov. 1, 2016. The Department issued a proposed rule on Oct. 24, 2017 with the public comment period ending on Nov. 24, 2017. Final action is anticipated in May 2018. [NOTE: On Feb. 14, 2018, the Department of Education published a notice delaying the implementation of the borrower defense to repayment rule until July 1, 2019.]
  • Borrower Defense to Repayment and related issues: The Department plans to establish a new regulation governing the Direct Loan program regarding the standard and the process for determining whether a borrower has a defense to repayment on a loan based on an act or omission of a school. ED may also amend other sections of the Direct Loan program regulations, including codifying current policy regarding the impact that discharges have on the 150 percent Direct Subsidized Loan Limit and the regulations providing financial responsibility standards and disclosure requirements for schools. The Department plans to issue a proposed rule in May 2018.
  • Gainful Employment: The Department plans to amend regulations on institutional eligibility and the Student Assistance General Provisions, including the regulations governing whether certain programs prepare students for gainful employment in a recognized occupation and the conditions under which these programs remain eligible. The Department plans on issuing a proposed regulation in June 2018.
  • Accreditation and related issues: The Department plans to amend, through negotiated rulemaking, regulations relating to the Secretary’s recognition of accrediting agencies and accreditation procedures as a component of institutional eligibility for participation in the Title IV programs. The Department plans to publish a notice of intent to establish a negotiated rulemaking committee in June 2018.
  • Ensuring student access to high quality and innovative postsecondary educational programs: The Department plans to create and amend, through negotiated rulemaking, regulations related to institutional eligibility and operations for participation in Title IV programs, including those related to credit hour, competency-based education, direct assessment programs, and regular and substantive interaction between faculty and students in the delivery of distance education programs to promote greater access for students to high-quality, innovative programs of postsecondary education. The Department plans to publish a notice of intent to establish a negotiated rulemaking committee in June 2018.

A copy of the Department of Education’s regulatory agenda is found at: https://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_GET_AGENCY_RULE_LIST&currentPub=true&agencyCode=&showStage=active&agencyCd=1800

Department of Labor releases report on apprenticeship expansion

On May 10, 2018, the Department of Labor released its “Final Report to the President of the United States on the Task Force on Apprenticeship Expansion.” On June 15, 2017, President Trump signed Executive Order 13801, Expanding Apprenticeships in America, calling for the Secretary of Labor to work with Secretary of Education Betsy DeVos and Secretary of Commerce Wilbur Ross to establish a task force to identify strategies and recommendations for expanding apprenticeship opportunities. Secretary DeVos wrote in the preamble to the Report that the document lays out a “roadmap for advancing apprenticeships, including through the development of a new and more flexible apprenticeship model, the Industry-Recognized Apprenticeship.”

Some of the recommendations include the following:

  •  The Subcommittee on Education and Credentialing recommended that Industry-Recognized Apprenticeship programs expand more traditional work-and-learn models to incorporate the criteria of modern apprenticeship and to ensure better outcomes for workers and employers;
  • The Subcommittee on Attracting Business Apprenticeship recommended that the Industry-Recognized Apprenticeship program should streamline and simplify program funding through various methods, such as updating Federal funding criteria and streamlining State grant access;
  • The Subcommittee on Expanding Access, Equity, and Career Awareness recommended that the Federal Government should fund a brand awareness campaign for apprenticeships; and
  • The Subcommittee on Administrative and Regulatory Strategies to Expand Apprenticeship recommended that implementation of an Industry-Recognized Apprenticeship program should begin with a pilot project in an industry without well-established Registered Apprenticeship programs.

A copy of the report is found at: https://www.dol.gov/apprenticeship/docs/task-force-apprenticeship-expansion-report.pdf

New York Times reports Student Aid Enforcement Unit is unwinding

A May 13, 2018, article in The New York Times reported that members of the Student Aid Enforcement Unit have been “marginalized, reassigned or instructed to focus on other matters.” The Student Aid Enforcement Unit had been created in 2016 under the Obama administration to include about a dozen lawyers and investigators who were looking into advertising, recruitment practices and job placement claims at for-profit institutions. Secretary of Education Betsy DeVos selected Julian Schmoke, a former Dean of Devry University, to serve as the head of the Student Aid Enforcement Unit. The article reported that there are now only three members that remain in the Student Aid Enforcement Unit, and they are focusing on processing student loan forgiveness applications.

A copy of the article is available at: https://www.nytimes.com/2018/05/13/business/education-department-for-profit-colleges.html

Secretary DeVos appears before House Education Committee

On May 22, 2018, the House Education and the Workforce Committee, chaired by Virginia Foxx (R-NC), held a hearing titled, “Policies and Priorities of the U.S. Department of Education.” Secretary of Education Betsy DeVos was the only person who testified at the hearing. The tense hearing focused on the policies and priorities under the Secretary’s leadership and covered an array of issues including school violence, elementary and secondary education, school vouchers, Pell Grants, Direct Loans, oversight of for-profit colleges, and the rollback and re-writing of several sets of regulations. In her opening remarks, Chairman Foxx applauded Secretary DeVos for her “willingness to take on this work in the face of the unprecedented vitriol you face.” Ranking Member Bobby Scott (D-VA) stated in his opening remarks that the Trump Administration had rescinded protections for transgender students and eliminated protections that “helped borrowers better manage their loans and suspended protections for student loan borrowers that enabled them to discharge when a school closes abruptly or defrauds its students.”

Secretary DeVos commended Chairwoman Foxx for her leadership on “moving to reauthorize and reform the outdated Higher Education Act through the PROSPER Act.” She also addressed reforms being undertaken at FSA to “modernize FSA’s approach, technology, and customer service to provide a world class experience and improve borrower outcomes.” Secretary DeVos also said that the federal government must put to rest the idea that a four-year degree is the only pathway to success, stating that the PROSPER Act would expand options for all students. She also stated that the Department has “developed an organization plan to more efficiently serve students and the taxpayer.”

During the question and answer portion of the hearing, Secretary DeVos said that students need many options to pursue great careers and high paying jobs. “Your proposal in the PROSPER Act to allow for high quality shorter term certification and credential programs I think is a very important step in the right direction. The Administration is pleased the bill aligns with many of its goals for HEA reauthorization.”

Chairman Foxx said that there were reports that the Department’s existing private college contractors are so overwhelmed with accounts, they cannot respond in real time to all borrowers who are reaching out for help with their loans. Secretary DeVos said that the Department is concerned about making sure students are well-serviced when they take on student loans. “We are confident that the current servicing agreements and arrangements have the capacity to take care of these students and as we continue to move into the reforms of Federal Student Aid, this pathway will allow us that kind of focus on doing what’s right and what’s best for students. We have every confidence that we can continue to service them well and will be able to do so even better in the future.”

Congresswoman Susan Davis (D-CA) asked the Secretary about fraud in the proprietary sector, and the Secretary responded that fraud “is not to be tolerated and I think we have to be very clear about that. We need to ensure that students who have been defrauded, that is taken into consideration in regards to their student debt and dealt with appropriately.”

Congresswoman Suzanne Bonamici (D-OR) asked the Secretary about the “predatory role of student loan servicers, noting that the Department’s notice of interpretation would preempt state student loan servicing licensing laws.” Secretary DeVos responded that “If we have 50 different states and 50 different approaches to oversight it would be a very confusing and convoluted process. As long as federal student aid is a federal program, we believe the federal level has the appropriate oversight responsibility.”

Chairman Virginia Foxx’s opening statement is found at: https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=402771

Secretary of Education Betsy DeVos’s opening remarks are found at: https://www.ed.gov/news/speeches/prepared-remarks-us-secretary-education-betsy-devos-house-education-and-workforce-committee

Democratic Senators send letter to Secretary DeVos regarding the scaling back of the enforcement of federal laws designed to protect financial aid programs

On May 23, 2018, Senator Patty Murray (D-WA) and 28 other Senate Democrats wrote to Secretary of Education Betsy DeVos expressing their concern that the Department “may be scaling back the enforcement of federal laws that are designed to protect against fraud and abuse in taxpayer-funded financial aid programs.” The Senators said that based on a May 13, 2018, article in The New York Times, it appears that the Department’s Student Aid Enforcement Unit has effectively ended investigations into a number of for-profit college chains. They noted that the article said that there are only three individuals dedicated to the office responsible for conducting investigations. “Halting or abandoning reviews of potentially predatory institutions and providing insufficient staffing to the Investigations Group eliminates the deterrent effect of appropriate and badly-needed oversight in higher education.”

The letter also stated that “the Department has hired a number of former college executives to senior positions, some of whom worked for the companies that had been under investigation. And the Department has rolled back rules that were designed to protect students, borrowers, and taxpayers despite recommendations from the Department’s independent watchdog to maintain student protections.”

The 29 Senators urged the Secretary to reverse course “by adequately staffing the Investigations Group and taking steps to identify colleges that evidence suggests have made misrepresentations to students, falsified job placement data, and improperly enriched corporate owners and executives with taxpayer dollars.”

A copy of the Senators’ letter is found at: http://cecu.informz.net/cecu/data/images/GR%20Uploads/Senate%20Dems%20ED%20FSA%20Enforcement%20Response.pdf

NACIQI members are advised of ED’s plans for regulatory reform of accreditation and establishes subcommittee to examine issues related to for-profit to nonprofit conversions

On May 23-25, 2018, the National Advisory Committee on Institutional Quality and Integrity (NACIQI) held its biannual meeting to review the applications for recognition of specific accrediting agencies or associations. In addition, on May 23, 2018, the NACIQI members heard an update from Diane Auer Jones, a senior advisor to the Department of Education, about the Department’s plans to renegotiate the regulations related to the recognition of accreditors. Ms. Jones asked the NACIQI members to focus on the specifics of what accreditors must do to receive approval. She also called for the restoration of the separation of duties among the triad to eliminate duplicate oversight responsibilities and to ensure that the appropriate entity is held accountable when an institution is not in compliance. She asserted: “Secretary DeVos has challenged all of us to rethink education. We must challenge our current assumptions, we must evaluate our current practices, and we must question everything to be sure we do not limit the ability of any student to reach his or her full potential. In that spirit, we are examining the accreditation process.”

On May 25, 2018, NACIQI heard several hours of input from various organizations that were generally critical of for-profit institutions, particularly those for-profit institutions that sought non-profit status as a way to avoid scrutiny and regulation without really changing their governance structures. When the presentations drew to a close, John Etchemendy, a NACIQI member who was formerly a provost from Stanford University, recommended that NACIQI address the situation since no one else was attempting to fix it. The NACIQI members agreed to establish a subcommittee to offer recommendations on the for-profit to non-profit conversion process.

Department announces reconsideration of Public Service Loan Forgiveness Program

On May 23, 2018, the Department of Education announced a plan to reconsider some borrowers for student loan forgiveness under a limited-one-time-only expansion of the Public Service Loan Forgiveness (PSLF) Program. The Temporary Expanded PSLF (TEPSLF) was made possible by a $350 million appropriation included in the Consolidated Appropriations Act, 2018 (P.L. 115-141). The law provides additional conditions under which borrowers may become eligible for loan forgiveness if some or all of their payments made on the Direct Loan Program were made on a non-qualifying repayment plan for the PSLF Program, such as the Graduated Repayment Plan or the Extended Repayment Plan. The TEPSLF will be available on a first-come, first served basis until the $350 million has been allocated.

A copy of the press release is available at: https://www.ed.gov/news/press-releases/us-department-education-announces-opportunity-federal-student-loan-borrowers-be-reconsidered-public-service-loan-forgiveness

A copy of the Electronic Announcement is found at: https://ifap.ed.gov/eannouncements/052318TemporyExpandedPublicServiceLoanForgivenessOpporAvail.html

Democratic Senators send letter to Secretary DeVos regarding the reinstatement of ACICS

On May 24, 2018, six Senate Democrats wrote to Secretary of Education Betsy DeVos asking her to explain why she reinstated the accrediting authority of the Accrediting Council for Independent Colleges and Schools (ACICS), which was terminated under the Obama administration. The Senators expressed concern that ED’s decision to restore ACICS’s status as a federally-recognized accreditor while it conducts a further review of its decision will put students and taxpayers in harm’s way. They noted that while the court remanded the ACICS determination to the Department because it had not properly considered pertinent evidence before terminating ACICS, the court had not made any suggestion that ACICS should be reinstated as a federally-recognized accreditor. The Senators pointed out that by restoring ACICS’s status, the Department appears to be using the court ruling as a “pretext to ignore the significant and damning record” of evidence against ACICS. The Senators requested that the Secretary explain how she plans to proceed on the issue.

A copy of the Senators’ letter is found at: https://www.warren.senate.gov/oversight/letters/senators-press-devos-for-answers-following-decision-to-restore-recognition-of-for-profit-accreditor-acics

Federal Judge blocks the Department of Education from using a tiered relief system for borrower defense claims

On May 25, 2018, U.S. Magistrate Judge Sallie Kim of the Northern District of California blocked the Department of Education from using a tiered relief system to award partial debt relief to some borrowers who attended the now-closed Corinthian Colleges, claiming that the method by which data was collected to determine the amount of relief violated the Privacy Act. Judge Kim ruled that the tiered relief system for those student fraud claims violates the Privacy Act that was meant to protect how government agencies collect and use individuals’ personal information. On Dec. 20, 2017, the Department began to institute a new tiered relief system for borrower defense to repayment claims. Under the new system, students receive full relief as a result of their claims if their earnings are currently less than 50 percent of their counterparts’ earnings from passing GE programs. Students earning at least 50 percent of what their peers earn from passing GE programs are compensated proportionately for the difference.

The court ruled that the Department violated the Privacy Act by improperly using borrowers’ federal earnings data from the Social Security Administration to calculate the amount of loan forgiveness for each student. While Judge Kim issued a preliminary injunction blocking the Department from using the current tiered relief system, the ruling stated that the Department could use a different process to provide partial loan forgiveness. Judge Kim wrote that the Secretary had the authority to determine the amount of relief a borrower could obtain. Judge Kim set a hearing for June 4, 2018, to determine if the Department should provide full loan forgiveness to the former Corinthian students.

A copy of the decision is found at:
https://predatorystudentlending.org/wp-content/uploads/2018/05/show_temp.pl-2.pdf

Department proposes to further delay the state authorization rules

On May 25, 2018, the Department of Education published an announcement in the Federal Register that proposes a two-year delay, until July 1, 2020, of the effective date of the final state authorization of distance education regulations published on Dec. 19, 2016. The final rule is scheduled to go into effect on July 1, 2018. According to the Notice, the regulatory delay was prompted by the receipt of letters from the American Council on Education, the Western Interstate Commission for Higher Education, the Cooperative for Educational Technologies, the National Council for State Authorization Reciprocity, and the Distance Education Accrediting Commission. The organizations stated that they needed information as to how to comply with the regulations, including how the term “residence” as described in the preamble of the 2016 regulations may conflict with state laws and how to disclose to students the appropriate state complaint process when a number of states, including California, do not currently have complaint processes. The organizations also pointed out that there is widespread confusion with respect to the public and individualized disclosures of State licensure eligibility for every discipline that requires a license to enter a profession.

The Department said that because of the “complexity of these issues, we are not confident that we could develop a workable solution through guidance and without the input of negotiators who have been engaged in meeting these requirements.” The Notice said that since guidance is nonbinding, negotiated rulemaking is the most appropriate vehicle to provide substantive clarification necessary to stakeholders. The Department also pointed out that DCL GEN-12-13 provides guidance regarding student complaints and student consumer disclosures as related to distance education, which would ensure that during the delay, institutions will be aware of their existing obligations and that students will receive these protections.

Based on the complexities of the regulations, the Department is proposing to delay the rules until July 1, 2020, and seeking comments on or before June 11, 2018.

A copy of the Notice is found at: https://ifap.ed.gov/fregisters/attachments/FR052518.pdf

A copy of DCL GEN-12-13 is found at: https://ifap.ed.gov/dpcletters/GEN1213.html


Sharon Bob

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.



Contact Information: Sharon H. Bob, Ph.D. // Higher Education Specialist // Powers Pyles Sutter and Verville, PC // 1501 M Street, NW, Suite 700, Washington, DC 20005 // 202-872-6772 // Sharon.Bob@PowersLaw.com // http://www.powerslaw.com

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