Washington News Brief

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

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

On June 6, 2018, an article in The New York Times reported that Secretary of Education Betsy DeVos has temporarily halted relieving the debt of some student borrowers who had attended Corinthian Colleges in response to Judge Kim’s decision. The Department said that it would grant a temporary postponement of loan payments for Corinthian students in lieu of debt relief. In addition, the article reported that the Department would stop collection payments for four students who sued the Department over its new formula for determining how much debt they would have to repay.

A copy of the article is found at: https://www.nytimes.com/2018/06/06/us/politics/betsy-devos-student-debt-relief.html?rref=collection%2Fsectioncollection%2Fpolitics

NCES releases its annual report on postsecondary institutions

In May 2018, the National Center for Education Statistics (NCES) released its Annual Report titled, “Postsecondary Institutions and Cost of Attendance in 2017-18; Degrees and Other Awards Conferred, 2016-17; and 12-Month Enrollment 2016-17.” Some of the findings include the following:

• During the 2017-2018 academic year, there were 6,642 Title IV institutions in the United States. Of this total, 2,902 were 4-year institutions, 1,932 were 2-year institutions, and the remaining 1,808 were less-than-2-year institutions.
• Of the approximately 3.3 million students receiving degrees and certificates at 4-year Title IV degree-granting institutions, more than 58 percent received a bachelor’s degree, with about 64 percent of the 2.0 million students at public institutions receiving a bachelor’s degree, about 53 percent of the 1.1 million students at private, nonprofit institutions receiving a bachelor’s degree, and about 41 percent of the 277,000 students at private for-profit institutions receiving a bachelor’s degree.
• While the number of public and private nonprofit colleges remained largely the same compared to the year before, the number of for-profit colleges dropped to 2,791 in 2017-18 from 2,899 in 2016-17.

A copy of the NCES Annual Report is found at: https://nces.ed.gov/pubs2018/2018060.pdf

Senator Alexander blames Democrats for slowing progress on HEA reauthorization

A June 1, 2018, article in The Washington Post reported that on May 31, 2018, Senator Lamar Alexander (R-TN), Chairman of the Health, Education, Labor and Pensions (HELP) Committee, told a New York Times education conference of higher education leaders that the HELP Committee will not produce a bill to reauthorize the Higher Education Act this year. “The Democrats won’t do it. We had given to the Democrats four months ago – after four years of hearings, our complete proposal about what to do and haven’t gotten a response. They want to wait until next year to see if they’re in better shape politically.” The Washington Post reported that Mairead Lynn, a spokeswoman for Ranking Member Senator Patty Murray (D-WA), said that Senator Murray is “at the table and ready to keep working” and it is Senator Alexander who “has walked away from the table.” Ms. Lynn also said that Senator Murray “wants to address the cost of college, increase access to underrepresented students, hold schools accountable for student success and ensure that every student is safe and free from discrimination on campus.”

The stalemate in the Senate makes the reauthorization of the HEA dead until 2019. The article concluded that the impasse in the Senate signals the difficulties House Republicans will face in advancing their reauthorization bill. While Chairman Virginia Foxx (R-NC), Chairman of the House Education and the Workforce Committee, is working diligently to bring the Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act to the floor in mid-June, with Republicans holding a one-seat majority in the Senate, the PROSPER Act may be dead on arrival in the Senate. The PROSPER Act is unpopular with the Democrats in Congress, college leaders and many student groups.

ACICS withdraws request to intervene in FOIA lawsuit to block release of ACICS report; ED releases staff report

On June 5, 2018, the Accrediting Council for Independent Colleges and Schools (ACICS) withdrew its request to intervene in a Freedom of Information Act (FOIA) lawsuit to block the release of the staff report as to whether ACICS met federal standards established by the Department of Education. As a result, the Department of Education released the staff report on June 8, 2018, which stated that they found that ACICS failed to meet several federal standards impacting its ability to conduct proper oversight over the colleges and universities it accredits for federal financial aid. The March 2018 report demonstrates that the staff had serious concerns about restoring the federal recognition of ACICS.

Michelle Edwards, ACICS President, issued the following statement regarding the draft staff report:

“To characterize the Draft Staff Report as the final word on the Department’s recognition of ACICS or to argue that ACICS’s current recognition status is somehow invalid based on the information in that Draft Staff Report is to misunderstand the nature of the Department’s deliberative process and to mislead the public about its significance.”

New America issues report calling for standardization of financial aid award letters

On June 5, 2018, New America released a report titled, “Decoding the Cost of College: The Case for Transparent Financial Aid Award Letters,” which recommends that financial aid award letters be standardized to make them more transparent to students and families. Researchers examined 515 award letters and found them to be inconsistent and often did not offer sufficient amounts of financial aid to cover the cost of education. There were seven key findings:

• Confusing jargon and terminology;
• Omission of the complete cost of attendance;
• Failure to differentiate types of aid;
• Misleading packaging of Parent PLUS Loans;
• Vague definitions and poor placement of work-study;
• Inconsistent bottom line calculations; and
• No clear next steps (What to do to accept or decline awards).

The report recommended that federal policymakers should establish and require award letter standards.

A copy of the report is found at:
https://www.newamerica.org/education-policy/policy-papers/decoding-cost-college/

Senators introduce bill to ease reverse transferring

On June 14, 2018, Senators Orrin Hatch (R-UT), Mark Warner (D-VA), Johnny Isakson (R-GA), and Elizabeth Warren (D-MA) introduced a bipartisan bill to make it easier for students to get degrees they have already “earned” by “reverse” transferring college credits from four-year institutions to community colleges that students previously attended. The Reverse Transfer Efficiency Act would amend the Family Educational Rights and Privacy Act (FERPA) to create a new exemption for the sharing of student education records between higher education institutions. Currently, students must proactively give permission for their institutions to determine whether they have earned enough credits to be awarded a degree or certificate. A press release issued from Senator Hatch’s office states: “The bill would allow an institution to share a student’s academic records with another institution that the student previously attended under the condition that the credit information is sent with the goal of conferring a degree, and that the student provides written consent prior to receiving any degree for which he/she is eligible.”

Senator Hatch said: “I am happy to introduce legislation with Senator Warner to streamline the reverse transfer process. Eliminating this regulatory hurdle will enable millions of students to get credit for their college coursework and finally attain a degree or certificate.” Senator Warner said: “This bipartisan bill will make it easier for people to receive degrees that they’ve already paid for, worked towards, and earned.”

A copy of Senator Hatch’s press release is found at: https://www.hatch.senate.gov/public/index.cfm/releases?ID=418176DB-B36E-4DE6-84CD-EEE326CD8064

Rubio and Warren introduce legislation to prohibit states from pulling licenses of workers behind on their student loan payments

On June 14, 2018, Senators Marco Rubio (R-FL) and Elizabeth Warren (D-MA) introduced S. 3065, the Protecting Job Opportunities for Borrowers (Protecting JOBs) Act, which would prohibit states from suspending, revoking, or denying state-issued professional licenses or issuing penalties due to student loan default. Senator Rubio said in a press release: “Difficulty repaying a student loan should not threaten a graduate’s job. It makes no sense to revoke a professional license from someone who is trying to pay their student loans.” Senator Warren said: “State governments punishing people struggling with student loans by taking away drivers’ and professional licenses is wrong. These policies don’t make sense, because they make it harder for people to put food on the table and get out of debt. I’m glad to work with Senator Rubio to make sure borrowers can work to pay off crushing debt and build a future.”

A copy of Senator Rubio’s press release is found at: https://www.rubio.senate.gov/public/index.cfm/press-releases?id=9C6B8783-2AEF-4039-9F31-87659328FD13

A copy of Senator Warren’s press release is found at: https://www.warren.senate.gov/newsroom/press-releases/warren-rubio-introduce-bill-to-protect-jobs-for-workers-who-fall-behind-on-student-loan-payments

A summary of the bill is found at: https://www.rubio.senate.gov/public/index.cfm/press-releases?id=9C6B8783-2AEF-4039-9F31-87659328FD13

ED delays gainful employment disclosure requirements

On June 18, 2018, the Department of Education published a Notice in the Federal Register announcing it will allow additional time, until July 1, 2019, for institutions to comply with the requirements of the gainful employment (GE) regulations in 34 C.F.R. § 668.42(d) and (e). 34 C.F.R. § 668.412(d) and (e) requires institutions to:

(1) Include the GE disclosure template, or a link, in their GE program promotional material; and
(2) Directly distribute the disclosure template to prospective students.

The Department stated that it plans to develop proposed regulations that would replace the GE rules. Institutions are reminded that they must comply with the requirement to post disclosures on their GE program web pages using the approved disclosure template provided by the Department. The deadline was April 6, 2018.

A copy of the Notice is found at: https://ifap.ed.gov/fregisters/attachments/FR061818.pdf

A copy of the Electronic Announcement is found at: https://ifap.ed.gov/eannouncements/061818GEEA116ApplicableCompliDates.html

Democratic Senators accuse ED of failing to properly implement Temporary Expanded Public Service Forgiveness Program (TEPSLF)

On June 19, 2018, Senators Tim Kaine (D-VA), Sheldon Whitehouse (D-RI), Tammy Duckworth (D-IL), and Maggie Hassan (D-NH) sent a letter to Secretary of Education Betsy DeVos, accusing her of failing to properly implement the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program. The letter urged the Secretary to create a simple and fair process for social workers, police officers, and other public servants seeking federal student loan forgiveness through the TEPSLF in accordance with the one-time expansion of the Public Service Loan Forgiveness (PSLF) program included in the Consolidated Appropriations Act of FY 2018. The one-time effort was designed to assist those borrowers who had pursued careers in public service and who met the 120 qualifying monthly payment requirement, but were enrolled in an incorrect repayment plan. While the Department has implemented the TEPSLF program in a timely manner, the Senators are concerned about the unnecessary hurdles that have been put in place for borrowers making the current process “anything but simple.” The Senators also stated that they believe the Department is providing misleading information on its website and through email communications to applicants that has left many unsure about their eligibility for loan forgiveness.

A copy of the Senators’ letter is found at: https://www.kaine.senate.gov/imo/media/doc/Kaine%2C%20Whitehouse%2C%20Duckworth%2C%20Hassan%20Press%20DeVos%20On%20Failure%20To%20Implement%20Public%20Service%20Loan%20Forgiveness%20Fix.pdf

FSA releases new student aid data

On June 20, 2018, Federal Student Aid (FSA) released three new reports that segment federal student loan borrowers by two demographic levels, including age and location; age and debt size; and debt size and location. The new reports are posted on the FSA Data Center along with a series of updates to the quarterly application, disbursement, and portfolio reports to include data through March 31, 2018.

A copy of the Electronic Announcement is found at: https://ifap.ed.gov/eannouncements/062018FSAPostsNewRprtstoFSADataCenter.html

Trump Administration proposes merging Departments of Education and Labor

On June 21, 2018, the White House released a proposal to merge the Departments of Education and Labor into a new Department of Education and the Workforce. The proposal is part of a broader plan to reorganize the federal agencies. Secretary of Education Betsy DeVos released the following statement:

“President Trump campaigned and won with his promise to reduce the federal footprint in education and to make the federal government more efficient and effective. Today’s bold reform proposal takes a big step toward fulfilling that promise. Artificial barriers between education and workforce programs have existed for far too long. We must reform our 20th century federal agencies to meet the challenges of the 21st century.

This proposal will make the federal government more responsive to the full range of needs faced by American students, workers, and schools. I urge Congress to work with the Administration to make this proposal a reality.”

The reform plan discusses the elimination of duplicative programs and reduction of administrative costs in broad terms, but does not specify which programs would be eliminated nor does it say how it would reduce the federal workforce. The merged agency would have four subdivisions:

• K-12 education;
• Workforce and higher education;
• Enforcement of labor and civil rights laws; and
• Research.

Reactions to the reform plan fell along party lines. Congress would have to approve any merger of Departments, and the plan is unlikely to find broad agreement from most members of Congress.

Secretary DeVos’ press release includes a link to the full government reform plan: https://www.ed.gov/news/press-releases/statement-secretary-devos-government-reform-plan

Rep. Virginia Foxx (R-NC), Chair of the House Committee on Education and the Workforce, issued the following statement after President Donald J. Trump announced his reorganization plan for the executive branch:

“The federal government is long overdue for a serious overhaul. The proposed Department of Education and the Workforce is recognition of the clear relationship between education policy at every level and the needs of the growing American workforce. At the Committee on Education and the Workforce, we make these connections in everything we do. We welcome the administration’s focus on education and workforce issues together, and as we continue our oversight over the Department of Education and the Department of Labor, we look forward to working with the administration on the proposal and how the new department could function to best serve American students, workers, job creators, and families.”

A copy of Chairman Foxx’s statement is found at: https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=402877

House Committee on Education and the Workforce Ranking Member Bobby Scott (D-VA) released the following statement in response to the Trump administration’s proposal to merge the Departments of Labor and Education.

“The Trump administration’s plan to reorganize the federal government is a hastily concocted proposal that uses the false promise of ‘streamlining’ to cut investments in our future. There is no evidence that merging the Departments of Labor and Education would strengthen the performance of these agencies or produce better outcomes for students and workers. The Department of Labor is no more equipped to oversee elementary education policy than the Department of Education is prepared to enforce standards for coal mine safety. The logic behind this proposal is painfully thin. Instead of spending time rearranging organizational boxes in government, the country would be far better off if the president’s cabinet refocused its energy on working with Congress to strengthen education, support American workers, and improve the quality of life for people across the country.”

A copy of Ranking Member Scott’s press release is found at: https://bobbyscott.house.gov/media-center/press-releases/scott-statement-on-trump-administration-s-proposal-to-merge-departments

Senators Warren and Boozman introduce bill to protect student veterans

On June 22, 2018, Senators Elizabeth Warren (D-MA) and John Boozman (R-AR) introduced S. 3130, the Servicemembers Improved Transition through Reforms for Ensuring Progress (SIT-REP) Act, which would ensure that student veterans are not forced to endure additional financial burdens and are not denied access to school facilities due to the delay in processing the G.I. Bill benefit payments. The bill would:

• Prohibit a college, university, or training program from adopting a policy in which it imposes a late fee on eligible student veterans, denies access to school facilities, or requires them to take out additional loans due to a delayed G.I. Bill benefit payment from the VA to the school;
• In the event of a delay by the VA, prohibit the school from imposing late fees on student veterans or deny access to school facilities for up to 90 days after the school certifies tuition and fees;
• Require the VA to distribute G.I. Bill payments to the school within 60 days from when the school certifies tuition and fees for the student; and
• Mandate a report from the VA to Congress twice a year with a summary of cases in which G.I. Bill payments were delayed.

Representatives Gus Bilirakis (R-FL) and Ann Kuster (D-NH) introduced the original bill on Jan. 18, 2018, and H.R. 4830 passed the House on May 21, 2018.

A copy of Senator Warren’s press release is found at: https://www.warren.senate.gov/newsroom/press-releases/warren-boozman-introduce-bipartisan-legislation-to-protect-student-veterans

A copy of a June 25, 2018, press release from Representative Bilirakis, which welcomes the introduction of the Senate bill, is found at: https://bilirakis.house.gov/media/press-releases/bilirakis-kuster-legislation-support-veterans-higher-education-introduced

House Appropriations Committee delays consideration of FY 2019 Labor/HHS/ED Appropriations bill; Senate Appropriations Committee approves FY 2019 Labor/HHS/ED Appropriations bill

On June 25, 2018, the House Appropriations Committee announced that it has again postponed consideration of its FY 2019 Labor, Health and Human Services, and Education Appropriations bill. On June 15, 2018, the House Appropriation Subcommittee on Labor, Health and Human Services, and Education had approved its FY 2019 Appropriations bill by voice vote. The bill would fund the Department of Education at almost $71 billion, which is $43 million above the FY 2018 funding level. The bill would set the maximum Pell Grant award at $6,095.

On June 28, 2018, the Senate Appropriations Committee passed its FY 2019 Labor/HHS/ED Appropriations bill by a vote of 30-1. The bill would increase the Department of Education’s funding by $541 million to $71.4 billion. The bill would increase the maximum Pell Grant award by $100 to $6,195. The bill would also provide level funding for the FSEOG and FWS programs. Following the mark up, Chairman Roy Blunt (R-MO) and Ranking Member Patty Murray (D-WA) praised the bipartisan bill and the increases in funding for the Department of Education. Chairman Blunt said that he believes the bill will make it to the Senate floor this year.

A copy of the press release from the House Appropriations Committee is found at: https://appropriations.house.gov/news/documentsingle.aspx?DocumentID=395353

A copy of the press release from the Senate Appropriations Committee is found at: https://www.appropriations.senate.gov/news/senate-committee-clears-fy2019-labor-hhs-and-education-appropriations-bill

Democratic Senators Heitkamp and Tester introduce bill to expand PSLF program

On June 25, 2018, Senators Heidi Heitkamp (D-ND) and Jon Tester (D-MT) introduced S. 3124, the Help Encourage a Lifetime of Public Service (HELPS) Act, which seeks to encourage public service by waiving the interest on student loans for each year that a borrower works in a public service job. The bill also expands student loan forgiveness to eligible volunteer first-providers and first-time farmers by granting them eligibility through the Public Service Loan Forgiveness Program. Senator Heitkamp said in her press release that the bill would “incentivize more graduates to pursue public service career paths by allowing them to pay off more of their debt more quickly – enabling young professionals to better provide for their families, buy homes, and save for retirement.”

A copy of Senator Heitkamp’s press release is found at: https://www.heitkamp.senate.gov/public/index.cfm/press-releases?ID=411DC2D0-6780-4CB1-986C-203FCFF0ADA1

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.