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Washington News Brief


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

Democrats oppose two-year delay of state authorization and distance education rules

On June 11, 2018, Ranking Member of the Senate Health, Education, Labor and Pensions Committee Patty Murray (D-WA) and Ranking Member of the House Committee on Education and the Workforce Bobby Scott (D-VA) wrote to Secretary of Education Betsy DeVos opposing the proposed two-year delay in the state authorization and distance education rules. They said that “[d]elaying these rules will impede the ability of not only states to protect their residents, but also students to access key consumer protections and disclosures. They also conclude that delaying the rules will have a negative impact on taxpayers, “who will have less transparency and less rigorous oversight of potentially predatory colleges and universities seeking to evade states’ consumer protections.”

A copy of the letter is found at: https://www.help.senate.gov/ranking/newsroom/press/murray-scott-oppose-rule-delay-to-hold-online-education-programs-accountable-

On June 30, 2018, Ranking Member Bobby Scott issued a statement condemning the rollback of “a rule that would ensure consumer protections for students enrolled in online college programs, many of which are for-profit colleges, no matter where the school is physically located.” The press release is found at: https://democrats-edworkforce.house.gov/media/press-releases/ranking-member-scott-condemns-education-department-effort-to-rollback-accountability-for-online-education-programs

Senator Cornyn signs on as co-sponsor of College Transparency bill

On June 28, 2018, Senator John Cornyn (R-TX) signed on as a co-sponsor of S. 1121, the College Transparency Act of 2017, a bipartisan bill introduced on May 15, 2017, that would overturn the ban on the collection of student-level data that was included in the Higher Education Opportunity Act of 2008, the last reauthorization of the Higher Education Act. The bill was introduced by Senators Orrin Hatch (R-UT), Elizabeth Warren (D-MA), Bill Cassidy (R-LA), and Sheldon Whitehouse (D-RI). An article appearing in a July 2, 2018, article in Inside Higher Ed indicated that the decision by Senator Cornyn, the Majority Whip (the second-ranking Republican), to co-sponsor the bill suggests that the collection of student-level data is inevitable.

The biggest obstacle is Chairman of the House Committee on Education and the Workforce Virginia Foxx (R-NC), who authored the ban and who has expressed student privacy concerns in opposing the creation of a student unit record system. Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-TN) has also expressed concerns about protecting student privacy with the establishment of a federal database tracking student outcomes.

S. 1121 would prohibit the creation of a single database within the Department of Education and instead authorize the federal government to connect data it already collects. It also includes several measures to protect against privacy violations, including a ban on the sale of the data, a prohibition on access by law enforcement, and limits the use of personally identifiable information.

OIG releases report on oversight of accrediting agencies

On June 29, 2018, the Office of Inspector General (OIG) for the Department of Education released its report titled, “U.S. Department of Education’s Recognition and Oversight of Accrediting Agencies” (ED-OIG/A09R0003), which recommended that the Department do a better job of conducting oversight of college accreditors after it audited the Department’s recognition processes for accrediting agencies. The report stated that the Department did not have processes in place that provided assurances that the Department recognized only accrediting agencies meeting federal recognition criteria.

  • OPE does not have adequate controls over the school information that agencies use as evidence to demonstrate that they have appropriate accreditation standards and does not have effective mechanisms for evaluating school compliance with those standards before reaching an accreditation decision. The report found that the Department allows the accreditors to select the specific schools that they use to prove that they are in compliance and this can lead to “cherry-picking” by accreditors, which may not be indicative of the overall quality of how accreditors approve schools.
  • OPE does not have written policies and procedures to guide analysts through the review of agency recognition petitions, which can and has led to inconsistencies across agency reviews and among OPE analysts.
  • OPE takes a “reactive approach” to post-recognition oversight and performs oversight activities for an agency only if it is alerted that compliance issues may exist.

The OIG recommended that the Department:

  • Use risk-based procedures and readily-available information to identify which and how many schools each petitioning agency must use to demonstrate that it consistently applies and enforces its accreditation standards;
  • Adopt written policies and procedures for reviewing agency petitions for recognition; and
  • Adopt a risk-based methodology, using readily-available information, to identify high-risk agencies and prioritize its oversight of these agencies during the recognition period.

A copy of the OIG report is found at: https://www2.ed.gov/about/offices/list/oig/auditreports/fy2018/a09r0003.pdf

Democratic Senators want IRS to ensure that student debt relief will not be taxed

On July 1, 2018, Senators Patty Murray (D-WA), Ranking Member of the Senate Committee on Health, Education, Labor and Pensions, and Ron Wyden (D-OR), Ranking Member of the Senate Committee on Finance, sent a letter to Steven Mnuchin, Secretary of the Treasury, and David Kautter, Acting Commissioner and Assistant Secretary of the Treasury for Tax Policy, urging IRS to clarify that student loan debt relief issued to former Corinthian College students should not be taxed. In 2015, the IRS issued guidance regarding the taxability of federal student loan discharges for Corinthian students participating in borrower defense to repayment and closed school discharges, but the guidance did not address a similar process for private education loans.

The letter noted that the Department of Education has issued loan forgiveness to thousands of borrowers who attended Corinthian. In addition, the letter said that an additional settlement between the Consumer Financial Protection Bureau and Aequitas Capital Management cleared the private student loan debt of former Corinthian students. The letter pointed out that 47,000 Corinthian students in tax year 2017 received 1099-C forms, which are required to report canceled debt as taxable income. The Senators wrote that “[s]tudents should not be stuck with a tax bill when predatory for-profit colleges and corporations provide false and misleading information that leaves their borrowers with high levels of debt, poor job prospects, useless degrees and credentials, and in many cases, no degree at all.”

A copy of the Senators’ letter is found at: https://www.help.senate.gov/imo/media/doc/071818%20Murray-Wyden%20IRS%20Aequitas%20Loans.pdf

ED delays state authorization on distance education rules for two years

On July 3, 2018, the Department of Education published in the Federal Register a final rule that officially provides for a two-year delay of selected provisions of the final state authorization on distance education rules published on Dec. 19, 2016. The rules were scheduled to go into effect on July 1, 2018. Delay of the selected provisions is intended to provide the Department with an opportunity to hear further comments from the community regarding their concerns and to consider, through negotiated rulemaking, possible revisions to the 2016 final regulations. The Department is delaying the effective date until July 1, 2020, for the following provisions:

  • 34 C.F.R. § 600.2 Definitions (“State authorization reciprocity agreement”);
  • 34 C.F.R. § 600.9(c) (State authorization distance education regulations);
  • 34 C.F.R. § 668.2 Definitions (Definition of “Distance education”); and
  • 34 C.F.R. § 668.50 (Institutional disclosures for distance or correspondence regulations).

The Department did not delay the regulations related to State authorization of foreign locations of domestic institutions. Therefore, 34 C.F.R. § 600.9(d) went into effect on July 1, 2018.

Notwithstanding the delay of the selected provisions, the Department reminds institutions that they are still required to comply with the student consumer disclosure requirements related to distance education. 34 C.F.R. § 668.43(b) requires an institution to provide students its State approval or licensing and the contact information for filing complaints. The Department refers to DCL GEN-12-13, in Questions and Answers 9-13 for additional guidance on meeting the State contact information for filing complaints.

See: https://ifap.ed.gov/dpcletters/GEN1213.html

A copy of the final rule of July 3, 2018, is found at: https://ifap.ed.gov/fregisters/attachments/FR070318.pdf

An article in Inside Higher Ed of July 6, 2018, stated that some believe ED missed the July 1 deadline for the publication of the rule calling for the 2-year delay. The article reported that the Department said that the new rule was on public inspection on Friday, June 29, 2018, even though it was not published until July 3, 2018; therefore, it did not miss the deadline of July 1.

Hechinger Report finds that while ED rolls back rules, states step in to enforce rules

On July 7, 2018, The Hechinger Report titled, “As Feds Pull Back, States Step in to Regulate For-Profit Colleges and Universities,” was released. The Report, which provides an analysis of enforcement actions taken against for-profit institutions, found that there have been many enforcement actions, lawsuits, and legislative proposals through which states are cracking down on for-profit colleges and universities and loan-servicing companies they say “cheat or mislead students.” The Report found that as the Trump administration seeks to roll back rules, state scrutiny of for-profit companies has increased. The Report noted that the filings with the Securities and Exchange Commission (SEC) of publicly-traded for-profit companies are disclosing increasing numbers of class-action lawsuits by students based on state consumer protection laws, rather than federal consumer laws.

The Report described the problems in how much states can regulate for-profit institutions. For instance, 22 states do not provide financial aid for students attending for-profit institutions so these states have less standing to intervene. In addition, many students take online courses in other states. Finally, states do not have the resources to closely monitor for-profit institutions.

A copy of the Hechinger Report is found at: https://hechingerreport.org/as-feds-pull-back-states-step-in-to-regulate-for-profit-colleges-and-universities/

DoJ, CFPB, SEC, and FTC form Task Force on Market Integrity and Consumer Fraud

On July 11, 2018, Deputy Attorney General Rod Rosenstein announced the establishment of a new Task Force on Market Integrity and Consumer Fraud that results from an Executive Order issued by President Trump. The Task Force is made up of representatives from the Department of Justice, the Bureau of Consumer Financial Protection, the Securities and Exchange Commission, and the Federal Trade Commission to provide guidance for the investigation and prosecution of cases involving fraud on the government, the financial markets, and consumers, including cyber-fraud and other fraud targeting the elderly, service members and veterans, and other members of the public.

Mr. Rosenstein said: “Our goal is not to prosecute fraud, our goal is to deter fraud.” He went on to say: “By working together, we can achieve more effective and efficient outcomes. Drawing on our pooled resources, including subject-matter expertise, data repositories, and analysts and investigators, we can identify and stop fraud on a wider scale than any one agency acting alone.” Led by the Deputy Attorney General, the Task Force is directed to invite participation from other Departments, including the Departments of Education and Veterans Affairs.

A copy of the announcement is found at: https://www.justice.gov/opa/pr/department-justice-bureau-consumer-financial-protection-us-securities-and-exchange-commission

House Appropriations Committee passes FY 2019 Labor/HHS/ED Appropriations bill; Senate Appropriations Committee Approves FY 2019 Labor/HHS/ED Appropriations bill

On July 11, 2018, the House Appropriations Committee passed its FY 2019 Labor, Health and Human Services, and Education Appropriations bill by a vote of 30-22. The bill would increase the Department of Education’s funding to almost $71 billion, which is $43 million above the FY 2018 enacted level. The bill would set the maximum Pell Grant award to $6,095. During the 13-hour markup session, the Committee considered about 50 amendments, where the majority of the amendments challenged the Trump Administration’s family separation policy at the southern border. Of the seven education-related amendments, only two passed the Committee:

  • By voice vote, the Committee passed an amendment introduced by Congresswoman Betty McCollum (D-MN) that would allow a borrower of a student loan who is undergoing cancer treatment to defer payment on the loan; and
  • By a vote of 30-20, the Committee passed an amendment introduced by Subcommittee Chairman Tom Cole (R-OK) that would set new criteria for how FSA employees become eligible for bonuses.

One amendment that was defeated by a vote of 23-26 was offered by Congresswoman McCollum (D-MN) that would prohibit the use of funds to recognize ACICS as an accrediting agency.

On June 28, 2018, the Senate Appropriations Committee passed its FY 2019 Labor/HHS/ED Appropriations bill by a vote of 31 to 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 and continue funding to make borrowers who were enrolled in ineligible repayment plans eligible for Public Service Loan Forgiveness (PSLF). The bill would also reaffirm and expand language included in the FY 2018 Appropriation bill that provided a legislative fix to address FAFSA data-sharing that has been a problem for students, financial aid administrators, and scholarship providers. The language in the bill would allow an institution to share FAFSA data, with the student’s consent, with an organization assisting the applicant in applying for and receiving Federal, State, local or tribal assistance. The Committee Report on the bill said that the Committee would support further simplification of the FAFSA and efforts to reduce the burden on students and institutions in performing verification. The Committee Report also encouraged the Department to use its authority to reimburse colleges and universities for canceled Perkins Loans for which no reimbursement has been provided.

Following the mark up of the Senate Appropriations bill, 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. Senator Murray said that the bill largely “rejected the president’s push for massive cuts to investments that we all know are really important.” 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

Senate and House Democrats introduce Know Before You Owe bill

On July 12, 2018, Senators Dick Durbin (D-IL), Tina Smith (D-MN), Jack Reed (D-RI), Sherrod Brown (D-OH), Tammy Baldwin (D-WI), and Ben Cardin (D-MD) introduced S. 3205, the Know Before You Owe Private Education Loan Act of 2018, which would amend the Truth in Lending Act and the Higher Education Act to require institutions of higher education to certify the student’s enrollment status, cost of attendance, and estimated federal financial assistance before the student could take out a private education loan. The goal of the bill is to prevent unnecessary private student loan debt and improve transparency. H.R. 6352, the Know Before You Owe Act was introduced as a companion bill by Congressman Jared Polis (D-CO) on July 12, 2018.

A copy of the Senators’ press release is found at: https://www.durbin.senate.gov/newsroom/press-releases/durbin-smith-reed-and-senators-introduce-bill-to-prevent-unnecessary-private-student-loan-debt-and-improve-transparency-

20 State Attorneys General urge the Department of Education to restore student loan information sharing policy

On July 13, 2018, 20 State Attorneys General (AGs) sent a letter to Secretary of Education Betsy DeVos urging the Department to reverse its decision to limit the Department’s disclosure of certain student loan information to law enforcement agencies, including AGs, “for use in protecting their constituents from illegal, unfair, abusive, or deceptive practices by actors in the higher education industry.”

Since at least 2000, the Department’s policy was to permit routine disclosures of student loan information to State Attorneys General responsible for investigating and prosecuting crimes and civil frauds when that information is relevant to their enforcement responsibilities. In 2016, ED amended its policy to expand law enforcement agencies’ access to relevant student loan information by removing the limitation that disclosures could only be made for possible violations of criminal laws and civil fraud. The letter noted that in a Federal Register Notice of June 13, 2018, the Department “quietly eliminated its policy on disclosures of consumer complaints and related information for use by law enforcement agencies…” The Department also eliminated its policy on disclosures of records related to borrowers’ requests for relief under the borrower defense regulations. The AGs asked Secretary DeVos to “recommit to its historic law enforcement partnerships by restoring its policy on routine disclosures of student loan information for use by State Attorneys General and other law enforcement agencies.” The AGs asserted that the Department “risks further hampering the ability of State Attorneys General and other law enforcement officials to protect students from predatory practices and to secure relief for students victimized by fraud and other unlawful activities.”

A copy of the State Attorneys General letter is found at: https://nj.gov/oag/newsreleases18/NJ-WA-Privacy-Act-Letter.pdf

A copy of the Federal Register Notice is found at: https://www.gpo.gov/fdsys/pkg/FR-2018-06-13/pdf/2018-12700.pdf

GAO releases report on department’s postsecondary school certification process

On July 18, 2018, the Government Accountability Office (GAO) released its report titled, “Education’s Postsecondary School Certification Process,” (GAO-18-481) which examined (1) how the Department of Education certifies schools to administer federal student aid and how frequently schools are approved or denied certification; and (2) the role of compliance audits in the certification process. GAO analyzed data on school certification outcomes for calendar years 2006-2017 and found that the Department fully or provisionally approved almost 90 percent of the schools applying for initial certification or recertification to receive federal student aid. Of the 14,910 applications for recertification, 76 percent were fully recertified and 21 percent were provisionally certified. Only 11 percent of the schools applying for initial certification were denied and only 3 percent of the schools applying for recertification were denied.

GAO also reviewed Federal Student Aid’s (FSA) process for evaluating a school’s capability to administer federal student aid. While FSA looks at multiple sources of information during the review process, the Department relies on compliance audits for direct information about how well schools administer federal student aid. GAO noted that the Inspector General annually selects a sample of compliance audits for quality reviews based on risk factors, such as previously cited for errors. In fiscal years 2006-2017, 59 percent of the 739 selected audits received failing scores. Because the higher risk audits were selected for review, Inspector General officials said they cannot assess the overall prevalence of quality problems in compliance audits. In the end, GAO did not make any recommendations.

A copy of the GAO report is found at: https://www.gao.gov/assets/700/693151.pdf

President establishes National Council for the American Worker

On July 19, 2018, the President signed an Executive Order to establish the President’s National Council for the American Worker, which will encourage the executive branch to work with private employers, educational institutions, labor unions, other nonprofit organizations, and State, territorial, tribal, and local governments to update and reshape our education and job training landscape to better meet the needs of American students, workers, and businesses. The goal of the National Council is to establish a national strategy for training and retraining the workers needed across high-demand industries. “Growing America’s workforce is an important goal. To help achieve it, the Council will develop a national strategy to raise awareness of workforce issues…It will also create a plan for recognizing companies that demonstrate excellence in workplace education, retraining, and workforce investment.”

A copy of the Executive Order is found at: https://www.whitehouse.gov/presidential-actions/executive-order-establishing-presidents-national-council-american-worker/

At the signing event of the Executive Order, the President also urged companies and trade groups to sign a “Pledge to America’s Workers” – a commitment to expand apprenticeships, increase on-the-job training, and provide Americans from high school to near-retirement with opportunities to obtain skills to secure stable jobs and careers in the modern economy.

Twenty-three companies and associations were the first to sign the pledge at the White House. “By signing the Pledge to America’s Workers, these great companies…are affirming their commitment to train American workers for American jobs,” the President emphasized. “Because America’s strength, America’s heart, and America’s soul is found in our people.”

On the same day, the White House Council of Economic Advisors released a report titled, “CEA Report: Addressing America’s Reskilling Challenge,” which outlined the importance of re-skilling America’s workers for the jobs of the future. The report concluded that restrictions on the use of federal funds, which were designed to address labor market challenges of another era, “may not be optimal for the future reskilling challenges, especially those linked to trade and technological change.” The report suggested that to “more effectively facilitate the re-entry of workers into employment quickly and with less household budget disruption, Pell Grants should be made available to high-quality, short-term retraining programs,” or programs shorter than 600 hours.

There is a great deal of support for expanding Pell Grant eligibility for short-term programs from both the Republicans and Democrats. Both the PROSPER Act, the reauthorization of the Higher Education Act passed by the House Committee on Education and the Workforce in December 2017, and the Aim Higher Act, the bill to reauthorize the Higher Education Act that will be introduced by the House Democrats in the near future include proposals for funding short-term programs with Pell Grants.

A copy of the White House Council of Economic Advisors’ report is found at: https://www.whitehouse.gov/briefings-statements/cea-report-addressing-americas-reskilling-challenge/

Secretary of Education Betsy DeVos released this statement following the White House announcement:

“With today’s announcement, President Trump continues to make good on his promise to put America’s students and workers first. This Administration understands that a dynamic and changing economy requires dynamic and changing approaches to education and workforce development. The partnerships announced today involve those who are best-positioned to identify ideas and drive solutions. The President’s new initiative helps engage leaders across diverse sectors in an effort to open new pathways and opportunities for America’s students who should be free to pursue successful careers and meaningful lives.”

A copy of Secretary DeVos’ press release is found at: https://www.ed.gov/news/press-releases/secretary-devos-national-council-american-worker-will-put-americas-students-first?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=

On July 24, 2018, the official order was published in the Federal Register, which is to ensure that students and workers can access affordable education and training that will “equip them to compete and win in the global economy.” The order is found at:

House Democrats introduce Aim Higher Act to reauthorize the Higher Education Act

On July 24, 2018, all 17 House Democrats on the House Education and the Workforce Committee announced and released a copy of their proposal to reauthorize the Higher Education Act. The bill is entitled the Aim Higher Act and aims to make college more affordable by reducing student debt and simplifying federal student aid. The bill also invests in program and services, such as career counseling and campus-based child care, that will help students graduate and put them on the path of success. Ranking Member of the House Education and the Workforce Committee Bobby Scott said:

“The Aim Higher Education Act is a serious and comprehensive proposal to give every student the opportunity to earn a debt-free degree or credential. It provides immediate and long-term relief to students and parents struggling with the cost of college, it puts a greater focus on helping students graduate on time with a quality degree that leads to a rewarding career, and it cracks down on predatory for-profit colleges that peddle expensive, low-quality degrees at the expense of students and taxpayers.”

As long as Republicans are in control of the House, the Senate, and the White House, there is no chance that the Aim Higher Act will pass. However, the bill suggests what the Democrats would like to see in higher education policy should they regain control of the House this fall. The Democrats’ bill largely rejects the provisions included in the PROSPER Act, the House Republican bill to reauthorize the Higher Education Act.

Based on the bill’s summary, the following provisions are included in the Aim Higher Act:

Improving access to a quality degree:

  • Empowers students to earn postsecondary credit while still in high school through dual enrollment and early college high school programs;
  • Improves access to vulnerable student populations:
    • Helps states, tribes, and territories establish or expand initiatives to help foster children and homeless youth;
    • Allows DREAMERS access to Federal aid;
    • Enables incarcerated individuals access to Pell Grants so that they can earn a college degree;
    • Improves access to higher education for Native American students;
    • Provides tuition assistance for students in U.S. territories;
    • Strengthens TRIO and GEAR UP programs;
    • Simplifies the FAFSA by reducing the number of questions;
    • Improves available postsecondary data by repealing the student unit record ban;
    • Strengthens institutional accountability and quality:
      • Strengthens effective collaboration within the accountability triad and tasks the Department with conducting Title IV compliance checks; heightens state authorizers’ role by making them keep track of complaints and ensure that facilities are safe and adequate; and frees accreditors to focus on academic quality and transparency;
      • Supports institutions to improve student outcomes and improves the cohort default rate metric by adjusting the number of borrowers in long-term forbearance; and
      • Includes robust safeguards for taxpayers and students:
        • Changes 90/10 rule to 85/15 and closes loopholes;
        • Prohibits all institutions that spend less than half of their tuition revenue on instruction from using federal funds for marketing, advertising, recruiting, or lobbying;
        • Prohibits institutions from forcing students to sign pre-dispute/class action ban agreements;
        • Strengthens the legal definition of a nonprofit institution and establishes a transparent process for approving conversions at the Department; and
        • Maintains the requirement that career programs lead to gainful employment and codifies the requirement that students who are defrauded by their colleges are provided full relief.

Making college more affordable

  • Increases grant aid for low-income students by improving Pell Grants and strengthening FSEOG;
  • Empowers students to earn while in college by doubling the Federal allocation for the FWS program;
  • Improves the student loan program by reviving the Perkins Loan Program; requiring better up-front counseling and annual counseling; making borrowing less expensive; simplifying the repayment process; helping borrowers avoid default; improving servicing of Federal student loans; and maintaining State authority to protect consumers;
  • Creates a Federal-State partnership to incentivize States to reinvest in higher education; and
  • Invests in open educational resources.

Increasing college completion

  • Supports multiple pathways to completion by expanding Pell Grant eligibility to quality short-term programs and supporting community colleges career and technical education programs;
  • Improves remediation;
  • Invests in student supports:
    • Improves completion at community colleges;
    • Supports students with disabilities;
    • Provides supports for foster and homeless youth;
      Improves campus child care access;
    • Promotes evidence-based prevention and intervention strategies to combat substance use disorder; and
    • Supports students who are veterans.
  • Supports innovation with transparency and accountability by establishing a demonstration project for competency-based education programs;
  • Creates a strong national security workforce;
  • Strengthens teacher education;
  • Invests in historically black colleges and universities and minority-serving institutions;
  • Improves campus safety by requiring the Secretary to develop a standardized online survey tool regarding student experiences with domestic violence, dating violence, sexual assault, and stalking, where the results will be published;
  • Supports campus diversity and strengthening civil rights enforcement; and
  • Awards completion with a degree by amending FERPA to allow for reverse transfer of student data, permitting a student’s current institution to send enrollment and completion data to an institution where the student was previously enrolled, with the consent of the student.

A copy of the bill’s summary is found at: http://democrats-edworkforce.house.gov/imo/media/doc/Aim%20Higher%20Act%20–%20Bill%20Summary.pdf

A copy of a document comparing the Democrat and Republican versions is found at: http://democrats-edworkforce.house.gov/imo/media/doc/Aim%20Higher%20Act%20–%20Side%20by%20Side1.pdf

A copy of the press release issued from Ranking Member Scott’s office is found at: https://bobbyscott.house.gov/media-center/press-releases/all-17-committee-democrats-unveil-debt-free-college-plan

Five Democratic Senators urge NACIQI to move forward with the study on for-profit conversions

On July 20, 2018, five Democratic Senators sent a letter to the National Advisory Committee on Institutional Quality and Integrity (NACIQI) urging its subcommittee to work expeditiously on the problem of how college accreditors approve for-profit to nonprofit college conversions. The Senators requested that NACIQI release the findings and report within three months so that its recommendations can inform the Department’s intended rulemaking on accreditation.

A copy of the letter is found at: https://www.warren.senate.gov/imo/media/doc/2018.07.20%20Letter%20to%20NACIQI%20re%20subcommittee%20on%20sectoral%20conversions.pdf

ED to debut a redesigned website for the FAFSA

On July 24, 2018, the Department of Education issued an Electronic Announcement announcing that beginning this summer, students and parents will have two ways to complete the FAFSA form, a redesigned fafsa.gov website and a mobile app. The Department launched a redesigned website on July 22, 2018. The page design of fafsa.gov now has a more modern and user-friendly look and, to ease the navigation through the site, some questions on fafsa.gov are now grouped in a different order. Next month, the Department plans to roll out the beta version of a student aid mobile app that would permit students to complete the FAFSA application as well as make loan payments and complete other financial aid tasks. A complete version of the mobile app is set to launch on Oct. 1, 2018, just in time for the beginning of the 2019-2020 award year processing.

A copy of the Electronic Announcement is found at: https://ifap.ed.gov/eannouncements/072418TheFAFSAFormisGoingMobile.html

ED plans to eliminate GE rules

Based on a draft regulation reviewed by The New York Times, an article in the July 26, 2018, New York Times stated that Secretary of Education Betsy DeVos plans to eliminate the gainful employment regulation, not just modify it. The article further said that according to the draft rule, the Department proposes to hold institutions accountable by publishing information on its database, which may be the College Scorecard. The Department plans to update the College Scorecard with specific program information, which will improve transparency and provide information to students so that they can make informed enrollment decisions.

A copy of the article is found at: https://www.nytimes.com/2018/07/26/us/politics/betsy-devos-for-profit-colleges.html

ED announces release of NPRM for borrower defense to repayment rules

On July 26, 2018, the Department of Education announced that it was proposing a new package of regulations aimed at protecting student borrowers, holding higher education accountable for misrepresentation and fraud, and providing financial protections to taxpayers by at-risk institutions. Once it is published in the Federal Register on July 31, 2018, the public can provide comments over the next 30 days.

Secretary of Education Betsy DeVos said: “Our commitment and our focus has been and remains on protecting students from fraud. The regulations proposed today accomplish that by laying out clear rules of the road for higher education institutions to follow and holding institutions, rather than hardworking taxpayers, accountable for making whole those students who were harmed by an institution’s deceptive practices.”

According to the Department’s press release, the borrower defense to repayment proposed rule would:

  • Replace the current “state standard” for adjudicating claims with a federal standard that defines misrepresentation and enables a more expeditious review of student claims;
  • Put into place a borrower defense to repayment adjudication process that is clear, consistent, and fair to borrowers who were harmed by institutional misconduct;
  • Facilitate collection and review of evidence for deciding claims and ensure that the Secretary of Education can recoup from institutions the financial losses associated with successful borrower defense claims;
  • Encourage students to seek remedies directly from institutions that have committed acts of misrepresentation;
  • Expand from 120 days to 180 days the period of time during which students who left an institution prior to its closure are eligible for a closed school loan discharge while at the same time incentivizing closing institutions to engage in orderly teach-outs, which enable more students to complete their program (students would not be eligible for a closed school discharge if the school offers an approved “teach-out” or a wind-down of the program);
  • Ensure that institutions requiring students to engage in mandatory arbitration or prohibiting them from participating in class action lawsuits provide plain language explanations of these provisions to enable students to make an informed enrollment decision;
  • Protect taxpayers by requiring institutions to post a letter of credit when events occur that put the institution’s continuing operations or financial stability at risk; and
  • Prevent guaranty agencies from charging borrowers a fee if a defaulted loan goes into repayment within 60 days.

The proposed rule would require borrowers to prove that their college or university acted intentionally in misleading or deceiving them or at least had acted with “a reckless disregard for the truth.” It would also keep the current “preponderance of evidence” standard for the claims, but the Department said it is considering raising the evidentiary standard to “clear and convincing” evidence. The Department said it is also undecided on whether to allow borrowers to file a fraud claim without first having defaulted on their federal student loans, and welcomed public comment on whether to continue to accept such “affirmative” claims, as is currently allowed, or to accept only “defensive” claims made by borrowers who have defaulted and are challenging the Department’s effort to collect on their loan.

A copy of the press release is found at: https://www.ed.gov/news/press-releases/us-department-education-takes-action-protect-student-borrowers-hold-higher-education-institutions-accountable-deceptive-practices?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=

VA Secretary nominee expresses support for revising 90/10 rule

According to a recent report in Politico, Veterans Affairs Secretary nominee Robert Wilkie responded to a series of questions posed by the Ranking Member of the Senate Health, Education, Labor and Pensions Committee Patty Murray (D-WA) following his nomination hearing before the Senate Veteran Affairs Committee. His responses indicated his support for revising the 90/10 calculation to include the Post-9/11 GI Bill benefits in the 90 percent when he said: “While VA defers to the Department of Education (ED) on the 90/10 calculation, there is an argument for including the Post-9/11 GI Bill in the 90 percent cap. Under the present structure, some institutions may be marketing to Veterans because the Federal education benefits they receive are treated the same way as private funds in the 90/10 calculation. I believe institutions should not aggressively recruit Veterans principally because of financial motives.”

A copy of VA Secretary-nominee Wilkie’s responses is found at: https://cdn.ymaws.com/www.ncher.us/resource/resmgr/daily_briefing/Wilkie.pdf

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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