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Washington News Brief


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

Politico reports that Schmoke no longer serves as the Department’s Chief Enforcement Officer

An article in the Jan. 24, 2019 Politico reported that Dr. Julian Schmoke is no longer the Department of Education’s Chief Enforcement Officer. Dr. Schmoke was a former Dean at DeVry University and was named the Chief Enforcement Officer of the Student Aid Enforcement Unit in August 2017. He now serves as a Senior Advisor and is the overseer of the team that investigates colleges for violations of the Clery Act. The article reported that his reassignment is due to the criticism from the Democrats about his previous work with a for-profit institution.

Jeff Appel, the Director of Policy Liaison and Implementation in Federal Student Aid (FSA), has been assigned the duties of the Chief Enforcement Officer until a replacement is named.

Alexander offers three proposals for reauthorization of the HEA

On Feb. 4, 2019, Chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee Lamar Alexander (R-TN) offered three proposals to update the Higher Education Act at an event hosted by the American Enterprise Institute (AEI). Senator Alexander offered three proposals “to help students afford college and make their degrees worth the time and money they pay for them.” The three proposals laid out by the Senator are:

  1. Simplify the FAFSA, which now has 108 questions, by reducing the number of questions to no more than 25 questions;
  2. Scrap the current system of 9 different ways to repay federal student loans and replace the system with two options, a standard 10-year repayment plan and an income-based repayment plan that would limit payments to no more than 10 percent of the borrower’s discretionary income. Both repayment plans would automatically deduct payments from the borrower’s paycheck; and
  3. Establish a new accountability system, a student loan repayment rate, based upon the number of borrowers that actually repay their student loans by program, which should lower tuition for some programs or even discourage schools from offering programs that are not worth it to students. This would replace the gainful employment rule and apply to all programs at all institutions.

Senator Alexander also discussed other proposals drawn from bills from other HELP Committee members over the last few years. The proposals include expanding competency-based education programs; requiring institutions to use uniform language in financial aid award notices; offering flexibility for loan counseling including a discussion of how much money students should borrow; expanding data on student outcomes; and allowing Pell Grants to be used in new ways, such as for incarcerated individuals and for students enrolled in short-term programs. Senator Alexander asserted his commitment to work with Ranking Member Patty Murray (D-WA) on campus security measures.

During the last four years, the Senate HELP Committee has held 27 hearings on the HEA and Senator Alexander’s goal is to report a reauthorization bill out of the committee by spring so that the full Senate can consider it this summer.

A copy of the Senator’s prepared remarks is found at: https://www.alexander.senate.gov/public/_cache/files/7a083d10-0937-475f-bce4-1e6fe874dd5c/aei—chairman-alexander-prepared-remarks.pdf

Senator Alexander described his three proposals in an Op-ed in The New York Times on Feb. 7, 2019, titled “Going to College Should Not Be a Financial Albatross,” which is found at: https://www.nytimes.com/2019/02/07/opinion/college-student-loans.html

NCES releases report on dual enrollment students

On Feb. 5, 2019, the National Center for Education Statistics (NCES) released a report titled, “Dual Enrollment: Participation and Characteristics” [NCES 2019-176, February 2019], where students were asked about college courses taken concurrently while enrolled in high school. This arrangement is commonly known as “dual” enrollment and is promoted as a means to help students prepare and demonstrate their readiness for the “rigors of college coursework” as well as serving as an avenue to potentially save on the costs of college. Dual enrollment courses are based on collaborations between high schools and colleges and do not include Advanced Placement or international Baccalaureate courses.

The findings demonstrate the following:

  • About a third of students (34 percent) took college coursework while in high school;
  • Students whose parents had higher levels of education more commonly took college courses while in high school;
  • A lower percentage of Hispanic students (30 percent) and Black students (27 percent) took college courses while in high school than did White or Asian students (both 38 percent);
  • Students who took college courses while in high school generally took those college courses at their own high school by teachers the partner colleges approved, or by college professors beamed in by video (80 percent); and
  • Students who took college courses while in high school were more likely to be enrolled in city schools (26 percent) than students in rural or suburban high schools (11 percent).

A copy of the NCES report is found at: https://nces.ed.gov/pubs2019/2019176.pdf

Trump’s State of the Union speech does not mention higher education

On Feb. 5, 2019, President Trump delivered his State of the Union address, which focused on immigration and border security. While he called on Congress to enact new school choice legislation and fund paid family leave for new parents, the President made no mention of higher education. He also advocated the need for unity across the aisle.

Secretary of Education Betsy DeVos issued a statement after the address stating: “I look forward to continuing to work with Congress on ways to give students opportunities to pursue the education that engages their curiosity, unlocks their creativity, and empowers them to reach their fullest potential. It’s time to do what’s best for kids and get to work.”

A copy of the Secretary’s statement is found at: https://www.ed.gov/news/press-releases/us-secretary-education-betsy-devos-president-right-call-expanded-education-freedom

Business leaders encourage the Trump Administration and Members of Congress to reauthorize the Higher Education Act

On Feb. 5, 2019, the Business Roundtable, made up of major employers in all 50 states, sent a letter to President Trump and all members of the 116th Congress urging them to reauthorize the Higher Education Act and incorporate “key improvements to increase access to high-quality, affordable education and on-the-job training for America’s students and workers.” The letter concluded that increasing education and career opportunities for America’s workforce is one of six areas where business and government can work together to advance economic priorities.

A copy of the Business Roundtable’s letter is found at: https://s3.amazonaws.com/brt.org/BRT-OpenLettertoPresidentTrumpandCongress2.5.19.pdf

Democratic Senators and Congressman introduce bill to help students without access to parental information

On Feb. 7, 2019, Senators Ben Cardin (D-MD) and Chris Van Hollen (D-MD) introduced S. 416, the FAFSA Fairness Act of 2019. On the same day, Congressman Elijah Cummings (D-MD) introduced a companion bill, H.R. 1075, in the House. The bill would allow students who are unable to obtain parental information because of mitigating circumstances, such as abuse or neglect, to submit their FAFSA after answering a single screening question, to be devised by the Secretary. The applicant would be considered a “provisionally independent” student and would receive an estimated Expected Family Contribution and an estimated Pell Grant award based on the provisional independent status. The status would be identified on the ISIR, and the school would have to reach out to these students to discuss the next steps for applying for a dependency override. Currently, a dependent student who submits a FAFSA without parent information would have his/her FAFSA rejected.

A copy of the Senate version of the bill is found at: https://www.congress.gov/bill/116th-congress/senate-bill/416/text

ED extends the Second Chance Pell Grant program allowing current prisoners to use Pell Grants

On Feb. 13, 2019, the Department of Education extended the Second Chance Pell Grant program, which allows current prisoners to use Pell Grants to enroll in higher education institutions. NCHER Daily Briefing reported that Sean Addie, the Department’s Director of Correctional Education, said that the fourth year of the program would begin on July 1, 2019. During the first year, 8,500 students received $13.5 million in Pell Grant funds; during the second year, 11,000 students received $22 million in Pell Grant funds; and up to now for the third year, 10,000 students received about $13.4 million. The Director said that it is too early to evaluate the pilot program’s success.

Warren and Hassan send letter to Secretary DeVos to re-establish ability to report complaints

On Feb. 14, 2019, Senators Elizabeth Warren (D-MA) and Maggie Hassan (D-NH) sent a letter to Secretary of Education Betsy DeVos to re-establish the ability for individuals to anonymously report complaints through the Federal Student Aid’s Feedback System.

The letter also said, “The Department’s actions have put students and taxpayers at risk at a time when we need more visibility into potential misconduct in the federal financial aid programs-not less. The Department must restore the ability for users to submit complaints anonymously, and to submit information regarding general or systemic problems that are not related to a specific individual.”

A copy of the press release, which includes the text of the letter, is found at: https://www.warren.senate.gov/newsroom/press-releases/senator-warren-joins-senator-hassan-in-calling-on-department-of-education-to-reestablish-important-mechanism-to-report-fraud-and-abuse-in-federal-financial-aid-programs

OIG releases report critical of FSA’s lack of oversight of student loan servicers

On Feb. 14, 2019, the Department of Education’s Office of Inspector General (OIG) released a report titled, “Federal Student Aid and Additional Actions Needed to Mitigate the Risk of Servicer Noncompliance with Requirements for Servicing Federally Held Student Loans” (ED-OIG/A05Q0008) that criticized Federal Student Aid (FSA) for its failure to adequately provide oversight to student loan servicers. The report alleged that the student loan servicers did not provide borrowers with the guidance and protection they needed as they sought the best repayment plan. The OIG focused on FSA operations from Jan. 1, 2015 to Sept. 30, 2017 and found that “FSA’s oversight activities identified instances of servicers’ not servicing federally held student loans in accordance with Federal requirements.” “In most cases…FSA did not take actions stronger than correcting the accounts of those affected…”

In response to the report, FSA Chief Operating Officer James Manning disputed the report’s “broad negative characterization” of the Department’s oversight of student loan servicers. “While there is room for improvement,” the IG report overstated the severity of the problems with the loan servicers, according to Mr. Manning.

A copy of the report is found at: https://www2.ed.gov/about/offices/list/oig/auditreports/fy2019/a05q0008.pdf

VA groups urge VA Secretary to keep GI Benefits out of the hands of predatory colleges

On Feb. 20, 2019, The Washington Post published an article titled “Veterans Groups Ask VA Secretary to Keep GI Benefits Out of the Hands of Predatory Colleges,” following the release of an OIG audit titled, “VA’s Oversight of State Approving Agency Program Monitoring for Post-9/11 GI Bill Students” (#16-00862-179) that found that the VA’s lax oversight of colleges could result in $2.3 billion in tuition benefits going to predatory schools during the next five years. The audit from the OIG documented a breakdown in the review, approval and monitoring of college programs that receive GI bill benefits. The report indicated that about $585 million in improper payments a year will be made to about 11,200 students using GI Bill benefits who will enroll in programs that violate VA standards and the majority of the money will go to for-profit colleges.

A copy of the article is found at: https://www.washingtonpost.com/education/2019/02/20/veterans-groups-ask-va-secretary-keep-gi-benefits-out-hands-predatory-colleges/?utm_term=.33fa5c5dcd63

A copy of the report is found at: https://www.va.gov/oig/pubs/VAOIG-16-00862-179.pdf

Scott and Foxx announce five bipartisan hearings on higher education

On Feb. 21, 2019, Chairman Bobby Scott (D-VA) and Ranking Member Virginia Foxx (R-NC) of the House Education and Labor Committee announced plans to hold five bipartisan hearings on higher education. The joint announcement reflects the formal start of an effort to reauthorize the Higher Education Act. The five hearings will be:

  • The Cost of College: Student Centered Reforms to Bring Higher Education Within Reach
  • Strengthening Accountability in Higher Education to Better Serve Students and Taxpayers
  • The Cost of Non-Completion: Improving Student Outcomes in Higher Education
  • Engines of Economic Mobility: The Critical Role of Community Colleges, Historically Black Colleges and Universities, and Minority-Serving Institutions in Preparing Students for Success
  • Innovation to Improve Equity: Exploring High-Quality Pathways to a College Degree

Chairman Scott said: “Through regular order and a collaborative process, the Committee will consider a comprehensive Higher Education Act reauthorization that puts a quality and affordable higher education within reach for every student.” Ranking Member Foxx said: “Over the past many years on this committee, Chairman Scott and I have listened and grown increasingly concerned with the path of higher education in this country. I am heartened by his eagerness to address these serious issues early in this Congress, and renew my commitment, once again, to working with him and any of our colleagues who understand that the status quo cannot hold.”

A copy of the press release is found at: https://republicans-edlabor.house.gov/news/documentsingle.aspx?DocumentID=403221

Senate Democrats urge DeVos to address backlog of student loan forgiveness claims

On Feb. 21, 2019, 18 Senate Democrats sent a letter to Secretary of Education Betsy DeVos, urging her to immediately address the backlog of federal student loan forgiveness claims from borrowers who were defrauded by their schools. The data show that no actions have been taken by the Department of Education on any borrower defense to repayment claims during the period between the end of June 2018 and the end of September 2018. There is now a backlog of 139,000 claims. “Students should never have to worry about predatory practices from colleges as they look to improve their lives and career prospects through postsecondary education.”

A copy of the press release with the full text of the letter is found at: https://www.klobuchar.senate.gov/public/index.cfm/news-releases?ID=10A8DB70-479B-480A-BD2E-600F832E1965

Waters sends letter of support to CFPB employees

On Feb. 22, 2019, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, sent a letter to the employees of the Consumer Financial Protection Bureau (CFPB) denouncing the former Acting Director Mick Mulvaney’s tenure, reaffirming her commitment to focus on the Bureau’s actions, and urging employees to become whistleblowers if they witness fraud, abuse of authority, or gross mismanagement.

A copy of the press release including the text of the letter is found at: https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=402349

ED distributes FY 2016 draft cohort default rates

On Feb. 25, 2019, Federal Student Aid (FSA) distributed the FY 2016 draft cohort default rate (CDR) notification packages to all eligible domestic and foreign schools only. The time period for appealing the FY 2016 draft cohort default rates begins on March 5, 2019.

A copy of the announcement is found at: https://ifap.ed.gov/eannouncements/022519FY2016DraftCDRDistributedFeb25.html

Consumer advocacy group urges increased oversight of for-profit colleges and their lead generators

Seth Frotman, who resigned from the Consumer Financial Protection Bureau (CFPB), formed a nonprofit organization, called the Student Borrower Protection Center (SBPC), to encourage more oversight of the student loan industry. On Feb. 1, 2019, the SBPC released a report that examined the current oversight of lead generators. The report identified state and Federal Trade Commission (FTC) enforcement actions taken against lead generators and concluded that these entities qualify as third-party servicers. The report said that the schools should disclose contracts with lead generators and the Department should require lead generators to conduct annual compliance audits.

A copy of the report is found at: https://protectborrowers.org/the-predatory-underworld-of-companies-that-target-veterans-for-a-buck/

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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