Washington News Brief

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

Alexander signs on to College Transparency Act

Senator Lamar Alexander (R-TN), Chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, signed on as a co-sponsor of the College Transparency Act, a bill that would remove the federal ban on a student-level data system. The bill was introduced as S.800 by Senator Bill Cassidy (R-LA) on March 14, 2019. A companion bill was introduced as H.R.1766 by Congressman Paul Mitchell (R-MI) on March 14, 2019. Proponents of the bill support tracking student outcomes of all students and not just for those who are Title IV recipients.

Durbin and Lee lead effort to eliminate rewritten borrower defense rule

On Sept. 26, 2019, Senator Dick Durbin (D-IL) and Representative Susie Lee (D-NV) led the introduction of a Congressional Review Act (CRA) resolution of disapproval on the Department of Education’s revised borrower defense to repayment rule. CRA resolutions allow Congress to overturn regulatory actions of federal agencies.

Senator Durbin said: “This rule is another Trump-DeVos giveaway to the notorious for-profit colleges at the expense of defrauded student borrowers.” Representative Lee said: “Student loan borrowers deserve financial protection when they are defrauded or cheated by their schools – it’s as simple as that. The original 2016 borrower defense rule was a commonsense policy meant to level the playing field between students and the predatory colleges taking advantage of them. But Secretary DeVos’ new rule makes the process of applying for and granting borrower defense forgiveness unnecessarily difficult and burdensome for the students who we are supposed to be protecting.”

A copy of the press release is found at: https://www.durbin.senate.gov/newsroom/press-releases/durbin-lee-lead-congressional-effort-to-overturn-devos-borrower-defense-rule

Congressional Hispanic Caucus Releases Higher Education Priorities

On Oct. 1, 2019, Congressional Hispanic Caucus (CHC), led by Chairman Joaquin Castro (D-TX) and CHE Education and Labor Task Force Chairman Raúl Grijalva (D-AZ) released their CHC Higher Education Priorities for the reauthorization of the Higher Education Act. They indicated that the priorities identify policy solutions to addressing the inequities and affordability for Hispanic and Latino students. Congressman Grijalva said: “Hispanic students are the future of this country and deserve a quality education system that affords them every opportunity to pursue their dreams and succeed.” The priorities address the following topics:

• College affordability;
• Teacher support;
• Oversight of the higher education system; and
• Support of Minority Serving Institutions (MSIs) and diversity in educational fields.

A copy of the press release is found at: https://congressionalhispaniccaucus-castro.house.gov/media-center/press-releases/congressional-hispanic-caucus-releases-higher-education-priorities

FSA releases updates to the FSA Data Center

On Oct. 3, 2019, in an Electronic Announcement, Federal Student Aid (FSA) released a series of updates to the quarterly application, disbursement, and portfolio reports on its FSA Data Center to include data through June 30, 2019. The report disclosed the following:

• The outstanding federal student loan portfolio of $1.48 trillion. The Direct Loan portfolio now represents 82% of the outstanding loan portfolio.
• As of June 30, 2019, 18.5 million FAFSAs were submitted for the 2018-2019 application year, which is a 2.3% decrease compared to the same time period in the prior application cycle. Through June 30, 2019, about 13.2 million applications were submitted for the 2019-2020 application cycle, a 4.3% decrease from the same time period in the prior year.
• Since March 31, 2019, FSA has received about 33,000 new borrower defense applications. Almost 48,000 applications have been approved resulting in almost $535 million in discharges. The total amount discharged and the number of approved and denied applications included in the prior report has not changed as a result of ongoing litigation and the prioritization of the implementation of the 2016 final regulations on borrower defense to repayment.

A copy of the Electronic Announcement is found at: https://ifap.ed.gov/eannouncements/100319FSAPostsNewReportstoFSADataCenter.html

Department of Education is one of the least favorite federal agencies

On Oct. 3, 2019, the Pew Research Center released the results of a survey on the opinions of Americans of various Federal agencies. When asked about the opinions on 16 government agencies, including the Postal Service, the Veterans Affairs Department and the FBI, Americans ranked the Department of Education as one of their least favorite agencies coming in second to Immigration and Customs Enforcement (ICE).

A copy of the survey is found at: https://www.people-press.org/2019/10/01/public-expresses-favorable-views-of-a-number-of-federal-agencies/

Republican Governors send letter of support to expand Pell Grant eligibility to Senate HELP Committee

On Oct. 3, 2019, 12 Republican Governors sent a letter to Chairman of the Senate Health, Education, Labor and Pensions Committee Lamar Alexander (R-TN) and Ranking Member of the HELP Committee Patty Murray (D-WA) that describes their support for expanding Pell Grants to cover “shorter-term, employer-driven programs that provide the opportunities workers need for upskilling and training at the speed of the private sector.”

Key reforms they would like to see made include providing:

• Access for Pell-eligible students to shorter-term, employer-driven programs;
• Expanded Pell eligibility to incarcerated individuals;
• Expanded Pell eligibility for high school students taking postsecondary coursework; and
• Expanded Pell eligibility to adults participating in adult basic education programs.

The expansion of Pell Grants to high school students and to adults participating in adult education programs are proposals included in Chairman Alexander’s recent legislation, the Student Aid Improvement Act (S.2557).

A copy of the letter is available from NCHER at: https://cdn.ymaws.com/www.ncher.us/resource/resmgr/daily_briefing/Alexander_Murray_Pell_Grant_.pdf

A press release from Governor Eric Holcomb from the State of Indiana who led the way for these Pell Grant reforms is found at: https://calendar.in.gov/site/gov/event/holcomb-leads-12-governors-in-support-of-pell-grant-flexibility/

Biden announces his higher education platform

On Oct. 8, 2019, former Vice President and Democratic presidential candidate Joe Biden outlined a $750 billion a year higher education proposal that would make two years of community college free. Former Vice President Biden calls it a “plan for education beyond high school,” rather than a higher education plan. Unlike many of his fellow candidates running for the Democratic nomination for President, the proposal does not call for making four-year colleges free nor does it endorse eliminating federal and private student loan debt.

The Vice President’s plan would:

• Provide $8 billion for infrastructure improvements at community colleges;
• Allow students to use Pell Grants to cover necessities that would hinder them from graduating like housing, child care, transportation and more due to the two-year community college proposal being a “first dollar” plan;
• Double the maximum award for the Pell Grant program;
• Eliminate student loan payments and interest accruable for those borrowers making less than $25,000. For individuals making above $25,000, their payments would be capped at 5% of their income;
• Establish a new federal grant program to support under-resourced four-year schools that serve large numbers of Pell-eligible students; and
• Provide more than $70 billion to HBCUs and other Minority-Serving Institutions.

With regard to for-profit colleges, former Vice President Biden proposes tighter regulations on those colleges to stop them “from profiteering off of students.” Presidential candidate Elizabeth Warren calls for banning such businesses from getting federal money altogether.

The former Vice President’s plans for higher education are clearly more moderate than those of Elizabeth Warren and Bernie Sanders.

A copy of Vice President Biden’s plan for education beyond high school is found at: https://www.politico.com/f/?id=0000016d-ad62-dbde-a17d-ade69c880001

Business groups offer support to Student Aid Improvement Act of 2019

On Oct. 9, 2019, more than 20 representatives of the business community (i.e., IBM, National Association of Home Builders, Associated General Contractors of America) sent a letter to Senate Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander (R-TN) expressing their support of the workforce Pell provisions in S.2557, the Student Aid Improvement Act of 2019. S.2557 would provide Pell Grant eligibility for short-term training opportunities for a period as short as 150 clock hours.

Thirty Attorneys General send letter to Secretary DeVos urging her to exercise her authority to extend the closed school discharge timeframe and to discharge federal student loans for borrowers at schools operated by the Dream Center

On Oct. 17, 2019, 30 State Attorneys General sent a letter to Secretary of Education Betsy DeVos urging her to exercise her authority to extend the closed school discharge timeframe and take immediate action to discharge federal student loans for student borrowers who were enrolled in schools operated by Dream Center Education Holdings, LLC. The letter stated that the “closures prevented students from completing their programs, leaving borrowers with substantial student loan debt and nothing to show for it.”

A copy of the letter is found at: https://www.doj.state.or.us/wp-content/uploads/2019/10/LTR-10172019-to-Sec-DeVos-re-Closed-School-Discharge-DCEH.pdf

Chairman Alexander and Senator Jones introduce stand-alone FAFSA Simplification Act

On Oct. 22, 2019, Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-TN) and Senator Doug Jones (D-AL) introduced S.2667, FAFSA Simplification Act, designed to simplify the FAFSA. S.2667 would reduce the number of questions on the FAFSA from 108 to between 18 and 30 questions and reduce the need for verification.

In a press release, Chairman Alexander said that filling out the FAFSA is “still the biggest impediment to more students enrolling in Tennessee Promise, our state’s free, two-year community college program…” Senator Jones said: “With the reforms Senator Alexander and I are proposing, we hope to fundamentally change this process and make it easier for future students to access funding that will make their dream of attaining a degree possible.”

A copy of the press release is found at: https://www.alexander.senate.gov/public/index.cfm/pressreleases?ID=0B6761B2-6175-4025-9397-56384FE06081

Chairman Scott threatens to subpoena Secretary DeVos for documents related to the Department’s role in making payments to the Dream Center

On Oct. 22, 2019, Congressman Bobby Scott (D-VA), Chairman of the House Committee on Education and Labor, sent a letter to Secretary of Education Betsy DeVos threatening to subpoena documents regarding the Department’s role in the closure of Dream Center Education Holdings. This is the second request. The Committee also released documents suggesting that the Department knowingly made improper and potentially illegal payments to two Dream Center-owned schools that were no longer accredited. Chairman Scott said: “The documents obtained by the Committee reveal that while the Department of Education was working behind the scenes to help Dream Center obtain so-called ‘retroactive accreditation,’ it was doing little to notify students that the school was at serious risk of closing.”

A copy of the press release is found at:
https://edlabor.house.gov/media/press-releases/chairman-scott-threatens-to-subpoena-secretary-devos-for-documents-related-to-departments-role-in-for-profit-school-closure

House Education and Labor Committee Chairman passes College Affordability Act along party lines

On Oct. 31, 2019, House Education and Labor Committee passed H.R. 4674, the College Affordability Act, which aims to lower the costs of college for students and their families by reinvesting in higher education, improving the quality of higher education by holding schools accountable for students’ success, and expanding opportunity for students from all backgrounds. The bill looks similar to H.R. 6543, the Aim Higher Act, which was introduced in last year’s Congress (115), and is estimated to cost as much as $400 billion over the next 10 years. The bill was introduced on Oct. 15, 2019 by Chairman Bobby Scott (D-VA), who said that the bill would “immediately lower the cost of college while putting a down payment on investments that we need to make in the future.”

The bill was approved on a vote of 28 to 22, with Republicans unanimously opposing the bill. Ranking Member Congresswoman Virginia Foxx (R-NC) said of the bill: “The same tired idea of throwing more money into the existing system and hoping that this time things will be different is the very definition of insanity.”

Some of the major provisions of H.R. 4674 include:

• Closes “loopholes” in the current 90/10 rule to increase the amount of non-federal funds required for for-profit institutions to 85/15 and would require institutions to count all federal funds and not just Title IV funds in the calculation.
• Establishes a transparent process for approving conversions from for-profit to non-profit entities.
• Strikes the “student unit record” ban, a provision that prevents the Secretary from collecting student-level data.
• Establishes a unit within the FSA office responsible for reviewing and investigating violations of the Higher Education Act and recommending enforcement actions to the Secretary.
• Focuses accreditation on academic quality and makes the accreditation process more transparent.
• Reassigns certain oversight duties from the accrediting agencies to states (i.e., quality of facilities and equipment; ensuring that applicable programs meet occupational licensure standards).
• Strengthens institutional accountability, while encouraging institutions to improve student outcomes.
• Establishes a new on-time loan repayment metric for accountability.
• Strengthens accountability for short-term programs that access loans by establishing an earnings metric for eligibility.
• Limits marketing expenditures for institutions that spend less than one-third of their revenue on instruction.
• Strengthens the incentive compensation ban by allowing the Secretary to conduct “secret shopping.”
• Bans pre-dispute arbitration and class action ban agreements.
• Prevents the wholesale outsourcing of educational programs.
• Establishes two sets of repayment programs: (1) a tiered standard repayment plan tied to an individual’s total debt amount; and (2) one income driven repayment plan (IBR) plan, which provides for a zero payment when the borrower’s income is below 250 % of the poverty line and complete forgiveness after 20 years.
• Eliminates origination fees on all federal loans.
• Allows student aid eligibility for a student who comes to the U.S. before the age of 16, regardless of his/her immigration status, if he/she has a high school diploma.
• Simplifies the FAFSA by placing applicants into one of three pathways based on certain income and family characteristics.
• Increases the maximum Pell Grant by $500 and indexes future Pell Grant increases to inflation.
• Increases the lifetime Pell Grant limit to 14 semesters up from 12 semesters.
• Allows Pell Grants to be used for post-baccalaureate study at public/private nonprofit institutions if student has remaining lifetime eligibility left.
• Allows short-term Pell Grants for Secretary-approved programs of 150 clock hours and above at public/private nonprofit institutions only.
• Eliminates ban on incarcerated individuals receiving Pell only at public/private nonprofit institutions.
• Provides a bonus to institutions that enroll a high percentage of Pell Grant eligible students and graduate such recipients with bachelor’s degrees in “normal time.”
• Replaces SEOG and FWS formula with a formula based on the number of low-income students at the institution and the unmet need of students at the institution.
• Includes a bonus allocation of FWS funds in the top 20% of institutions based on rates of Pell enrollment and success.

The House Committee on Education and Labor’s announcement on the College Affordability Act, which includes the press release, general fact sheet, and a title by title analysis is found at: https://edlabor.house.gov/media/press-releases/committee-advances-comprehensive-legislation-to-lower-the-cost-of-college.

The Republican leaders on the Committee, Congresswoman Virginia Foxx (R-NC) and Congressman Lloyd Smucker (R-PA) issued a statement criticizing the partisan higher education legislation that will hurt students and double down on failed policies.

A copy of their press release is found at: https://republicans-edlabor.house.gov/news/documentsingle.aspx?DocumentID=406729

H.R.4674 is not likely to be passed in the Republican-controlled Senate or from the Trump administration.

ED issues final regulations on accreditation and state authorization of online providers

On Nov. 1, 2019, the Department of Education published in the Federal Register final regulations on accreditation and state authorization distance education designed to expand educational options for students, lower the cost of higher education, and ensure occupationally-focused education meets current workforce needs.

A copy of the Secretary’s press release, which includes a summary of the rules as well as the text of the final rules is found at: https://www.ed.gov/news/press-releases/secretary-devos-finalizes-higher-education-regulations-promote-innovation-protect-students-and-reduce-regulatory-burden

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.