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Washington News Brief


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

Senator Booker releases higher education plan which focuses on HBCUs

In November 2019, Senator Cory Booker (D-NJ) proposed a $100 billion plan for Historically Black Colleges and Universities (HBCUs) and Minority-Serving Institutions (MSI) as part of his campaign for the Democratic nomination for President. The plan would:

  • Provide $30 billion to Department of Education grants so that HBCUs and MSIs could expand STEM programs and increase recruitment;
  • Provide $30 billion to expand federal grant programs that HBCUs and MSIs could use for infrastructure projects and other capital improvements;
  • Spend at least $40 billion from a separate $400 billion “Moonshot Hub” proposal on climate change to programs based at HBCUs and MSIs;
  • Double the maximum Pell Grants to $12,400 from $6,200 to help low-income students access postsecondary education;
  • Expand the Public Service Loan Forgiveness Program to cancel student loans of workers who enter fields of education, public defense, or the military;
  • Forgive the student loans of low-income students who cannot repay their debts or receive their degrees from failed proprietary institutions; and
  • Be paid-for by repealing the recent corporate tax cuts included in the Tax Cuts and Jobs Act passed in 2017.

Senator Sanders releases higher education plan with new funding for HBCUs

In mid-November 2019, Senator Bernie Sanders (I-VT), Democratic candidate for President, released a new higher education plan, College for All, which includes “historic investments in HBCUs and MSIs to strengthen and support those institutions…” Additional support for HBCUs and MSIs will provide:

  • $1.3 billion to private, nonprofit HBCUs and MSIs per year to eliminate or significantly reduce tuition and fees;
  • $5 billion to create and expand teacher training at HBCUs, MSIs, and tribal colleges and universities to increase educator diversity;
  • $5 billion to create and expand medical and dental provider training programs at HBCUs and MSIs;
  • Designate federal research funds for HBCUs;
  • Double the funding for programs that benefit HBCUs and MSIs authorized under the HEA;
  • Double the funding for GEAR UP and TRIO programs to allow HBCUs to establish these programs at their institutions;
  • $1 billion to HBCU 1890 Land-Grant Institutions programs; and
  • Cancellation of $1.6 billion in existing HBCU debt from the Capital Financing Program authorized under the HEA and $5 billion for capital improvement and infrastructure grants at HBCUs.

Senator Sanders said in announcing his plan: “Historically Black Colleges and Universities have educated generations of African American leaders and helped build and grow the culture of diversity that makes our country what it is today … Unfortunately, too many HBCUs have struggled financially in recent years from a lack of federal resources, a drop-in enrollment, and from crushing institutional debt. Yet the need for HBCUs and the education they provide has never been greater.”

A copy of the plan is found at: https://berniesanders.com/issues/supporting-hbcus-and-msis/

Previously, Senator Sanders introduced S. 1947, the College for All Act of 2019, which includes the following provisions:

  • Eliminates tuition and fees at public four-year colleges and universities for those making up to $125,000 and makes community college tuition- and fee-free-for-all;
  • Cuts student loan interest rates in half;
  • Allows Americans to refinance student loans at the lowest interest rate possible;
  • Prevents the federal government from profiting off of the student loan programs;
  • Ensures students can attend college without taking on massive debt;
  • Eliminates or reduces tuition and fees for low-income students at private colleges and universities that serve historically underrepresented minorities; and
  • Provides funding to eliminate equity gaps in higher education attainment.

The legislation would be paid for by a separate bill to tax stock trades on Wall Street.

A copy of the fact sheet on S. 1947 is found at: https://www.sanders.senate.gov/download/the-college-for-all-act-fact-sheet?id=A2524A5A-CA3F-41F8-8D93-DD10813DC384&download=1&inline=file

ED announces implementation of school notice requirements under the 2016 borrower defense regulations

On Nov. 25, 2019, the Department of Education released an announcement regarding the Nov. 1, 2016 final regulations governing the process for evaluating borrower defense to repayment discharge claims. 34 C.F.R. § 685.222(e)(3)(i) and (f)(2)(iv) provide that ED will notify the school associated with the borrower defense application of the claim filing and give the school the opportunity to submit records or a response to the allegations associated with the application. This provision applies to loans first disbursed before July 1, 2020.

The purpose of the announcement is to alert schools that the Department will soon begin sending notices required under the 2016 regulations. The Department will include in the notice the letter and copy of the application from the borrower, and schools will be invited to respond within 30 days.

A copy of the announcement is found at: https://ifap.ed.gov/eannouncements/112519ImplSchoolNoticeReqUnder2016BorDefenseReg.html

ED will begin issuing automatic closed school loan discharge liability letters to schools

On Nov. 25, 2019, the Department of Education announced that it will begin issuing automatic closed school loan discharge liability letters to affected schools that closed on or after Nov. 1, 2013. The letters will assess school liabilities equal to all loan funds discharged through the automatic closed school discharge process. Schools may request reconsideration no later than 20 days following receipt of the letter with written evidence to show that this determination is unwarranted.

A copy of the announcement is found at: https://ifap.ed.gov/eannouncements/112519LiabilitiesAssocClosedSchoolDischarges.html

ED issues an interim final rule to restart loan forgiveness process for disabled veterans

On Nov. 26, 2019, the Department of Education issued a final interim regulation in the Federal Register, which was issued to amend and update the regulations for total and permanent disability so that it could resume discharging the federal student loans of disabled veterans. The disabled veterans were promised relief under a Presidential Memorandum signed by President Donald Trump on Aug. 21, 2019. Previously, the Department had streamlined the application process, but the application process continued to be an unnecessary hardship for disabled veterans. Under the November 2019 rule, the Secretary will consider a borrower for whom data is obtained from the Department of Veterans Affairs showing that the borrower is “totally and permanently disabled” to be eligible for a loan discharge and will not require further documentation. This action occurred after the Department’s attorneys determined in late October that the process of providing automatic loan forgiveness to severely disabled veterans violated its current regulations. The temporary suspension of the automatic loan forgiveness process affected more than 24,000 disabled veterans.

A copy of the interim final regulations is found at: https://www.govinfo.gov/content/pkg/FR-2019-11-26/pdf/2019-25813.pdf

A copy of the Presidential Memorandum is found at: https://www.whitehouse.gov/presidential-actions/presidential-memorandum-discharging-federal-student-loan-debt-totally-permanently-disabled-veterans/

ED’s OIG releases FY 2020 Annual Plan

In December 2019, the Office of Inspector General released its FY 2020 Annual Plan, which includes a summary of its major plans for next year. The OIG plans to conduct audits and investigations of the following areas:

  • FSA’s transition to the NextGen Financial Services Environment;
  • FSA’s implementation of the NextGen Payment Vehicle Account Program Pilot;
  • FSA’s alignment of goals and performance measures as a performance-based organization and FSA’s processes relating to establishing performance objectives;
  • Schools’ compliance with the requirements for using professional judgement to adjust students’ financial information; and
  • Audits, inspections, and investigations of selected program participants based on referrals and Hotline allegations of fraud, waste, or abuse of Federal funds.

A copy of the FY 2020 Annual Plan is found at: https://www2.ed.gov/about/offices/list/oig/misc/wp2020.pdf

Secretary of Education addresses the FSA Annual Training Conference and calls for FSA to become independent for improved oversight and customer service

On Dec. 3, 2019, Secretary of Education Betsy DeVos addressed the participants in the FSA Training Conference. She thanked the participants for their work in support of students and families. Secretary DeVos described the Department’s efforts to modernize FSA in order to improve its oversight and customer service. She said: “From submitting the FAFSA to submitting payments; from seeing what a loan will cost over time to participating in exit counseling – we are updating everything. And we’re doing it so that students are better informed borrowers. So that students will be able to see what they owe, what ways they can repay, what they owe, and acknowledge all of that each year before they borrow any more. Surprisingly, students will be able to do that for the first time ever. And if they do have questions – we know they do – they will be able to ask Aidan.” Aidan is the new chatbot, a new robotic assistant, who will be able to answer many of the routine questions borrowers have about their loans.

Secretary DeVos indicated that the Department is revamping the way it connects with students. Last year, the initiative was called “NextGen,” but is “NowGen.” She said greater detail will be offered by General Mark Brown, the Chief Operating Officer for FSA. She noted that students would not have to deal with countless websites because there will be one website and there will be one phone number. Students will no longer have to complete their FAFSA at a laptop, but can use any of their devices including the new myStudentAid mobile app.

Secretary DeVos also discussed structural changes at FSA that she believes would improve operations and better serve students, including that FSA become “a standalone entity, wholly and entirely separate from the U.S. Department of Education.” She suggested that such reforms were needed to better manage since the Department has become the largest lender, with more than $1.6 trillion in outstanding loans to 42 million borrowers. She went on to say that the new proposed model for FSA would be “truly independent from interference, political or otherwise.” Secretary DeVos called FSA an “untamed beast.” The model would make it better able to manage the complex federal student loan portfolio and provide better customer service to students and families. She concluded by stating that the concept of a standalone FSA “warrants far more discussion,” adding that “we should be talking about the benefits of professional, experienced leadership who, as in the private sector, would be responsible for setting strategy for FSA, for overseeing the management of the loan portfolio, for ensuring institutions hold up their end of the bargain, and for reporting to Congress.” [Congress would have to change the HEA in order to separate FSA from the Department of Education.]

The full text of Secretary DeVos’ speech is found at: https://www.ed.gov/news/press-releases/secretary-devos-shares-vision-better-stronger-federal-student-aid-annual-training-conference

General Brown describes new online tools for borrowers

On Dec. 3, 2019, following Secretary DeVos’ remarks at the FSA Training Conference, FSA Chief Operating Officer (COO) Mark Brown unveiled the availability of some online tools for student borrowers and financial aid administrators. Two new online tools that will be launched in the next few months include the “Informed Borrower Tool” and “Loan Simulator.” According to General Brown, the first tool will be initially hosted on the MyStudentAid website and integrate information from the recently updated College Scorecard. The “Informed Borrower Tool” will help borrowers “know what they are getting into before they take out their student loans.” The tool will allow students to see how much they have borrowed, preview what their monthly payments might be, and explain concepts such as capitalization and the difference between federal and private loans. General Brown said that for the 2020-2021 award year, both students and parents will have to certify that they have used the tool before receiving their funds. It will likely be rolled out in April 2020.

General Brown said the Loan Simulator will function as an online wizard that will suggest loan options for students based on their “goals and personal information,” and allow them to “test drive and compare personalized scenarios” with regard to repayment. It will also guide students to enroll in the repayment plan they choose.

General Brown also previewed a new online resource for financial aid administrators, the “NextGen PPO,” which will be rolled out at next year’s training conference and was developed with the input from six institutions. He said that the resource will require a one-time sign-in and will feature “real-time FSA interaction.” Financial aid administrators will be allowed to electronically sign-in and upload documents. The interface will include a dashboard with data such as open financial aid cases, the amount of loans disbursed at the institution, the number of students receiving aid at the institution, and the Direct Loans and Pell Grants disbursed and drawn down. “NextGen PPO will be a single gateway for everything financial aid administrators do with federal student aid.”

General Brown provided an overview of a new organizational structure with a principle deputy and four deputies including Robin Minor, who is heading Partner Participation. General Brown also discussed upcoming plans to redesign the Federal Student Aid Handbook and the information on the IFAP website. In addition, FSA plans to create a new training model to allow financial aid administrators more flexibility to take FSA classes. He concluded by indicating his desire to be partners with financial aid administrators who will be able to focus on helping students.

ED releases NPRM for TEACH Grants and faith-based entities

On Dec. 10, 2019, the Department of Education released a Notice of Proposed Rulemaking (NPRM) for the Teacher Education Assistance for College and Higher Education (TEACH Grant Program) and faith-based entities, which resulted from the 2018-2019 negotiated rulemaking. Consensus was reach by the negotiators on all of the topics, and therefore, ED adhered to the consensus regulations. Secretary DeVos said regarding the proposed TEACH Grants: “This proposed rule ensures educators who received TEACH Grants and who are meeting their service requirements do not have grants converted to loans improperly or as a result of confusing bureaucrat paperwork.” In addition, the proposed rules “ensure that individuals and institutions are not forced to choose between upholding their deeply-held faith or participating in federal funding programs.” Comments are due by Jan. 10, 2020 and the Department expects to finalize the rule by Nov. 1, 2020, meaning that the provisions would become effective July 1, 2021 unless the Secretary exercises her authority to permit early implementation.

A copy of the Secretary’s press release is found at:

A copy of the NPRM is found at: https://ifap.ed.gov/fregisters/attachments/FR121119.pdf

Secretary approves new methodology for providing student loan relief assessing BDR claims

On Dec. 10, 2019, the Secretary of Education announced the Department has implemented a new methodology for assessing borrower defense to repayment (BDR) claims. Under the new methodology, the Department would calculate the amount of debt relief based on a student’s estimated earnings utilizing earnings from the publicly available 2017 gainful employment earnings data, Social Security Administration earnings, College Scorecard data, and Internal Revenue Service information. A comparison of the median earnings of graduates who have made BDR claims to the median earnings of graduates from comparable programs will determine the amount of student loan relief that students will receive.

According to the announcement, hundreds of claims adjudicated utilizing the new methodology, mostly Corinthian and ITT borrowers, will be released. FSA will also notify borrowers that their loans are ineligible for relief under the 2016 BDR regulation.

House and Senate Democrats were critical of the methodology where borrowers would not obtain full relief. Chairman of the House Education and Labor Committee Bobby Scott (D-VA) said that the Department should provide full relief to defrauded borrowers rather than “inventing another scheme to provide students less relief than the law allows.” Ranking Member of the Senate Health, Education, Labor and Pensions (HELP) Committee Patty Murray (D-WA) agreed and said that “If a student has been cheated or defrauded by their college, they should get their money back, plain and simple…”

A copy of the Secretary’s press release is found at: https://www.ed.gov/news/press-releases/secretary-devos-approves-new-methodology-providing-student-loan-relief-borrower-defense-applicants

A copy of Chairman Scott’s press release is found at: https://edlabor.house.gov/media/press-releases/scott-statement-on-department-of-educations-new-formula-for-denying-defrauded-borrowers-full-debt-relief

A copy of Ranking Member Murray’s press release is found at:

House Education Committee holds hearing on borrower defense to repayment

On Dec. 12, 2019, the House Education and Labor Committee held a hearing titled, “Examining the Education Department’s Implementation of Borrower Defense,” with Department of Education Secretary of Education Betsy DeVos as the sole witness. Newspaper reports of the hearing indicated that the exchanges between the Secretary and the Democrats were “testy,” with the Secretary testifying that the Department was working to address many of the borrower defense to repayment claims and the Democrats alleging that the methodology for calculating the amount of debt relief was flawed.

Chairman of the House Education Committee Bobby Scott (D-VA) said: “While the Department has been searching for a legal method of shortchanging defrauded borrowers, those defrauded borrowers have been left with mountains of debt, worthless degrees, and none of the job opportunities they were promised.” Ranking Member Virginia Foxx (R-NC) said that “Secretary DeVos and the Education Department are committed to providing relief to students who have been harmed by fraudulent practices and are reforming the borrower defense to repayment rule to both clarify standards and make the process more accessible.”

A copy of House Chairman Bobby Scott’s opening statement is found at: https://edlabor.house.gov/imo/media/doc/RCBS%20OS%201212191.pdf

A copy of Ranking Member Foxx’s opening statement is found at: https://republicans-edlabor.house.gov/news/documentsingle.aspx?DocumentID=406792

Department earns A+ for technology modernization

On Dec. 16, 2019, Secretary of Education Betsy DeVos issued a press release announcing that the Department of Education has earned an A+ from the House Committee on Oversight and Reform for its work to modernize and secure its information technology systems. The high grade was earned on the December 2019 Federal Information Technology Acquisition Reform Act (FITARA) scorecard. The Department received high marks in five of the seven categories, including transparency and risk management, software licensing, agency CIO authority enhancements, portfolio review, and data center optimization initiative. Just four years ago, the Department scored an F. The FITARA scorecard, issued biannually, uses data from the Government Accountability Office (GAO) to make its determinations.

A copy of the press release is found at: https://www.ed.gov/news/press-releases/department-education-earns-technology-modernization

Department announces recovery assistance for students and schools impacted by natural disasters

On Dec. 19, 2019, Secretary of Education Betsy DeVos announced new federal assistance for students and schools in 13 states and the Commonwealth of the Northern Mariana Islands impacted by Hurricanes Florence and Michael, Typhoon Mangkhut, Super Typhoon Yutu and other natural disasters in 2018 and 2019. The $155 million in grant funds will be used to aid a variety of education-related disaster recovery efforts.

A copy of the press release is found at: https://www.ed.gov/news/press-releases/department-education-announces-recovery-assistance-students-schools-impacted-natural-disasters

President signs into law the Future Act

On Dec. 19, 2019, President Trump signed into law, H.R. 5363, the Fostering Undergraduate Talent by Unlocking Resources for Education Act (Future Act). H.R. 5363 passed the U.S. Senate by unanimous consent on Dec. 10, 2019. Earlier on Dec. 10, 2019, the U.S. House of Representatives passed H.R. 5363, by a vote of 319-96. The House-passed bill is similar to the bill passed by the Senate in the previous week, although it includes more prescriptive language added by the House Ways and Means Committee on when the Internal Revenue Service (IRS) can share taxpayer information for non-tax purposes, which Senate Health, Education, Labor and Pensions (HELP) Committee Chair Lamar Alexander (R-TN) and Ranking Member Senator Patty Murray (D-WA) helped to negotiate.

Chairman Alexander said that President Trump and Congress have delivered a Christmas present for millions of students and families after President Trump signed the bipartisan bill into law.

On Dec. 5, 2019, the Senate passed an amendment to the FUTURE Act, which would permanently extend federal funding for Historically Black Colleges and Universities (HBCUs) and Minority Serving Institutions (MSIs) and allow the IRS to share taxpayer information with the Department of Education in order to simplify the Free Application for Federal Student Aid (FAFSA) and streamline income-driven repayment plans for students and their families. The amended bill was the result of a bipartisan agreement between the Senate HELP Committee Chairman Alexander and Ranking Member Murray, along with Senators Tim Scott (R-SC), Doug Jones (D-AL), Richard Burr (R-NC), and Chris Coons (D-DE). The agreement would offset the costs of the permanent HBCU-MSI funding with the passage of the FAFSA Act. The FUTURE Act passed by unanimous consent and is now on its way to the House of Representatives for consideration.

The bill was an amendment to the House-passed FUTURE Act on Sept. 17, 2019, which would extend the annual funding for MSIs for just two years. The Senate version would provide a permanent funding stream to support STEM education at MSIs. Senate leaders determined that they could pay for permanent MSI funding with $2.8 billion in annual savings from improved accuracy in the federal student aid programs as a result of the direct data sharing between IRS and the Department of Education, that would lead to reduced improper payment plans and reduced risk of fraud in income-driven repayment (IDR) from self-certified income.

The FUTURE Act would:

  • Permanently reauthorize and provide $255 million in annual mandatory funding for Historically Black Colleges and Universities and other Minority Serving Institutions;
  • Be fully paid for by including the FAFSA Act, which passed the Senate unanimously last year, and which:
    • Allows providing tax information only once – Students do not have to give their tax information to the federal government twice;
    • Eliminates up to 22 questions – Students give permission to the Department of Education to request tax return data already given to the Internal Revenue Service, which reduces the 108 questions on the FAFSA by up to 22 questions;
    • Eliminates the verification nightmare – For most students, the bill eliminates so-called “verification,” which is a bureaucratic nightmare that 5.5 million students must go through annually to make sure the information they gave to the U.S. Department of Education is exactly the same as they gave to the IRS;
    • Eliminates $6 billion in mistakes – According to the U.S. Department of Education, helps taxpayers by eliminating up to $6 billion each year in mistakes (both overpayments and underpayments) in Pell grants and student loans;
    • Enables 7 million applicants who are currently unable to access their IRS data for their FAFSA to verify that they do not file taxes without requesting separate documentation from the IRS; and
    • Streamlines income-driven repayment by eliminating burdensome annual paperwork for 7.7 million federal student loan borrowers on income-driven plans.

Chairman Alexander said about the bill: “First, it provides permanent funding for HBCUs and other Minority-Serving Institutions attended by over 2 million minority students. Second, it takes a big first step in simplifying the FAFSA for 20 million families, including 8 million minority students, and eliminating the bureaucratic nightmare created by requiring students to give the federal government the same information twice.”

A copy of Senator Alexander’s press release is found at: https://www.alexander.senate.gov/public/index.cfm/pressreleases?ID=8D71256C-C3D3-4EA4-A3D6-E017FD7AE21F

A copy of Senator Alexander’s press release on the FAFSA changes is found at: https://www.alexander.senate.gov/public/index.cfm/pressreleases?ID=B7971BF7-252A-424A-971F-30C2620F75BA

Chairman of the House Education and Labor Committee Bobby Scott (D-VA) said on the House Floor and in a press release:

“Unfortunately, despite their outsized role in serving our nation’s most underserved students, these schools have historically been under-resourced compared to other institutions of higher education.

“Now, after careful negotiation and compromise, the bill we are voting on today does not just guarantee more than $250 million per year for HBCUs and MSIs, it simplifies the Free Application for Student Aid, or FAFSA, and makes it easier for students to access student aid and repay their loans. I would like to give special thanks to Chairman Neal for his dedication and hard work in negotiating to bring this legislation to the floor.”

A copy of Congressman Scott’s press release is found at: https://bobbyscott.house.gov/media-center/press-releases/scott-praises-passage-of-future-act

In a Dec. 11, 2019 press release, Senate HELP Chairman Alexander said:

“First, this legislation provides permanent funding, fully paid for, for Historically Black Colleges and Universities and other Minority Serving Institutions attended by over 2 million minority students. Second, after five years of bipartisan effort, this simplification of the FAFSA removes a huge roadblock for the millions of Americans who apply for federal grants and loans to attend college.”

A copy of Senator Alexander’s press release is found at: https://www.alexander.senate.gov/public/index.cfm/pressreleases?ID=BA15A331-D8D3-4A58-84F4-0E9F7D2FE6C0

Secretary of Education Betsy DeVos released a statement praising the enactment of the Future Act. Secretary DeVos said: “From eliminating up to 22 questions on the FAFSA form to reducing burdensome verification paperwork, applying for and receiving student aid will now be easier, faster and more secure than ever. Importantly, this law ensures students will not have to provide the government the same information twice, which also protects taxpayers from improper payments.”

A copy of the Secretary’s press release is found at: https://www.ed.gov/news/press-releases/secretary-devos-praises-higher-education-reforms-signed-law-simplify-fafsa-provide-consistent-funding-hbcus

Trump signs into law budget agreement for FY 2020, which Includes Labor, Health and Human Services (HHS), Education, and Related Agencies Appropriations Act

On Dec. 20, 2019, President Trump signed into law a bill finalizing funding for the government for FY 2020. On Dec. 17, 2019, the U.S. House of Representatives passed H.R. 1865, the Further Consolidated Appropriations Act, which includes the Labor, Health and Human Services (HHS), Education, and Related Agencies Appropriations Act for FY 2020. The vote was 297-120. On Dec. 19, 2019, the U.S. Senate passed H.R. 1865, by a vote of 71 to 23.

Some of the major provisions of H.R. 1865 include the following:

  • Provides $24.5 billion for federal student aid programs, $75 million above the 2019 enacted level. The funding supports a maximum Pell Grant of $6,345, an increase of $150 over last year; $865 million for the Federal Supplemental Educational Opportunity Grant program, an increase of $25 million above the 2019 enacted level; and $1.2 billion for Federal Work Study, an increase of $50 million above the 2019 enacted level. [We should expect the Department to publish the Pell Grant schedules no later than February 1, 2020.]
  • Provides almost $1.8 billion for student aid administration, including funding for student loan servicing and implementation of FSA’s Next Generation Financial Services Environment.
  • Allows the Secretary to waive the cohort default rate provisions for an institution of higher education that offers an associate’s degree, is a public institution, is located in an economically distressed county, and was impacted by Hurricane Matthew.
  • Provides $2.3 million to conduct outreach to borrowers who may qualify for the Public Service Loan Forgiveness Program (PSLF) and includes $50 million to implement the second year of the Temporary PSLF Program for those borrowers that would qualify for the program if not for the fact that they are enrolled in graduated or extended repayment plans.
  • Requires the Department to provide a report to Congress on steps taken to improve information to students who are eligible for total and permanent disability discharges of federal student loans or service obligations, and a report on the implementation of the data matching system with the U.S. Department of Veterans Affairs to facilitate the discharge of student loans for veterans with total and permanent disabilities.
  • Provides in the bill report language to support the data-sharing agreement between the Department and the Internal Revenue Service included in the Future Act. [See below for more on the Future Act.]
  • Provides new language to protect federal student loan borrowers by directing the Department to “hold servicers accountable for high-quality outcomes, noncompliance with FSA guidelines, contract requirements (e.g., an understanding of federal and state law), and applicable laws, including misinformation provided to borrowers.”

The bill also includes the following:

  • Repeals the language within the Tax Cuts and Jobs Act of 2017 (TCJA) related to what is known as the “kiddie tax.” According to the American Council on Education (ACE), the tax can “inadvertently cause harm to many low- and middle-income students who rely on scholarship aid to pay for their college education” by increasing the tax rates for those funds.
  • Allows students to use up to $10,000 from their 529 education accounts to pay down their student debt.

A summary of the bipartisan budget agreement released by the House is found at: https://appropriations.house.gov/news/press-releases/house-to-consider-domestic-priorities-and-international-assistance

A copy of the press release released by the Senate Appropriations Committee is found at: https://www.appropriations.senate.gov/news/shelby-applauds-bipartisan-cooperation-encourages-colleagues-to-support-fy20-spending-packages-to-fully-fund-govt

Durban and Takano and seven other colleagues send letter to Secretary of Veteran Affairs urging the VA to protect veterans

On Dec. 20, 2019, Senator Dick Durbin (D-IL) and Congressman Mark Takano (D-CA), along with Senators Jack Reed (D-RI), Sherrod Brown (D-OH), Richard Blumenthal (D-CT), and Elizabeth Warren (D-MA) and Representatives Susan Davis (D-CA), Mike Levin (D-CA), and Katie Porter (D-CA ), sent a letter to Secretary of Veteran Affairs Robert Wilkie urging the Department of Veteran Affairs to protect veteran students in light of the recent Federal Trade Commission (FTC) settlements with two for-profit institutions for unfair, deceptive, and abusive practices.

A copy of the press release, including the text of the letter, is found at: https://www.durbin.senate.gov/newsroom/press-releases/durbin-takano-va-must-protect-veteran-students-in-wake-of-ftc-settlements-with-for-profit-colleges

Senator Mike Enzi introduces bill to expand 90/10 rule to all colleges and universities

On Dec. 20, 2019, Senator Mike Enzi (R-WY) announced that he had introduced legislation during the week that would ensure that “colleges and universities are evaluated using the same standards and regulations.” Senator Enzi’s bill would apply the 90/10 rule to all institutions of higher education. Currently the 90/10 rule requires for-profit institutions to receive no more than 90 percent of their revenue from federally-funded student aid. If the colleges are not in compliance, they could become ineligible to receive federal student aid.

A copy of Senator Enzi’s press release is found at: https://www.enzi.senate.gov/public/index.cfm/news-releases?ID=F5C91A5E-572D-4123-8D26-F80121833FDF

ED announces meeting of the higher education triad

On Dec. 23, 2019, emails were sent on behalf of the Secretary of Education Betsy DeVos to members of the triad announcing a meeting of the higher education regulatory triad to be held on Jan. 29, 2019. The goal of the meeting is to discuss potential solutions to concerns shared about institutions and students. The discussion will include a review of recent changes in the Department’s rules on accreditation and state authorization. Also included are discussions on ways to better identify and monitor financially fragile institutions, to support innovation in higher education, and to navigate school closures in ways that best meet the needs of affected students.

Department announces launch of federal student aid information hub for students and borrowers

On Dec. 23, 2019, Secretary of Education Betsy DeVos announced the debut of a new, centralized hub for customers to access student aid information. The new StudentAid.gov is now the singular place where students, parents, and borrowers can learn about types of student aid, find the right repayment plan, complete loan counseling, and complete the FAFSA form. Borrowers can now access all the loan servicer contact centers through one phone number: 1-800-4-FED-AID. Secretary DeVos also announced that Aidan, FSA’s new digital assistant, is also making its debut. Aidan, a new chatbot, can already answer more than 800 questions about federal student aid and is learning more from feedback submitted by users during a pilot program.

Secretary DeVos said: “By centralizing the information they need on one website, providing one singular phone number to call, and continually improving our mobile app, we can better serve students and cut down on the confusion of navigating the federal student aid process.”

A copy of the press release is found at: https://www.ed.gov/news/press-releases/secretary-devos-delivers-promise-launch-centralized-federal-student-aid-information-hub-students-borrowers

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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