Washington News Brief

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

Scott and Murray urge Secretary of Education to delay the proposed rule on distance education

House Education Chairman Bobby Scott (D-VA) and Health, Education, Labor and Pensions (HELP) Committee Ranking Member Patty Murray (D-WA) sent a letter to the Secretary of Education urging her to delay the proposed rule on distance education in light of students and schools that are adapting to virtual classrooms as a result of the COVID-19 pandemic. The letter said that the history of fraud and abuse in distance education programs and the massive shift to online classes in response to COVID-19 has made this a particularly problematic time to make changes that could weaken accountability for distance education. The letter said: “The rapid expansion of distance education by institutions of higher education as a response to the coronavirus (COVID-19) pandemic calls for greater rather than less oversight.”

A copy of the letter is found at: https://edlabor.house.gov/imo/media/doc/House,%20Senate%20Democrats%20Warn%20DeVos%20Against%20Changing%20Distance%20Learning%20Rules%20Amid%20COVID-19%20Pandemic.pdf

Senate Democrats criticize Secretary of Education for her decision not to fund DACA students

On April 27, 2020, Senate Democrats, led by Senators Michael Bennett (D-CO) and Bob Menendez (D-NJ), sent a letter to Secretary of Education Betsy DeVos criticizing her for the recent decision to prohibit emergency financial aid grants included in the CARES Act from going toward students enrolled in the Deferred Action of Childhood Arrivals (DACA) program. The letter said that there was no explicit limitation on which students could receive the new grants and that thousands of DACA students should be eligible for the aid.

A similar letter was sent by House Democrats, led by Congressman Eric Swalwell (D-CA), on April 27, 2020, urging Secretary DeVos to reverse the DACA restrictions. The letter said that the Secretary should allow DACA students to receive the emergency financial aid grants. “In this extraordinary time, we should not be dividing students based on immigration status or unduly limiting aid.”

A copy of the Senate Democrats’ letter is found at: https://cdn.ymaws.com/www.ncher.us/resource/resmgr/daily_briefing/db2020/Senate_letter.pdf

A copy of the House Democrats’ letter is found at: https://cdn.ymaws.com/www.ncher.us/resource/resmgr/daily_briefing/db2020/house_letter.pdf

President signs Student Veteran Coronavirus Response Act into law

On April 28, 2020, the President signed into law H.R. 6322, the Student Veteran Coronavirus Response Act. H.R. 6322 allow student veterans to continue receiving certain housing, education, and work study benefits provided through the Department of Veterans Affairs that would otherwise be reduced or halted because classes were disrupted due to COVID-19. The bill passed the House on March 31, 2020, and the Senate on April 21, 2020.

House Veterans Affairs Committee Chairman Mark Takana (D-CA), who sponsored the bill, said: “As the nation faces the COVID-19 pandemic, no student veteran should have to worry about losing income from work study jobs, interrupting their studies, or unexpected bills when their schools close.”

A copy of the press release from Chairman Takana is found at:
https://takano.house.gov/newsroom/press-releases/chairman-mark-takanos-gi-bill-fix-for-student-veterans-impacted-by-covid-19-passes-senate

Congressman Harder urges ED to allow families to update FAFSA

On April 29, 2020, Congressman Josh Harder (D-CA) sent a letter to the Department of Education urging the Secretary of Education Betsy DeVos to allow students to update their family’s financial information on the FAFSA in light of the financial hardship that students and their families may be experiencing as a result of COVID-19. Congressman Harder said that he believes that the FAFSA applications are outdated and do not reflect current financial situations.

He asked the Department to provide more information and transparency around the professional judgement process that financial aid professionals can use to make necessary adjustments to a student’s FAFSA application in order to accurately calculate an Expected Family Contribution (EFC).

A copy of the Congressman’s letter is found at: https://harder.house.gov/sites/harder.house.gov/files/FAFSA%20Letter%20Final%204.29.pdf

ED announces progress on Next Gen FSA initiative and StudentAid.gov website

On April 29, 2020, the Department of Education released an electronic announcement summarizing the progress on the Next Gen FSA initiative and StudentAid.gov. The updated features are as follows:

• Annual Student Loan Acknowledgement: In this feature, student and parent borrowers can view how much they currently owe in federal loans, see their progress toward their aggregate loan and grant limits, receive helpful tips on smart borrowing, and acknowledge that they have reviewed their information. While available since April 26, 2020, the Acknowledgement is not required for loans disbursed for the 2020-2021 award year.
• Feedback Center: This feature has been integrated with StudentAid.gov and permits customers to submit a complaint and provide positive feedback.
• Status Center: This feature permits authenticated customers to review the status of their submitted feedback cases.
• Loan Simulator Enhancements: This feature, which initially launched in February 2020, has been enhanced to include additional functionality. Customers can evaluate their payment options. Recently, two new repayment goals have been added that allow borrowers to choose if they want to payoff their debt by a specific date or specify their monthly payment amount.
• Direct Loan Master Promissory Note (MPN) Updates: The MPN has been updated to align with the overall design of the StudentAid.gov website.
• FSA ID Enhancements: Customers who create an account (FSA ID) are now directed to a landing page that provides information on who should create an account and what information is needed.
• Notification Center Enhancements: The Center was updated to provide customers with the ability to see their notification history, view unread notifications, and dismiss notifications. Notifications were added for income-driven repayment plan recertification, aid overpayment, and TEACH Grant reconsideration.

A copy of the electronic announcement is found at: https://ifap.ed.gov/electronic-announcements/042920nextgenfsaaddstudentaidgovwebstartapril2020

ED provides almost $1.4 billion in additional funding for Minority Serving Institutions (MSIs)

On April 30, 2020, Secretary of Education Betsy DeVos announced that almost $1.4 billion in additional funding directed toward Minority Serving Institutions (MSIs), including Historically Black Colleges and Universities (HBCUs) and Tribally Controlled Colleges and Universities (TCCUs), as well as institutions serving low-income students to help ensure learning continues during the coronavirus national emergency. The funding is part of the Higher Education Emergency Relief Fund (HEERF) authorized by the CARES Act.

A copy of the press relief is found at: https://www.ed.gov/news/press-releases/secretary-devos-delivers-nearly-14-billion-additional-cares-act-relief-funds-hbcus-minority-serving-institutions-and-colleges-and-universities-serving-low-income-students

IG releases its COVID-19 oversight plan

In May 2020, the Department of Education’s Office of Inspector General (OIG) released its “Coronavirus Relief Oversight Plan,” which will be used to provide oversight over the Department’s implementation of the CARES Act. According to the Plan, the IG will audit Department and grantee management and spending of the funds, examine the effectiveness of the relief programs, and investigate misuse, theft, and other criminal activity involving the funds. The Plan states that the IG will examine the Department’s monitoring and schools’ use of funds from the Higher Education Emergency Relief Fund, particularly the obligation to use 50% of funds for grants to students; the Department’s implementation of requirements to adjust subsidized loan and Pell Grant usage for periods that students do not complete due to a qualifying emergency; and the Department’s process to cancel the borrower obligations to repay Federal Direct Loans associated with a period where the student withdrew as a result of a qualifying emergency. It also states that it will examine FSA’s implementation of the suspension of involuntary collections on defaulted student loans; FSA’s use of the $40 million made available for federal student loan servicing; and the Department’s use of authority to compensate contractors to pay employees assigned to federal contracts who would not work because of the COVID-19 pandemic.

A copy of the OIG Oversight Plan is found at: https://cdn.ymaws.com/www.ncher.us/resource/resmgr/daily_briefing/db2020/DOECARESActOversightPlan.pdf

Murray and DeLauro urge Secretary of Education to reverse guidance preventing DACA students from receiving CARES Act funds

On May 1, 2020, Senate Health, Education, Labor and Pensions (HELP) Committee Ranking Member Patty Murray (D-WA) and House Appropriations Subcommittee on Labor, Health and Human Services, and Education Chairwoman Rosa DeLauro (D-CT) sent a letter to Secretary of Education Betsy DeVos urging her to reverse recent guidance preventing institutions from using the CARES Act funds for students in the Deferred Action for Childhood Arrivals (DACA) program. The letter said that the “harmful and unauthorized guidance … will restrict more than 7.5 million students from accessing sorely needed emergency financial aid provided under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act),” and that the barriers do not exist in the law and will prevent aid from reaching students that Congress intended to support.

A copy of the letter is found at: https://www.help.senate.gov/imo/media/doc/CARES%20Emergency%20Financial%20Aid%20Restrictions%20Response%20FINAL.pdf

House and Senate Democrats introduce bill providing full student loan discharges to borrowers that attended Corinthian Colleges and ITT Tech

On May 4, 2020, House and Senate Democrats, led by Senators Dick Durbin (D-IL), Sherrod Brown (D-OH), and Elizabeth Warren (D-MA) and Representative Mark Takano (D-CA) and Pramila Jayapal (D-WA), introduced the Coronavirus Emergency Borrower Defense Act, which would provide full student loan discharges to borrowers that attended Corinthian Colleges and ITT Tech as well as borrowers that filed state attorneys general group discharge applications. The bills would require eligible loans to be discharged within 30 days of enactment and would provide timelines for the U.S. Department of Education to take other steps such as correcting borrowers credit reports.

A copy of Senator Durbin’s press release is found at: https://www.durbin.senate.gov/newsroom/press-releases/durbin-takano-brown-jayapal-warren-unveil-plan-to-grant-full-student-loan-discharges-to-defrauded-student-borrowers-in-next-covid-19-relief-package

Department announces that colleges need to publicly disclose how they spend COVID-19 funds

On May 6, 2020, the Department of Education released an electronic announcement providing guidance requiring institutions of higher education to publicly disclose how they are spending the emergency financial aid grants to students. The electronic announcement directs institutions that applied for funds from the Higher Education Emergency Relief Fund (HEERF) to submit an initial report to the Secretary 30 days from the date of the institution’s Certification and Agreement to the Department. The announcement said that the instructions about sending the information to the Secretary will be provided soon.

The electronic announcement states that institutions must provide specific information in a format and location that is easily accessible to the public 30 days after the date the institution received its allocation and updated every 45 days thereafter. The disclosure must include:

• An acknowledgement that the institution signed and submitted to the Department the Certification and Agreement and assurance that the institution used or intends to use no less than 50% of the funds received under Section 18004(a)(1) of the CARES Act to provide Emergency Financial Aid Grants to students.
• The total amount of funds that the institution will receive or has received from the Department.
• The total amount of Emergency Financial Aid Grants distributed to students as of the date of submission of the report.
• The estimated total number of students at the institution eligible to participate under Section 484 in Title IV of the HEA and thus eligible for the Emergency Financial Aid Grants to students.
• The total number of students who have received Emergency Financial Aid Grants to students.
• The method used by the institution to determine which students receive Emergency Financial Aid Grants.
• Any instructions, directions, or guidance provided by the institution to students concerning the Emergency Financial Aid Grants.

A copy of the electronic announcement is found at: https://ifap.ed.gov/electronic-announcements/050620HigherEdEmergencyReliefFundRptg

IRS announces that emergency aid to students is not taxable

On May 7, 2020, the Treasury Department released guidance on the taxability of emergency grant funding provided to students through the CARES Act. In a FAQ document, the Internal Revenue Service (IRS) stated: “Emergency financial aid grants under the CARES Act for unexpected expenses, unmet financial need, or expenses related to the disruption of campus operations on account of the COVID-19 pandemic…are qualified disaster relief payments under section 139 of the Internal Revenue Code. This grant is not includable in your gross income.”

A copy of the FAQ document is found at: https://www.irs.gov/newsroom/faqs-higher-education-emergency-relief-fund-and-emergency-financial-aid-grants-under-the-cares-act

OCR issues FAQs on meeting civil rights obligations in distance learning

On May 12, 2020, the Department of Education’s Office of Civil Rights issued Frequently Asked Questions (FAQs) addressing civil rights obligations during the COVID-19 crisis. The FAQs remind institutions that institutions that provide distance learning must continue to comply with Federal disability laws.

A copy of the FAQs is found at: https://www2.ed.gov/about/offices/list/ocr/docs/20200512-qa-psi-covid-19.pdf

ED issues additional COVID-19 guidance

On May 15, 2020, the Department of Education issued an electronic announcement detailing additional COVID-19 regulatory flexibilities, including those related to return of Title IV funds, leaves of absences, satisfactory academic progress, and audit deadline extensions.

A copy of the electronic announcement is found at: https://ifap.ed.gov/electronic-announcements/051520UPDATEDGuidanceInterruptStudyRelCOVID19May2020

ED issues interest rates for Direct Loans first disbursed between July 1, 2020, and June 30, 2021

On May 15, 2020, the Department of Education issued an electronic announcement with the interest rates for Direct Loans first disbursed between July 1, 2020, and June 30, 2021, as follows:

• Direct Subsidized and Unsubsidized Loans for Undergraduate Students – 2.75%
• Direct Unsubsidized Loans for Graduate and Professional Students – 4.3%
• Direct PLUS Loans for Parents of Dependent Undergraduate Students and for Graduate and Professional Students – 5.3%

A copy of the electronic announcement is found at: https://ifap.ed.gov/electronic-announcements/051520InterRatesforDLFirstDisbBetw070120and063021

House passes HEROES Act

On May 15, 2020, the House of Representatives passed H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, the fourth legislative package geared toward addressing the COVID-19 crisis, by a vote 208 – 199, with Congressman Peter King (R-NY) the only Republican to support the bill and 14 Democrats opposing the legislation. The bill now goes to the Senate, but Senate Majority Leader Mitch McConnell (R-KY) has said that he does not anticipate putting together another COVID-19 bill until after Memorial Day.

The $3 trillion bill directs more than $37 billion to higher education institutions. The HEROES Act would establish $90 billion for a State Fiscal Stabilization Fund, and 30% or $27 billion must go to public institutions, which will be distributed to the governors. Another $10.15 billion will go directly to institutions, including $1.7 billion for Minority-Serving Institutions, $7 billion for private nonprofit institutions, and $1.4 billion for public and nonprofit institutions with unmet need, including those that operate 100% online.

Other provisions include:

• The bill would prohibit the Secretary from imposing any student eligibility restrictions on the Higher Education Emergency Relief Fund (HEERF), which would be retroactive to March 27, 2020. The bill also clarifies that the 1996 welfare reform bill, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, does not apply. Therefore, all students, including DACA students, would be eligible for funds from the HEERF.
• The bill would expand the eligible use of the funds from the institutional HEERF grants to those expenses associated with significant changes to the delivery of instruction “to defray the expenses (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, payroll) incurred by institutions of higher education.”
• The bill also would cancel the lesser of the borrower’s total federal student loan balance, or $10,000, within 30 days of the bill’s passage, for those borrowers who were economically distressed on March 12, 2020.
• The bill would pause a student’s loan payments and interest accrual through September 30, 2021, a year longer than was included in the previous relief package.
• The bill retroactively extends the CARES Act borrower relief provisions, including the suspension of monthly payments and interest accrual, to borrowers with Perkins Loans, commercially-held Federal Family Education Loans (FFEL), and health professions loans offered by the Department of Health and Human Services.
• The bill would clarify that all forms of grants, including state, institutional, and private grants, would not be considered taxable income.
• The bill would waive the non-federal share requirements for nonprofit Federal Work-Study employers for 2019-2020 and 2020-2021.
• The bill would ensure that emergency financial aid grants are not treated as income or assets (including untaxed income and benefits) in the calculation of expected family contribution.

A summary of the bill is found at: https://cdn.ymaws.com/www.ncher.us/resource/resmgr/daily_briefing/db2020/HEROSAct.pdf

A copy of the text of the bill is found at: https://cdn.ymaws.com/www.ncher.us/resource/resmgr/daily_briefing/db2020/download__1_.pdf

Chairman of the House Committee on Education and Labor Bobby Scott (D-VA) issued a press release that said: “The Heroes Act dedicates nearly $1 trillion in emergency relief to help states and local government avert devastating cuts, particularly to education, public safety, and basic services. It also delivers $100 billion in direct education funding to address the unique challenges created by the pandemic. In K-12, funding would be available for technology, summer programs, special education, and initiatives to reduce the achievement gaps. In higher education, funds would be used to support both students and their institutions.”

A copy of Chairman Scott’s press release is found at: https://edlabor.house.gov/media/press-releases/chairman-scott-statement-on-house-passage-of-the-heroes-act.

Ranking Member of the House Committee on Education and Labor Virginia Foxx (R-NC) issued a press release that said: “House Democrats and Speaker Pelosi are using this global health pandemic to appease the extreme left instead of putting the American people first. They are truly living up to their own words: ‘never let a crisis go to waste’ and it is shameful.”

A copy of Ranking Member Foxx’s press release is found at: https://republicans-edlabor.house.gov/news/documentsingle.aspx?DocumentID=406953

Veterans Education Success releases fact sheet saying student veterans may not be eligible for CARES Act funding

Veterans Education Success released a fact sheet that concluded if the Department of Education maintains its guidance restricting emergency financial aid grants to students eligible for Title IV aid, colleges could interpret this to exclude student veterans. Since most institutions would award emergency financial aid grants to those who submitted a FAFSA, the fact sheet concludes that many student veterans who receive their aid through the Veteran’s Affairs Administration, are not likely to file a FAFSA and would be ineligible.

A copy of the Fact Sheet is found at: https://vetsedsuccess.org/are-student-veterans-going-to-be-denied-access-to-cares-act-emergency-relief-funds/

House Education Committee Chairman Scott seeks information from ED on wage garnishment

On May 19, 2020, House Education and Labor Committee Chairman Bobby Scott (D-VA) sent a letter to Secretary of Education Betsy DeVos requesting information from the Department of Education regarding the continued garnishment of wages from student loan borrowers. Chairman Scott said that employers indicated that they could not stop garnishing wages because they did not receive a letter from the Department directing them to stop garnishing wages, even though a prohibition on such activity was included in the Coronavirus Aid, Relief, and Economic Security (CARES Act). Chairman Scott said: “The fact that, in the wake of a national emergency, the Department continues to unlawfully collect on borrowers’ loans, indicates its process is broken and that these issues are systemic and pervasive. The committee urges the Department to immediately take every step necessary to stop illegal wage garnishment for all student borrowers and provide immediate refunds to those who have been subject to such garnishment.”

A copy of Chairman Scott’s press release is found at: https://edlabor.house.gov/imo/media/doc/2020.05.19%20RCS%20Ltr%20to%20ED%20Re%20illegal%20wage%20garnishment.pdf

Department issues final Title IX rule

On May 19, 2020, the Department of Education published the final Title IX rule in the Federal Register. The effective date is Aug. 14, 2020. The Notice of Proposed Rulemaking (NPRM) received over 124,000 comments. Some of the key provisions included in the final rule are:

• Define sexual harassment to include sexual assault, dating violence, domestic violence, and stalking, as unlawful discrimination on the basis of sex;
• Provide a consistent, legally sound framework on which survivors, the accused, and schools can rely;
• Require schools to offer clear, accessible options for any person to report sexual harassment;
• Empower survivors to make decisions about how a school responds to incidents of sexual harassment;
• Require the school to offer survivors supportive measures, such as class or dorm reassignments or no-contact orders;
• Protect K-12 students by requiring elementary and secondary schools to respond promptly when any school employee has notice of sexual harassment;
• Hold colleges responsible for off-campus sexual harassment at houses owned or under the control of school-sanctioned fraternities and sororities;
• Restore fairness on college and university campuses by upholding all students’ right to written notice of allegations, the right to an advisor, and the right to submit, cross-examine, and challenge evidence at a live hearing;
• Shield survivors from having to come face-to-face with the accused during a hearing and from answering questions posed personally by the accused;
• Require schools to select one of two standards of evidence, the preponderance of the evidence standard or the clear and convincing evidence standard, and to apply the selected standard evenly to proceedings for all students and employees, including faculty;
• Provide “rape shield” protections and ensure survivors are not required to divulge any medical, psychological, or similar privileged records;
• Require schools to offer an equal right of appeal for both parties to a Title IX proceeding;
• Give schools flexibility to use technology to conduct Title IX investigations and hearings remotely; and
• Protect students and faculty by prohibiting schools from using Title IX in a manner that deprives students and faculty of rights guaranteed by the First Amendment.

A copy of the Secretary’s press release is found at: https://www.ed.gov/news/press-releases/secretary-devos-takes-historic-action-strengthen-title-ix-protections-all-students

A copy of a webinar offered by the Office of Civil Rights is found at: https://www.youtube.com/watch?v=TdfT5R8ibm4&feature=youtu.be

A summary of the Title IX rules is found at: https://www2.ed.gov/about/offices/list/ocr/docs/titleix-summary.pdf

A copy of the final rule is found at: https://www.govinfo.gov/content/pkg/FR-2020-05-19/pdf/2020-10512.pdf

FSA posts new reports to Data Center

On May 20, 2020, Federal Student Aid (FSA) issued new reports to its FSA Data Center, which includes quarterly updates as of March 31, 2020. Some of the findings are:

• Federal Student Loan Portfolio: The outstanding federal student loan portfolio currently is $1.54 trillion. The Direct Loan portfolio represents 83% of the outstanding loan portfolio, the FFEL portfolio represents more than 16% of the outstanding portfolio, and Federal Perkins Loans comprise less than one-half percent of the outstanding loan portfolio.
• Increased Use of Forbearance: The federal student loan servicers have begun to implement the coronavirus pandemic forbearance, resulting in a 37% increase in Direct Loan total balances in forbearance over the previous year.
• Income-Driven Repayment Enrollment: The enrollment in income-driven repayment plans has continued to increase and about 8 million Direct Loan borrowers were enrolled in IDR plans, a 7% increase from March 2019.
• New Defaults and Delinquencies: During the second quarter of FY 2020, the percentage of new defaulters and the percentage of dollars entering default decreased compared to the same time last year. About 238,000 Direct Loan borrowers, or 1.3% of recipients who were in repayment last quarter with outstanding balances totaling $6.9 billion or 0.9% of the total outstanding dollars that were in repayment last quarter, entered default.

A copy of the FSA announcement is found at: https://ifap.ed.gov/electronic-announcements/052020FSAPostsNewReportstoFSADataCenter

HELP Chairman Alexander states he would insist on liability protection for colleges and universities in next COVID-19 legislation

On May 21, 2020, Chairman of the Health, Education, Labor and Pensions Committee Lamar Alexander (R-TN) issued a press release expressing strong support for limited liability for colleges and universities that reopen this fall, and recommending greater flexibility for how institutions of higher education can use federal relief money. He said that both issues would be top priorities in any coronavirus relief package that the Senate take up when it returns after Memorial Day. Chairman Alexander said that he has heard from many college leaders that “they don’t want to be sued if they reopen their school and a student gets sick.”

A copy of Senator Alexander’s press release is found at: https://www.alexander.senate.gov/public/index.cfm/pressreleases?ID=1A741DCB-4043-4A5A-A46A-74FDD42DBB2A

ED issues guidance on HEERF grants

Late Thursday, May 21, 2020, after facing much criticism over its guidance that would limit emergency financial aid grants to those eligible to receive Title IV aid, the Department of Education released updated guidance stating it would not enforce prior guidance given on student eligibility for the emergency financial aid grants because it lacks “the force and effect of law.” The Department reiterated its guidance that emergency financial aid grants may only be given to students who are or could be eligible to participate in programs under Section 484 of the Higher Education Act, as amended. Therefore, international students, those enrolled in the Deferred Action for Childhood Arrivals (DACA) program, and undocumented students are prohibited from receiving the emergency financial aid grants.

The May 21st updated guidance clarifies that the guidance related to student eligibility is specific to the distribution of emergency financial aid grants under the CARES Act, but does not apply to the use of the funds under the Higher Education Emergency Relief Fund (HEERF) to cover any costs associated with significant changes to the delivery of instruction due to COVID-19. However, if the institution chooses to use institutional share funds to make emergency financial aid grants, those students must be eligible to receive emergency financial aid grants under the CARES Act, which excludes international students, undocumented students, and DACA students.

A copy of the Department’s guidance is found at: https://www2.ed.gov/about/offices/list/ope/caresact.html

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.