Washington News Brief

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

Biden-Sanders release unity platform

Former Vice President Joe Biden and Senator Bernie Sanders (I-VT) released several policy recommendations developed by six unity task forces that were established by both campaigns in May to cover a variety of policy issues. The recommendations include the following items related to higher education:

• Make community colleges tuition free for all students and to make public four-year colleges tuition free for students from families earning less than $125,000 annually;
• Historically Black Colleges and Universities, Hispanic-Serving Institutions, and other Minority Serving Institutions should receive federal grants to lower college costs;
• A Title I for Postsecondary Education should be created to enable colleges and universities to more comprehensively serve the needs of low-income and/or underprepared students;
• The federal government should provide $10,000 in student loan debt relief and provide up to $50,000 in student loan forgiveness for educators;
• Student loan payments and interest for borrowers making less than $25,000 should be suspended, and payments should be capped at no more than 5% of discretionary income for those borrowers making over $25,000;
• The Public Service Loan Forgiveness enrollment process should be made automatic and forgiveness should be increased up to $10,000 per year for five years;
• The federal government should end the garnishment of Social Security benefits to pay federal student loans;
• The federal government should ensure that loan cancellation will not force borrowers to incur any additional tax liability, and borrowers should be automatically in income-driven repayment programs; and
• The federal government should increase lender accountability to ensure borrowers receive adequate loan training and understanding, and the Department of Education should end federal contracts with loan servicers with a pattern of misleading or mistreating student loan borrowers.

Page 26 of the recommendations includes the following warning for for-profit colleges under a Biden Administration:

“Democrats will crack down on predatory for-profit higher education programs, including by issuing requirements that these programs be able to demonstrate their value and effectiveness before becoming eligible for federal student loans. We will call upon the Secretary of Education to use her authority to forgive debt carried by students who were ripped off by predatory schools, including by programs that defrauded students or that misrepresented program offerings or program outcomes, as well as debt held by the permanently disabled. And we will protect veterans and servicemembers from being steered into low-performing for-profit higher education and professional programs.”

Former Vice President’s recommendations are found at: https://joebiden.com/wp-content/uploads/2020/07/UNITY-TASK-FORCE-RECOMMENDATIONS.pdf

Senate Democrats introduce new coronavirus relief package

On June 30, 2020, Senate Democrats, led by Senator Patty Murray (D-WA), Ranking Member of the Senate Health, Education, Labor and Pensions (HELP) Committee, and Senate Democratic Leader Chuck Schumer (D-NY), introduced a new coronavirus relief bill, the Coronavirus Child Care and Education Relief Act (CCCERA), that would provide additional aid for institutions of higher education and impose a number of restrictions on the Department of Education’s (ED) authority in the implementation of the new bill. Of the $430 billion included in the bill, $132 billion would be available for institutions of higher education, including Historically Black Colleges and Universities (HBCUs), tribal colleges, and Minority-Serving Institutions (MSIs).

The bill would:

• Change the allocation formula used in the CARES Act to distribute funds using student headcount, instead of full-time enrollment.
• Provide 90% of the $132 billion in the bill to public and private non-profit institutions, which still must use at least 50% of the funds to provide emergency financial aid grants to students.
• Clarify that emergency financial aid grants awarded to students could be used for any components of a student’s cost of attendance, and remove the CARES Act requirement that grants could only be awarded to cover expenses related to the disruption of campus operations due to COVID-19.
• Allow access to HEERF funds by non-Title IV eligible students, such as DACA students, students who have not filed a FAFSA, students who have a minor drug conviction, borrowers who have previously defaulted on a student loan, and those students who are veterans using the GI bill.
• Permit colleges and universities to use the institutional portion of their allotment to cover lost revenues, which are not permitted in the allowable uses under the CARES Act.

The bill would allocate 1% of the $132 billion to proprietary institutions, vocational institutions, and institutions outside the United States that have been deemed eligible for Title IV aid. All of these funds would be required to be used for emergency financial aid grants to students. An additional 1.5% would be distributed among proprietary institutions to “prevent, prepare for, and respond to the qualifying emergency.”

The Ranking Member is expected to ask unanimous consent on the Senate floor to pass the bill. Senate Republicans are expected to object to its passage. Senate Majority Leader Mitch McConnell (R-KY) said the Senate will focus on the next relief package following the Senate’s two-week recess that started July 3, with the goal of finalizing the package before Congress adjourns in August.

A fact sheet on the bill is found at: https://www.help.senate.gov/imo/media/doc/CCCERA%20Fact%20Sheet%20062920.pdf

FTC sends more than $1 million in refunds to victims of student loan debt

The Federal Trade Commission (FTC) announced that it is mailing checks totaling more than $1 million to 41,048 victims who lost money to a student loan debt relief scam. American Student Loan Consolidations and BBND Marketing settled FTC allegations that the companies’ operators pretended to be affiliated with the Department of Education or with loan servicers to trick consumers into paying hundreds of dollars in illegal upfront fees for help with their student loans. The FTC alleged that the companies falsely promised to forgive student loans, lower monthly payments, and reduce interest rates.

A copy of the FTC press release is found at: https://www.ftc.gov/news-events/press-releases/2020/07/ftc-sends-more-1-million-refunds-victims-student-loan-debt-relief

OPE provides update on required CARES Act quarterly reporting

On July 10, 2020, the Department of Education released a Coronavirus Aid, Relief sand Economic Security (CARES) Act update on the quarterly reporting requirement, which outlines a process for schools to meet the reporting requirement for any grantee that receives more than $150,000 in funds to report to the Department on a quarterly basis on how those funds are utilized. The Department has determined that monthly reporting requirements specified in the Federal Funding Accountability and Transparency Act (FFATA) of 2006 would meet the CARES Act quarterly reporting requirement. The FFATA reporting appears to be separate and apart from the Higher Education Emergency Relief Fund (HEERF) grants to students reporting requirements.

We expect to hear more about the FFATA reporting in the near future, and we will keep you posted.

A copy of the new reporting requirements for HEERF grants to institutions is found at: https://ifap.ed.gov/electronic-announcements/071020UpdateRequiredCARESActQtrlyReporting

OPE announces additional regulatory flexibilities related to COVID-19

On July 10, 2020, the Office of Postsecondary Education (OPE) released additional flexibilities related to COVID-19 as institutions and their students continue to face challenges. The Department is extending the date for institutions to distribute their Annual Security Reports (ASRs) and Annual Fire Safety Reports (AFSRs) to Dec. 31, 2020. Additionally, the annual crime and fire safety survey will be open from Nov. 18, 2020 through Jan. 14, 2021.

The Department is extending the deadline for submission of the 2021-2022 FISAP until Nov. 2, 2020. The Dec. 15, 2020 deadline for submission of 2020-2021 FISAP edit corrections and the Perkins Cash on Hand remains unchanged.

A copy of the announcement is found at: https://ifap.ed.gov/electronic-announcements/071020AdditionalRegulatoryFlexRelatedCOVID

FSA announces that the 2020 FSA training conference to be delivered virtually

On July 10, 2020, Federal Student Aid (FSA) announced that the 2020 FSA Training Conference will be delivered virtually on Dec. 1-4, 2020. More details will be posted later this summer.

A copy of the announcement is found at: https://ifap.ed.gov/electronic-announcements/071020FSATrainConfFinAidProf2020VirtualDec2020

House Appropriations Committee approves Labor, HHS, and Education Appropriations Act

On July 13, 2020, the House Appropriations Committee on Labor, Health and Human Services, Education and Related Agencies approved the Fiscal Year (FY) 2021 Labor, Health and Human Resources, Education and Related Agencies Appropriations Act, by a party vote of 30-22. No amendments were offered to the bill during the subcommittee markup. The bill would provide $196.5 billion in discretionary funding for the Department of Labor, Department of Health and Human Services, and Department of Education, an increase of $2.4 billion over the FY 2020 enacted level and $20.8 billion over the President’s budget request. The bill would provide $73.5 billion in discretionary funding for the Department of Education, which is $716 million above last year’s level and $6.9 billion above the President’s budget request.

Some of the key education provisions include:

• $73.5 billion in discretionary funding for the Department of Education, which is $716 million above last year’s level and $6.9 billion above the President’s budget request.
• A maximum Pell Grant award at $6,495, an increase of $150 over the FY 2020 enacted level.
• $880 million for the Federal Supplemental Educational Opportunity Grant program, an increase of $15 million above the FY 2020 enacted level and $1.2 billion for Federal Work-Study, an increase of $30 million above the FY 2020 enacted level.
• Modifying the 90/10 rule, by requiring for-profit colleges to derive more of their revenue from non-federal sources (making it an 85/15 rule) and classifying all federal funds in the calculation.
• Language providing incarcerated individuals with Pell Grants at public and nonprofit institutions of higher education under certain conditions.

“This spending bill determines the critical federal investments in health, labor, human resources, and education, and builds on this subcommittee’s efforts at the center of the health and economic crises, both of which have exposed serious disparities,” said House Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies Chairwoman Rosa DeLauro (D-CT) in a press release.

A copy of the Committee Democrats’ press release is found at: https://appropriations.house.gov/news/press-releases/appropriations-committee-approves-fiscal-year-2021-labor-hhs-education-funding

A copy of the Committee Republicans’ press release is found at: https://republicans-appropriations.house.gov/news/press-releases/committee-republicans-object-energy-and-water-development-and-labor-health-and

Middle States Commission on Higher Education would be the second regional accrediting agency to consider colleges and universities from outside their traditional geographic borrowers

On July 13, 2020, the Middle States Commission on Higher Education announced that it would become the second regional accrediting agency to take advantage of the new federal authority to consider colleges and universities from outside their traditional geographic boundaries effective July 1, 2020. The first accrediting agency that announced its plan to expand accreditation to institutions outside its geographic boundaries was made by the Western Association of Schools and Colleges’ Senior College and University Commission in February 2020.

The announcement is found at: https://www.msche.org/2020/07/13/msche-endorses-domestic-and-international-membership-expansion/

Trump Administration rescinds July 6 guidance that would have prohibited international students from studying at campuses offering online-only instruction in the fall

On July 14, 2020, the Trump Administration rescinded guidance that it had announced on July 6, 2020, which would have prohibited international students from studying at campuses offering online-only instruction in the Fall term and reverted to the earlier March guidance, which permitted international students to enroll in online programs. Pushback came from the higher education community that included multiple lawsuits, alleging unnecessary cruelty by the White House during a pandemic.

The Trump Administration announced its decision to rescind its prior guidance at the hearing held on July 14, 2020 that was related to a lawsuit brought by Harvard University and the Massachusetts Institute of Technology. U.S. District Court Judge Allison D. Burroughs, who presided over the lawsuit, announced that the parties had reached a resolution.

CFPB releases Your Financial Path to Graduation web tool

On July 15, 2020, the Consumer Financial Protection Bureau (CFPB) released the Your Financial Path to Graduation web tool that is designed to help students understand the total cost of attending college and make informed decisions about paying for their education. According to CFPB, the web tool helps students turn financial aid offers into plans to pay for school step-by-step, explaining terms, offering money saving tips, and tracking uncovered costs. Once students finish making a plan, the web tool estimates the total debt at graduation and offers information to help the students evaluate whether that debt is affordable in the long run.

An explanation of the web tool is found at: https://www.consumerfinance.gov/paying-for-college/your-financial-path-to-graduation/?houx=826&fdx=340&clhx=87&trnx=324&hltx=121&entx=94&retx=22&taxx=-6&othx=385

22 states file suit against ED challenging the borrower defense to repayment rule

On July 15, 2020, 22 states and the District of Columbia filed a lawsuit in the U.S. District Court for the Northern District of California challenging the Department of Education’s final rule on borrower defense to repayment that went into effect on July 1, 2020. As reported in various newsletters, the lawsuit, which was led by California Attorney General Xavier Becerra and Massachusetts Attorney General Maura Healey, states that the new rule makes it more difficult for federal student loan borrowers to obtain loan forgiveness if they believe they are defrauded by their college. The lawsuit comes two weeks after the House failed to override President Trump’s veto of a bill passed by Congress that would have blocked the implementation of the rule from taking effect on July 1, 2020.

ED publishes 2020-2021 award year deadline dates for reports

On July 16, 2020, the Department of Education published a notice in the Federal Register announcing the 2020-2021 award year deadlines for reports and other records associated with the FAFSA, the FSEOG Program, the FWS Program, the Federal Pell Grant Program, the TEACH Grant Program and the Iraq and Afghanistan Service Grant Program.

The Notice is found at: https://ifap.ed.gov/sites/default/files/attachments/2020-07/FR071420.pdf

FSA announces upcoming enhancement to eZ-Audit

On July 17, 2020, Federal Student Aid (FSA) announced an upcoming enhancement to eZ-Audit, scheduled for Aug. 2, 2020. With this update to the web-based system, all schools and other entities required to submit financial statements and compliance audits to FSA will begin submitting those statements and audits electronically using eZ-Audit. Hard copies will no longer be mailed to FSA.

A copy of the announcement is found at: https://ifap.ed.gov/electronic-announcements/071720ElectSubFinStatementsComplianceAudits4AllSchools

Alexander introduces bill to simplify student loan repayment and simplify the FAFSA

On July 21, 20202, Chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee Lamar Alexander (R-TN) introduced a bill titled, the Student Loan Repayment and FAFSA Simplification Act, S. 4247, which would allow more than 40 million student loan borrowers to continue deferring their monthly payments if they are earning no income after Oct. 1, 2020. The proposal would extend the deferment period that was enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, but expires Sept.r 30, 2020. The proposal states that once a borrower begins earning income again, his/her monthly payment could not be more than 10% of his/her income after “the necessities of life, such as the cost of housing – such as rent or mortgage – and food,” are deducted.

Chairman Alexander also proposed simplifying the FAFSA by reducing the number of questions students must answer to obtain federal financial aid from more than 100 to about 30 questions. Finally, Senator Alexander proposed reducing the number of loan repayment options from 9 to 2 options: a standard 10-year plan and an income-driven repayment plan.

Senator Alexander’s full remarks on his proposal is found at: https://www.help.senate.gov/imo/media/doc/Senator%20Lamar%20Alexander%20Student%20Loan%20Repayment%20and%20FAFSA%20Simplification%20Act%20Remarks.pdf

OCR releases training webinar for Title IX decision makers and hearing officers

On July 23, 2020, the Office for Civil Rights released a training webinar titled, Conducting and Adjudicating Title IX Hearings: An OCR Training Webinar, which addresses the role and responsibilities of the people who conduct and adjudicate grievance proceedings involving an allegation of sexual harassment under the new Title IX rules.

The webinar is found at: https://youtu.be/yQ4-S5_Jahw

Other webinars are also available on the Title IX rules and include: New Title IX Protections Against Sexual Assault; Due Process Protections under Title IX; and Title IX Regulations Addressing Sexual Harassment.

The other webinars are found at: https://www2.ed.gov/about/offices/list/ocr/blog/index.html

Recent ICE guidance bars new international students from online-only enrollment for the fall

On July 24, 2020, the U.S. Immigration and Customs Enforcement (ICE) provided clarifying questions and answers for international students indicating that travel restrictions will only apply to newly enrolled students whose postsecondary programs will operate solely online for the fall term. However, if the student was enrolled in a program on March 9, 2020, but subsequently left the country, “that student likely remains eligible for a visa since the March 2020 guidance permitted a full online course of study from inside the United States or from abroad.”
This update results from the Trump Administration’s decision to rescind its initial guidance that barred international students from remaining in the country if the student was enrolled in an online-only program.

A copy of the new guidance is found at: https://www.ice.gov/doclib/sevis/pdf/fall2020faq.pdf

Alexander introduces bill to allow borrowers with no income to continue to defer their monthly payment

On July 27, 2020, Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) introduced a bill to respond to the COVID-19 pandemic, the Safely Back to Work and Back to School Act, which would allow student loan borrowers with no income to continue to defer their monthly payment. Senator Alexander’s press release states: “If you are one of 43 million Americans with a student debt, you can continue to defer your monthly payment after October 1 if you have no income. When you do begin earning income, your monthly payment will never be more than 10% of your income AFTER deducting the necessities of life such as rent or mortgage and food.” In addition, the bill would give parents more choices of schools for their children and would increase the availability of child care for working parents.

A copy of the Senator’s press release is found at: https://www.alexander.senate.gov/public/index.cfm/pressreleases?ID=CE5CC476-A169-487C-8E51-CEB06DC812E5

Senate Appropriations Committee Chairman introduces the Republican proposal for the next COVID-19 bill that will serve as a basis for negotiations with the House and Senate Democrats

On July 27, 2020, the Senate Appropriations Committee Chairman Richard Shelby (R-AL) introduced the Committee’s proposal for the next COVID-19 stimulus bill that will serve as a basis for negotiations with House and Senate Democrats with the intention of reaching a bipartisan agreement in early August. The Coronavirus Response Additional Supplemental Appropriations Act, 2020 (CRASAA) is an alternative to the House of Representatives Democrats’ H.R. 6800, HEROES Act.

Some of the provisions from the Safely Back to Work and Back to School Act, introduced by Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN), on July 27, 2020, which would defer monthly payments after October 1 if the borrower has no income, will likely be included in the stimulus bill. [See article below.]

In addition, some of the language from S. 4247, the Student Loan Repayment and FASFA Simplification Act, which was introduced by Chairman Alexander on July 21, 2020, to create two student loan repayment plans, down from nine repayment plans, may also be included in the stimulus bill as well. [See article below.]

The Republican proposal does not extend the student loan relief enacted through the CARES Act. Reports from news outlets indicate that consumer groups and Democrats, including Ranking Member of the HELP Committee Patty Murray (D-WA), are opposed to Senator Alexander’s proposal. The Democrats want a full extension and expansion of the student loan relief included in the CARES Act. They would like to provide up to $10,000 worth of debt cancellation to each student borrower.

Some of the relevant provisions that impact institutions of higher education include the following:

• HEERF funds would be provided to institutions of higher education as follows:
  • 85% of the funds ($24.7 billion) are provided to all eligible postsecondary institutions based on 90% of each institution’s full-time equivalent Pell Grant enrollment and 10% of its full-time, non-Pell Grant enrollment. Exclusively online students are excluded from both formula factors.
  • 10% of funds ($2.9 billion) are provided for additional awards through programs under Titles III, V, and VII.
  • 5% of funds ($1.45 billion) are awarded to institutions determined by ED to have the greatest unmet need including for-profit institutions and those institutions that serve exclusively online students.
  • Institutions may use the funds to defray expenses associated with COVID-19 and provide financial grants to students, including students exclusively enrolled in distance education. Funds may not be used to fund contractors for the provision of pre-enrollment recruitment activities, endowment, or capital outlays associated with facilities related to athletics, sectarian instruction or religious worship.
• The bill would provide borrowers entering repayment on or after Oct. 1, 2020 with two repayment options: a 10-year standard repayment plan and an income-determined repayment plan.
• CARES Act Higher Education Flexibility Authorities and Other Higher Education Provisions:
  • Allows ED to waive the requirement for a non-profit entity providing employment under the FWS program to provide a non-Federal match.
  • Permits the reallocation of FWS into the FSEOG program through the end of the 2020-2021 award year or the end of the pandemic emergency, whichever is later.
  • Permits foreign institutions to continue to provide education through distance education during the pandemic or the end of the 2020-2021 award year, whichever is later.
  • Applies the no-payment, no interest provisions for borrowers of Federal student loans established under the CARES Act to borrowers who are in an in-school deferment period.
  • Prohibits the Secretary from counting funds received by students (or spouse or parent of a student) for expected family contribution (EFC) purposes.
  • Provides that financial administrators may determine an independent student as having a zero EFC if the student is receiving unemployment benefits or has filed for such benefits.
  • Provides that financial aid administrators may make adjustments to a student’s EFC based on the totality of a family’s situation, including considering unemployment benefits.
  • Requires ED to adjust the model used to select institutions for program reviews to account for a rise in the use of professional judgement during the 2020-2021 and 2021-2022 award years.
  • Requires ED to add a question to the FAFSA for the 2020-2021 and 2021-2022 award years regarding whether the applicant has lost significant income due to the pandemic emergency.

FSA announces progress on the Next Gen FSA initiative and StudentAid.gov

On June 29, 2020, Federal Student Aid (FSA) released an electronic announcement summarizing the updates to the Next Gen FSA initiative and StudentAid.gov (https://studentaid.gov). Features that are now available are:

• Loan Simulator Enhancements: Loan Simulator, initially launched in February, has been enhanced to allow borrowers with varied loan portfolios to receive more refined recommendations, including multiple repayment plans appropriate for their various loan types.
• Public Service Loan Forgiveness (PSLF) Help Tool Enhancements: The PSLF HELP Tool has been updated to provide borrowers with information about employer eligibility through an FSA-managed employer database. After a borrower finds his/her employer, he/she will receive a notification of the employer’s eligibility status as eligible, ineligible, or likely ineligible for PSLF.

Additional updates will be shared throughout 2020.

The electronic announcement can be found at: https://ifap.ed.gov/electronic-announcements/062920NexGenFSAStudentAidgovWebEnhanceJune2020

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.