Washington News Brief

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

Biden reveals American Families Plan

On April 28, 2021, President Joe Biden rolled out its American Families Plan. The American Families Plan includes:

• Offering two years of free community college to all Americans, including DREAMers, costing $109 billion.
• Providing two years of subsidized tuition and expanding programs in high demand fields at HBCUs, TCUs, and MSIs for families earning less than $125,000, costing $39 billion.
• Providing up to $1,400 in additional assistance to low-income students by increasing the Pell Grant award.
• Investing in completion and retention activities in colleges and universities that serve high numbers of low-income students, particularly at community colleges, states, territories, tribes, costing $62 billion.
• Investing in teacher preparation programs to improve the quality of teacher preparation at HBCUs, TCU, and MSIs, costing $400 million.

A Fact Sheet for the American Families Plan is available at: https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/28/fact-sheet-the-american-families-plan/

FSA reminds institutions of annual DUNS number registration

On April 29, 2021, Federal Student Aid (FSA) reminded institutions that they must complete the annual DUNS number registration process as soon as possible. The G5 website verifies the Data Universal Numbering System (DUNS) number in the General Services Administration (GSA) System for Award Management (SAM.gov) website before carrying out administrative actions that involve a DUNS number. Completing the registration process now will allow schools to be automatically set up to later receive a Unique Entity Number (UEN), a new school identifier expected to be a mandatory implementation in all Department of Education systems in April 2022.

A copy of the announcement is found at: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2021-04-29/reminder-annual-duns-number-registration-renewal-system-award-management-database-ea-id-general-21-28

ED announces Richard Cordray as COO of FSA

On May 3, 2021, the Department of Education announced that it has selected Richard Cordray as the Chief Operating Officer (COO) of Federal Student Aid (FSA). Mr. Cordray is the former Director of the Consumer Financial Protection Bureau (CFPB) and the former Attorney General of Ohio. FSA is responsible for managing the $1.6 trillion portfolio of student loans owed by 45 million Americans. During his tenure at the CFPB, the CFPB brought enforcement actions that returned over $12 billion to 30 million Americans. Many members of the higher education community have concluded that Mr. Cordray will take aggressive action on student loans and for-profit colleges.

A copy of the announcement is found at: https://www.ed.gov/news/press-releases/us-department-education-announces-richard-cordray-chief-operating-officer-federal-student-aid

ACCET announces Christopher Lamber as new executive director

On May 4, 2021, the Commission of the Accrediting Council for Continuing Education and Training (ACCET) announced that Christopher Lambert has been appointed as the agency’s new Executive Director starting on May 17, 2021. Interim Director Judy Hendrickson recently announced her retirement taking effect on June 4, 2021. Mr. Lambert previously served as the Associate Executive Director of ACCSC and has extensive knowledge of the accreditation process and the regulatory environment for proprietary schools.

A copy of the ACCET announcement is found at: https://www.career.org/uploads/7/8/1/1/78110552/5-04-21_member_notice_-_accet_executive_director.pdf

FTC sends more than $273,500 in refunds to people who were scammed by Manhattan Beach Venture into believing their loan payments would be lowered or eliminated

On May 5, 2021, the Federal Trade Commission (FTC) announced that it is sending more than $273,500 in refunds to people who lost money to a student loan debt relief scheme that charged them illegal upfront fees and tricked them into believing their student loan payments would be permanently lowered or eliminated. According to an FTC complaint filed in September 2019, Manhattan Beach Venture deceptively marketed payment relief and loan forgiveness programs to people looking for help with their student loans.

A copy of the FTC press release is found at: https://www.ftc.gov/news-events/press-releases/2021/05/ftc-sends-more-273500-refunds-people-who-lost-money-student-loan

House Education and Labor Committee Republicans ask GAO to examine the federal student loan program’s finances

On May 6, 2021, House Education and Labor Committee Ranking Member Virginia Foxx (R-NC) and House Higher Education and Workforce Investment Subcommittee Ranking Member Greg Murphy (R-NC) sent a letter to the Government Accountability Office (GAO) asking it to examine the findings from a report on the federal student loan program’s finances that was commissioned by former Education Secretary Betsy DeVos in 2018. The request follows a prior demand by the same Committee Republicans to the Department of Education that it immediately turn over the analysis that was first reported in The Wall Street Journal (WSJ). According to the WSJ article, over the course of three decades, Congress’ various administrations and federal watchdogs had “systematically made the student loan program look profitable when in fact defaults were becoming more likely.” The analysis found that the Department miscalculated student loan budgetary projections for years, and the lawmakers claim the Department is “hiding information from the public that could provide a more accurate depiction of the budgetary impact” of the federal student loan program.

It was reported that Secretary of Education Miguel Cardona told the House Appropriations Committee at a hearing held on May 5, 2021 that he supported the Department’s decision to not release the report.

A copy of the lawmakers’ letter is found at: https://republicans-edlabor.house.gov/uploadedfiles/5621_gao_studentloanscore_final.pdf

ED announces availability of $36 billion in American Rescue Plan funds to students and institutions

On May 11, 2011, the Department of Education announced the availability of more than $36 billion in emergency grants provided under the American Rescue Plan (ARP) Act for postsecondary education. These funds will assist over 5,000 institutions that can provide emergency financial aid to millions of students and “ensure learning continues during the COVID-19 national emergency.” With this announcement, institutions will be able to target resources to all students with exceptional financial need. Institutions can also use the funds to retain students by providing academic or mental health support systems for students. “Additionally, institutions can reengage students by discharging student debts at their institution accrued during the pandemic.” A portion of the institutional funds can be used by public and private nonprofit institutions to implement evidence-based practices to monitor and suppress coronavirus in accordance with the public health guidelines.

A copy of the press release is found at: https://www.ed.gov/news/press-releases/us-department-education-makes-available-36-billion-american-rescue-plan-funds-support-students-and-institutions

A copy of the “Higher Education Emergency Relief Fund III Frequently Asked Questions” is found at: https://www2.ed.gov/about/offices/list/ope/arpfaq.pdf?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=&utm_source=CER+Daily+News&utm_campaign=35d13c8ab4-EMAIL_CAMPAIGN_2018_07_31_05_42_COPY_01&utm_medium=email&utm_term=0_936a52d124-35d13c8ab4-297037085

A copy of the new rule on student eligibility, which will allow undocumented students, those enrolled in the Deferred Action for Childhood Arrivals, and international students to access the emergency grants, is found at: https://www2.ed.gov/about/offices/list/ope/finalheerfnfr.pdf

FSA announces additional designations of entities that may use the FAFSA data

On May 12, 2021, Federal Student Aid (FSA) announced that it has designated the Federal Communication Commission (FCC), the Department of Labor (DOL) and the Department of Health and Human Services (HHS) under section 483(a)(3)(E) of the Higher Education Act, as amended (HEA), as entities that may use the Free Application for Federal Student Aid (FAFSA) data.

The FCC may use the FAFSA data to aid in the administration of its Emergency Broadband Benefit Program (EBB), which connects low-income households, particularly those with school-aged children, to broadband networks at affordable rates. Additional funding became available under the Consolidated Appropriations Act of 2021. The DOL may use the FAFSA data to aid in the administration of the Pandemic Unemployment Assistance (PUA), which may provide unemployment benefits to students under the American Rescue Plan. Under Executive Order 14009 on Strengthening Medicaid and the Affordable Care Act, HHS was directed to establish a Special Enrollment Period for uninsured and under-insured Americans to seek coverage through the Federally Facilitated Marketplace. As a result, HHS has established a Special Enrollment Period that runs through Aug. 15, 2021. Additionally, the American Rescue Plan also temporarily expanded the financial assistance available for low- and moderate-income families to purchase insurance. As a result of the new designation, ED may provide students with information about financial assistance available and new options to enroll in health insurance coverage.

A copy of the announcement is available at: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2021-05-12/additional-designations-entities-under-section-483a3e-higher-education-act-and-institution-higher-education-ihe-guidance-ea-id-general-21-30

FSA denies reinstatement application for for-profit law school

On May 13, 2021, Federal Student Aid (FSA) informed Florida Coastal School of Law that its application for reinstatement to participate in federal student aid programs has been denied. Secretary of Education Miguel Cardona said: “Too often, we see for-profit schools that try to take advantage of students, misuse taxpayer dollars, and skirt the rules to participate in federal student aid programs. Today we want to be heard and understood by for-profit schools around the country: we will be vigilant in ensuring they meet their commitments to students, families, and taxpayers.”

A copy of the press release is found at: https://www.ed.gov/news/press-releases/department-educations-federal-student-aid-denies-reinstatement-application-profit-law-school

OIG issues report on closed institutions that receive HEERF Grants

On May 13, 2021, the Department of Education’s Office of Inspector General (OIG) released a report titled, “Risk of Closed Institutions of Higher Education Receiving Higher Education Emergency Relief Fund Grants.” (ED-OIG/I21SIU00841). The report reflects OIG’s observations concerning institutions of higher education that ceased to provide educational instruction in all programs of study and received or had access to coronavirus response and relief aid through the Higher Education Emergency Relief Fund (HEERF).

The OIG found that at least $1,261,329 in HEERF grants were awarded to and drawn down by closed institutions of higher education. The OIG also found that 17 institutions of higher education that closed on or before December 31, 2020, applied for and were awarded a total of $4,912,675 of HEERF grants by the Office of Postsecondary Education (OPE). Of these 17 institutions, 14 drew down HEERF funds and 3 did not draw down any of their awards. Of the 14 institutions that drew down their HEERF awards, 8 made drawdowns after the institution closed according to the Postsecondary Education Participants Systems (PEPS) totaling $1,261,329. In addition, 1 of the 14 closed institutions that drew down HEERF funds made a draw of $364,715 one day before closing.

OPE agreed with the OIG recommendations to verify that institutions that were allocated, awarded, or drew down funds were not closed.

A copy of the OIG report is found at: https://www2.ed.gov/about/offices/list/oig/auditreports/fy2021/i21siu00841.pdf

OCR announces a virtual public hearing for improving enforcement of Title IX

On May 17, 2021, the Department of Education’s Office of Civil Rights (OCR) announced that it will be holding a virtual public hearing on June 7-11, 2021 to gather information for the purpose of improving enforcement of Title IX of the Education Amendments of 1972. OCR will be seeking comments from the public on steps the Department can take to ensure that schools are providing students with educational environments free from discrimination in the form of sexual harassment.

• The notice for the hearing includes:
• The agenda for the virtual public hearing;
• The format of the hearing;
• Information about how members of the public can participate in the hearing, including how to register to provide a live comment during the hearing and how to submit a written comment; and
• Information about how to attend the hearing virtually.

A copy of the announcement is found at: https://www.ed.gov/news/press-releases/department-educations-office-civil-rights-announces-virtual-public-hearing-gather-information-purpose-improving-enforcement-title-ix?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=

A copy of the notice is found at: https://www.govinfo.gov/content/pkg/FR-2021-05-20/pdf/2021-10629.pdf

Department of education rejects request to reverse gainful employment rule

According to a recent article in POLITICO, on May 18, 2021, the Department of Education sent a letter in response to an administrative complaint by Student Defense, a consumer advocacy group, rejecting the request to reverse former Secretary of Education Betsy DeVos’ repeal of the gainful employment rules and would instead go through the negotiated rulemaking process to restore the Obama-era regulations. According to the letter, the article stated that the Department could not reverse the gainful employment rules because “the Department is legally obligated to conduct negotiated rulemaking and notice and comment requirements prior to proposing any changes to the Code of Federal Regulations with respect to Federal student financial aid programs, including with respect to regulations on the subject of gainful employment.”

FSA confirms direct loan interest rates beginning July 1, 2021

On May 20, 2021, Federal Student Aid (FSA) announced the official interest rates for new Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans. The interest rates will rise on July 1, 2021, as follows:

• Subsidized and Unsubsidized Stafford Loans to undergraduates – 3.73%
• Unsubsidized Stafford Loans to graduate/professional students – 5.28%
• PLUS Loans to parents and graduate/professional students – 6.28%

The announcement said that “In response to the COVID-19 emergency relief period, the interest rates on all Direct Loans has been temporarily set at 0% until at least Sept. 30, 2021. Once the COVID-19 emergency relief period ends, the rates as described in this announcement will be in effect for loans first disbursed on or after July 1, 2021.

A copy of the announcement is found at: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2021-05-19/interest-rates-direct-loans-first-disbursed-between-july-1-2021-and-june-30-2022-ea-id-loans-21-06

Senators Warren, Smith, Van Hollen, and Blumenthal seek updates on how ED is improving its oversight of for-profit institutions

On May 21, 2021, Senators Elizabeth Warren (D-MA), Tina Smith (D-MN), Chris Van Hollen (D-MD), and Richard Blumenthal (D-CT) sent a letter to Secretary of Education Miguel Cardona seeking updates on how the Department of Education is improving its oversight of for-profit colleges and institutions that pose risks to students during the recovery from COVID-19. The letter points that Black and Latino students are over-represented at these institutions, “which contributes to the racial disparities in student loan debt.” The letter goes on to say that during the COVID-19 pandemic, enrollment at public institutions and community colleges dropped while the enrollment at for-profit institutions increased, which may lead to greater student loan debt for Black and Latino students attending for-profit institutions.

The letter noted that under Secretary of Education Betsy DeVos, many of the Obama Administration guardrails that were put in place “to rein in predatory schools” were weakened or rescinded. The letter asked whether there are any plans to hold accreditors more accountable, to expand the College Scorecard consumer tool, and to more closely monitor postsecondary recruitment activities.

A copy of the letter is found at: https://www.warren.senate.gov/imo/media/doc/2021.05.21%20Letter%20to%20ED%20re%20accountability%20for%20predatory%20colleges.pdf

Senators Warren, Smith, Van Hollen, and Blumenthal seek information on restarting student loan repayments and loan servicing

On May 21, 2021, Senators Elizabeth Warren (D-MA), Tina Smith (D-MN), Chris Van Hollen (D-MD), and Richard Blumenthal (D-CT) sent a letter to Secretary of Education Miguel Cardona requesting information on how the Department of Education plans to restart the monthly payments of millions of federal student loan borrowers when COVID-19 relief expires this fall. The Senators also asked Secretary Cardona to explain whether the Department plans to extend the existing contracts with its federal student loan servicers that are set to expire at the end of the year, and whether he will commit to a new loan servicing system that includes “specific, outcome-based incentives for effective loan management and customer service” with penalties for companies that do not meet the standards.

A copy of the letter is found at: https://www.warren.senate.gov/imo/media/doc/2021.05.21%20Letter%20to%20ED%20re%20student%20debt%20issues%20and%20pandemic.pdf

OPE announces public hearings on protections for students, loan repayment, gainful employment, closed school discharges and other higher education regulations

On May 24, 2021, the Department of Education’s Office of Postsecondary Education (OPE) announced public hearings on various higher education regulations, including loan repayment, borrower defense to repayment, gainful employment, closed school discharges, and mandatory pre-dispute arbitration and prohibition of class action lawsuit provisions in the institutions’ enrollment agreements. The virtual hearings will be held on June 21, 23, and 24, 2021 to receive stakeholder feedback on potential issues for future rulemaking sessions.

Secretary of Education Miguel Cardona said: “The Department of Education’s primary responsibility is to serve students and borrowers. That means taking a fresh look at a range of regulations to make sure they are not creating unnecessary barriers, but instead can ensure that institutions and programs serve students well.”

A copy of the press release is found at: https://www.ed.gov/news/press-releases/department-educations-office-postsecondary-education-announces-public-hearings-protections-students-loan-repayment-targeted-loan-cancellation-programs-and-other-higher-education-regulations

A copy of the Federal Register Notice is found at: https://www.govinfo.gov/content/pkg/FR-2021-05-26/pdf/2021-11120.pdf

Progressive groups send letter to ED expressing dissatisfaction with lack of actions to undo DeVos actions

Various publications reported that 25 progressive groups sent a letter to Secretary of Education Miguel Cardona stating their dissatisfaction with the Department of Education’s Office of General Counsel (OGC) under the Biden Administration, citing the failure “to take the necessary steps towards reversing the harm done by DeVos.” The letter also said that the groups are dissatisfied that the Biden Administration has not yet revoked several legal memos put in place by former Secretary of Education Betsy DeVos that precluded federal student loan servicers from communicating with state enforcement agencies and found the Department did not have the authority to forgive large numbers of student loan debt. The letter said that “it is urgent that steps be taken to reinvigorate the OGC so as to reverse the damage that occurred during DeVos’ tenure. To do so, the Administration should either accelerate the appointment of a permanent General Counsel or institute a more effective process management strategy within the Secretary of Education’s office.”

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.