Washington News Brief

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

VA releases Fact Sheet offering support for GI Bill users who are navigating the impact of COVID-19

In Jan. 2021, the Office of Veterans Affairs released a Fact Sheet titled, “Are you a GI Bill student? Here’s what you need to know about COVID-19.” The Fact Sheet advises veterans that if their school changes their courses from resident (physically in-person) to online (distance learning), the veteran will continue to receive benefits, including the Monthly Housing Allowance (MHA), at the resident rate until Dec. 21, 2021, or until the school returns to normal operations of resident training, whichever comes first. These protections will apply to new students as well. Further, if the school temporarily closes, the VA will continue to pay benefits through the end of the term or for 28 days after the school closure date, whichever is sooner. The Fact Sheet also describes some resources to help veterans.

A copy of the VA Fact Sheet is found at: https://benefits.va.gov/gibill/docs/fgib/covid-19_Factsheet.pdf?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=

VA announces enactment of the Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act of 2020

On Jan. 5, 2021, former President Trump signed into law the Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act of 2020 (P.L. 116-315) that provides for improvement and/or expansion of various GI Bill programs.

Some relevant sections include:

Section 1015. Additional requirement for approval of educational institutions for purposes of the educational assistance programs of the Department of Veterans Affairs. This section requires accredited institution to be eligible for participation in the federal student aid program through Title IV of the Higher Education Act in order to be eligible to receive GI Bill funds. Effective: August 1, 2021.

Section 1018. Requirements for educational institutions participating in the educational assistance programs of the Department of Veterans Affairs. This section codifies in statute the requirements of the Principles of Excellence Program, currently in Executive Order 13607. Effective: August 1, 2021.

Section 1019. Overpayments to eligible persons or Veterans. This section adds a requirement that schools and training programs be financially responsible, instead of the students, for benefits paid directly to an educational institution pursuant to the Post-9/11 GI Bill for tuition and fees or the Yellow Ribbon program, and advance payments of initial educational assistance, without consideration of whether the overpayment was the result of the willful or negligent failure of the school. Effective: Jan. 5, 2021.

Section 1022. VA treatment of for-profit educational institutions that convert to nonprofit educational institutions. This is a new requirement for how VA and SAAs treat an institution that converts from a for-profit to a nonprofit educational institution. Institutions are required to receive annual risk-based surveys for a period of three years after converting to a nonprofit institution. Effective: Jan. 5, 2021.

A copy of the Fact Sheet on the education provisions is found at: https://www.career.org/uploads/7/8/1/1/78110552/pl_116-315_fact_sheet__002_.pdf

OPE releases ATB FAQs

On Jan. 15, 2021, the Office of Postsecondary Education (OPE) released frequently asked questions on ability to benefit. The document is an extension to the question and answer attachment to Dear Colleague GEN-16-09.

A copy of the announcement is found at: https://ifap.ed.gov/electronic-announcements/011521AbilitytoBenefitFAQ

OPE issues guidance on accreditation and eligibility requirements for distance education

On Jan. 19, 2021, the Department of Education issued guidance on accreditation and eligibility requirements for distance education. On Aug. 31, 2020, ED published a Federal Register Notice concerning the rescission of guidance that was outdated, and at that time, Dear Colleague letter GEN-06-17 was rescinded. The attachment to the Jan. 19, 2021, announcement provided guidance that clarified that except for the flexibilities provided by the Secretary in response to the national pandemic, before an institution offers any distance education programs that can be eligible for Title IV, the institution must be evaluated and accredited for its effective delivery of distance education programs. Further, after an institution has been approved to offer distance education by the accrediting agency, an institution may offer distance education programs without further accreditor approval, “unless and until a program goes above 50% of distance education or the institution itself goes over 50% for distance education delivery.” Exceeding the 50% threshold for distance education would then trigger the requirement for approval by the institution’s accrediting agency of a substantive change.

A copy of the announcement is found at: https://ifap.ed.gov/electronic-announcements/011921DistanceEducationAccreditation

OIG announces issuance of Dear CPA Letter extending site-visit exemption

On Jan. 22, 2021, the Office of Inspector General (OIG) announced the issuance of a Dear CPA Letter CPA-21-01, which extended the audit site visit exemption provided in Dear CPA Letter CPA-20-01 by tying its expiration to the COVID-19 national emergency. It also extends the site visit exemption to foreign school audits and attestation agreements. The limited exemption described in this letter applies to proprietary school audits and foreign school audits and attestation engagements for any fiscal years in which the COVID-19 national emergency declaration was in place on the last day of the school’s fiscal year.

A copy of the OIG announcement is found at: https://ifap.ed.gov/electronic-announcements/012221IssuanceofDearCPALetterCPA210101

GAO recommends that ED and IRS provide better oversight of for-profit to nonprofit conversions

On Jan. 23, 2021, Committee on Education and Labor Bobby Scott (D-VA) and Senators Maggie Hassan (D-NH), Patty Murray (D-WA), and Dick Durbin (D-IL) announced the release of a Government Accountability Office (GAO) report on for-profit college conversions to nonprofits. The report titled, “IRS and Education Could Better Address Risks Associated with Some For-Profit College Conversions,” reviews what is known about insider involvement in conversions and to what extent the Internal Revenue Service (IRS) and the Department of Education (ED) identify and respond to the risk of improper benefit.

The GAO found that in about one-third of the conversions, former owners or other officials were insiders to the conversion. The GAO report stated that while leadership continuity can benefit a college, insider involvement in a conversion poses a risk that insiders may improperly benefit. They suggest that the insiders will influence the tax-exempt purchaser to pay more for the college than it is worth.

Since January 2011, ED has approved 35 colleges as nonprofit colleges and denied two; nine are under review; and 13 closed prior to ED reaching a decision. The GAO found that, while ED has strengthened its reviews of for-profit college applications for nonprofit status, it does not monitor newly converted colleges to assess ongoing risk of improper benefit.

The GAO recommended:

• IRS assess and improve conversion application reviews; and
• ED develop and implement procedures to monitor newly converted colleges.

A copy of the GAO report is found at: https://www.gao.gov/products/GAO-21-89

ED issues reminder on use of professional judgment

On Jan. 29, 2021, the Department of Education released a Dear Colleague letter (DCL) (GEN-21-02) reminding financial aid administrators of their ability to exercise documented professional judgment when determining student eligibility for federal student aid. The DCL encourages financial aid administrators to consider special circumstances that may arise for students and families during the ongoing COVID-19 pandemic, especially if they are able to document unemployment or reduction in work. The DCL also stated that the Department will not negatively view the increased use of professional judgment or use it as a selection criterion for a program compliance review for the 2021-2022 award year.

A copy of the DCL is found at: https://ifap.ed.gov/dear-colleague-letters/GEN2102

Justice Department drops lawsuit against Yale University

On Feb. 3, 2021, the Justice Department dropped a lawsuit against Yale University that had been filed by the Trump administration. The lawsuit was based on how heavily the University considers race in its admissions practices.

A copy of the dismissal of the lawsuit is found at: https://www.courtlistener.com/recap/gov.uscourts.ctd.141516/gov.uscourts.ctd.141516.50.0_1.pdf?source=email

ED announces Biden-Harris appointees

On Feb. 3, 2021, the Department of Education announced more political appointees that will lead various parts of the Department. Included in the list is Michelle Asha Cooper, who will serve as Deputy Assistant Secretary, Office of Postsecondary Education, and is now serving as the Acting Assistant Secretary for Postsecondary Education.

A copy of the press release is found at: https://www.ed.gov/news/press-releases/department-education-announces-more-biden-harris-appointees

On Jan. 21, 2021, the Department announced the senior appointees at the Department of Education.

A copy of the earlier press release is found at: https://www.ed.gov/news/press-releases/us-department-education-announces-biden-harris-appointees

Veterans Education Project releases research study on the 90/10 rule

On Feb. 11, 2021, the Veterans Education Project (VEP) released its research study, which measured the effects that a change in the “90/10 rule” would have on veterans and the institutions that serve them. The results of the report titled “Collateral Damage, Why an Expanded 90/10 Rule is a Misguided Policy for Protecting Military Students,” prepared by Jason Delisle and Cody Christensen, concluded that including military benefits in the 90/10 rule would cause about 87 institutions that currently pass such a test to fall out of compliance in the most recent year for which data is available. “Reducing the revenue limit to 85% and including military benefits would cause 333 institutions currently in compliance to violate the rule. These institutions represent about 5% and 20% of for-profit institutions that currently participate in the Title IV programs.” These institutions collectively enroll over 100,000 students receiving GI Bill benefits or Tuition Assistance under the Department of Defense.

The report found the loss of for-profit institutions would limit the supply of seats for veterans and military students at for-profit institutions. The report also noted that there are hundreds of public institutions serving these same students, which have weaker outcomes. Finally, the report indicated that a number of high-quality for-profit institutions would fail a 90/10 rule that includes GI Bill and Department of Defense Tuition Assistance. The conclusion was that “Overall we conclude that the 90/10 rule is an antiquated and blunt input test that is concerned entirely with revenues, not what students themselves earn from their education, whether they pay their loans, or whether they graduate.”

A copy of the report is found at: https://veteranseducationproject.org/wp-content/uploads/2021/02/Veterans-Education-Project-Research-Study.pdf

Senate HELP Committee approves nomination of Dr. Miguel Cardona as Secretary of Education

On Feb. 11, 2021, the Senate Health, Education, Labor and Pensions (HELP) Committee approved the nomination of Dr. Miguel Cardona as the next Secretary of Education, by a vote of 17-5. On Feb. 3, 2021, the Senate HELP Committee held a confirmation hearing on the nomination of Dr. Cardona. In her opening remarks, Chairwoman Patty Murray (D-WA) announced that she was excited to work with Dr. Cardona and the Biden administration to serve public schools, colleges, student borrowers, educators, and families across the country. Chairwoman Murray emphasized her desire to confirm Dr. Cardona as soon as possible.

In his opening statement, Ranking Member Richard Burr (R-NC) commended Dr. Cardona for what he called a meteoric rise from a classroom teacher to his current position as a member of the Connecticut Education Commission, all during a challenging time for education. Ranking Member Burr stated that he was pleased that President Joe Biden chose Dr. Cardona to serve as the next Secretary of Education.

In his testimony, Dr. Cardona said that he understood the burden that COVID-19 has placed on the nation’s education system, the mental health system and the well-being of students, parents, teachers, and staff, and that fewer students started at colleges this fall with declines most striking at community colleges. He stated that he will work to re-open classrooms safely, foster innovation, and sit at the table with diverse groups of people who hold a stake in education. He concluded by indicating that there were challenges ahead, but they can be overcome.

Biden may not take executive action to forgive student loans

On Feb. 17, 2021, President Biden said in an appearance at a town hall meeting held on CNN that he favors modest student loan debt relief over the ambitious proposal offered by Majority Leader Chuck Schumer (D-NY) and Senator Elizabeth Warren (D-MA) to cancel $50,000 in federal student loan debt. President Biden also told the CNN audience that he was not sure he had the authority to forgive student loan debt of $10,000 per borrower through executive action. On Feb. 18, 2021, speaking to reporters at a daily briefing, White House press secretary Jen Psaki said President Biden planned to hold off making any decision on student loan debt until his appointees at the Justice Department have a chance to review the issue.

President Biden also told the CNN audience that he thinks everyone should be able to go to a community college for free and “any family making under $125,000 whose kids go to a state university they get into, that should be free as well.”

Congressional Democrats unveil President Biden’s immigration package

On Feb. 18, 2021, Congressional Democrats introduced President Joe Biden’s legislative package that would overhaul the U.S. immigration system, which includes a pathway to citizenship for individuals enrolled in the Deferred Action for Childhood Arrivals (DACA) program. The U.S. Citizenship Act of 2021 includes language from previous versions of the Development, Relief, and Education for Alien Minors (DREAM) Act proposed by Senators Richard Durbin (D-IL) and Lindsey Graham (R-SC) and would provide an expedited pathway to citizenship for those currently in the DACA program.

Senator Bob Menendez (D-NJ) and Congresswoman Linda Sanchez (D-CA) unveiled the proposal during a virtual press conference, where Senator Menendez said: “It’s our vision of what immigration reform should look like…I love our Dreamers – they are as American as apple pie.”

A copy of the press release, which includes the House and Senate texts of the bill and a recording of the press conference, is found at:
https://www.menendez.senate.gov/newsroom/press/menendez-snchez-introduce-bicameral-us-citizenship-act-of-2021-to-overhaul-american-immigration-system

17 State AGs send letter to House and Senate supporting the use of executive authority to cancel student loan debt

On Feb. 19, 2021, 17 State Attorneys General sent a letter to the House and Senate expressing support for Senate Resolution 46 and House Resolution 100, which calls on President Joe Biden to use executive authority to cancel up to $50,000 in federal student loan debt for all borrowers. The AGs argued that borrowers deserve and need relief from their federal student loan debt and the current repayment system and options for borrowers have proved to be inadequate.

A copy of the letter is found at: https://ag.ny.gov/sites/default/files/multistate_letter_in_support_of_administrative_student_debt_cancellation.pdf

Biden announces Under Secretary of Education

On Feb. 19, 2021, President Biden announced several key hires to the Department of Health and Human Services (HHS), Department of Education, and the Department of Veterans Affairs. James Kvaal is the President’s choice as Under Secretary of Education. James Kvaal is the president of the Institute for College Access & Success. He previously served as the Deputy Domestic Policy Advisor in the Obama-Biden White House. His work on higher education included initiatives to make college tuition more affordable, protecting students from unaffordable loans, and helping more students graduate from college. He also helped write the gainful employment rule and called for greater oversight of for-profit colleges. Mr. Kvaal’s career included senior roles at the Department of Education, the U.S. House of Representatives, and the U.S. Senate.

A copy of the announcement is found at:
https://www.whitehouse.gov/briefing-room/statements-releases/2021/02/19/president-biden-announces-key-nominees-of-his-health-and-human-service-education-and-veteran-affairs-teams/

ED releases FY 2018 draft cohort default rates

On Feb. 22, 2021, the Department of Education distributed the FY 2018 draft cohort default rate (CDR) notification packages to all eligible domestic and foreign schools only. The time for appealing the FY 2018 draft cohort default rates begins March 2, 2021, for all schools.

A copy of the Electronic Announcement is found at: https://ifap.ed.gov/electronic-announcements/022221FY2018DraftCDRDistributedFeb222021

FSA announces updates to StudentAid.gov

On Feb. 22, 2021, Federal Student Aid (FSA) announced the progress it has made on the Next Gen FSA Initiative and StudentAid.gov. The Electronic Announcement summarizes the new and updated features that are now available:

• Direct Loan Entrance Counseling and Direct Loan Exit Counseling have been overhauled to include information presented in smaller modules and integration with the College Scorecard;
• Loan Simulator has been updated to pull additional program level information from the College Scorecard;
• myStudentAid Mobile App has been updated with new features, including access to the Contact Us page;
• TEACH Grant Disclosure Statement is now available electronically; and
• Borrower Defense to Repayment Application is now available in Spanish.

A copy of the Electronic Application is found at: https://ifap.ed.gov/electronic-announcements/022221NextGenFSAStudentAiddotgovWebEnhanceFeb2021

ED reminds institutions to inform students about temporarily expanded SNAP eligibility for students in need

On Feb. 23, 2021, the Department of Education in collaboration with the U.S. Department of Agriculture reminds institutions about the temporarily expanded Supplemental Nutrition Assistance Program (SNAP) eligibility for students in need. Acting Assistant Secretary for Postsecondary Education Michelle Asha Cooper said: “No student should have to worry about where their next meal will come from while balancing their studies. Informing eligible students of these benefits can help ease that uncertainty.”

The Department is also reminding institutions that they have the authority to adjust financial aid packages to account for students’ and families’ current financial circumstances. The outreach efforts align with President Biden’s Jan. 22, 2021, Executive Order directing all federal agencies to address the economic crisis resulting from the pandemic.

On Feb. 23, 2021, Federal Student Aid (FSA) announced that a change in federal law has made more students temporarily eligible for the SNAP benefits. The Electronic Announcement provides information about which students may be eligible under the new, temporary exemptions, what information students or State SNAP agencies may request from institutions of higher education, and where more information is available.

A copy of the press release is found at: https://www.ed.gov/news/press-releases/education-department-amplifies-usda-expansion-snap-benefits-help-students-pursuing-postsecondary-education-during-pandemic

A copy of the Electronic Announcement is found at: https://ifap.ed.gov/electronic-announcements/022321SNAPbenefitseligiblestudsCOVID19pandemic

House passes the FY 2021 budget reconciliation act

On Feb. 27, 2021, the U.S. House of Representatives passed the FY 2021 budget reconciliation act, known as the America Rescue Plan (H.R. 1319). Now, H.R. 1319 will move on to the Senate for its consideration.

On Feb. 9, 2021, the House Education and Labor Committee passed its piece of the budget reconciliation. The bill provides about $40 billion for higher education, including only $395.85 million for students attending for-profit institutions or 1% of the total available. The funding comes as a supplement to the HEERF II funding that was appropriated by the Coronavirus Response and Relief Supplemental Appropriations Act (P.L. 116-260) using the same allocation formula.

Section 2013 of the bill adds “federal education assistance funds” to the 90 portion of the 90/10 rule. This would require institutions to derive not less than 10% of revenue from funds other than Federal education assistance funds, including funding from the GI Bill and the Tuition Assistance funding from the Department of Defense. The Committee rejected an amendment by Ranking Member Virginia Foxx (R-NC) that would have excluded Veteran’s education benefits and Department of Defense Tuition Assistance from being part of the 90/10 calculation.

A copy of the text is found at: https://edlabor.house.gov/imo/media/doc/FY21%20Budget%20Reconciliation%20Budget%20Reconciliation.pdf

A copy of the section-by-section analysis is found at: https://edlabor.house.gov/imo/media/doc/2021-02-08%20FY21%20Budget%20Reconciliation%20Section%20by%20Section.pdf

Chairman Bobby Scott (D-VA) said in his opening remarks that “the budget reconciliation process was an important tool that allows Congress to avoid partisan gridlock.” Ranking Member Foxx said that “the lack of bipartisan negotiations was an insult to the deliberative process of the People’s House.”

A copy of Chairman Scott’s opening remarks is found at: https://edlabor.house.gov/imo/media/doc/Scott%20OS%20020921.pdf

A copy of Ranking Member Foxx’s opening remarks is found at: https://republicans-edlabor.house.gov/news/documentsingle.aspx?DocumentID=407182

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.