Washington News Brief

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

Trump selects DeVos as Education Secretary

On Nov. 23, 2016, President-elect Donald Trump selected Betsy DeVos as Secretary of Education. Ms. DeVos of Grand Rapids, MI accepted the nomination. She currently chairs the American Federation for Children, an advocacy group that has pushed to expand charter schools and school voucher programs that provide families with public money to spend on private school tuition. Mr. Trump’s choice is a signal that he is planning to pursue his campaign pledge to push for school choice. While Ms. DeVos supported Governor John Kasich, she did support Mr. Trump’s selection of Governor Mike Pence as his running mate.

Senator Lamar Alexander (R-TN), Chairman of the Health, Education, Labor and Pensions (HELP) Committee, released a statement on Nov. 23, 2016:

“Betsy DeVos is an excellent choice. The Senate’s education committee will move swiftly in January to consider her nomination. Betsy has worked for years to improve educational opportunities for all children. As secretary, she will be able to implement the new law fixing No Child Left Behind just as Congress wrote it, reversing the trend to a national school board and restoring to states, governors, school boards, teachers, and parents greater responsibility for improving education in their local communities. I also look forward to working with her on the upcoming reauthorization of the Higher Education Act, giving us an opportunity to clear out the jungle of red tape that makes it difficult for students to obtain financial aid and for administrators to manage America’s 6000 colleges and universities.”

How will higher education fair under President Trump?

Much to the surprise of many, Donald Trump was elected president on Nov. 8, 2016 and the Republicans maintained control of the House and Senate. With regard to higher education, both parties have said that the reauthorization of the Higher Education Act is a priority in the next Congress. In the Senate, Senator Lamar Alexander (R-TN), the current chair of the Senate Committee on Health, Education, Labor and Pensions (HELP), and Senator Patty Murray (D-WA), the current ranking member of the HELP Committee, both return to the Senate. The HELP Committee has been considering a number of higher education issues, including risk-sharing proposals (“skin in the game” measures). Senator Marco Rubio (R-FL) returns to the Senate and he has called for alternatives to traditional higher education and is a supporter of the for-profit sector. Senator Rubio also supports outcomes-based accreditation.

On the House side, Congresswoman Virginia Foxx (R-NC) is expected to become the chair of the House Education and the Workforce Committee. Currently, John Kline (R-MN) is the Chair and is retiring at the end of this session. Congresswoman Foxx is currently the Chair of the House Subcommittee on Education and Workforce Training.

No one knows what the Trump Administration’s vision is for higher education since it was not until October when President-elect Trump devoted a portion of a speech to higher education. At that time, he said he was concerned about high student debt levels and endorsed income-based repayment systems. Mr. Trump proposed enrolling all borrowers in a plan that would cap monthly student loan payments to 12.5 percent of their income and forgive all remaining debt after 15 years. In his speech, President-elect Trump said: “If the federal government is going to subsidize student loans, it has a right to expect that colleges work hard to control costs and invest their resources in their students.”

Many of the prognosticators suggest that the most significant changes in a Trump administration would be the repeal of regulations that target for-profit colleges. Policy experts have suggested that the Trump administration could change the Gainful Employment rules or the Borrower Defense to Repayment rules and perhaps choose not to remove federal recognition from ACICS. In addition, the new administration could choose not to enforce some laws and regulations as stringently, such as its guidance on handling sexual assault under Title IX.

How far President-elect Trump goes depends on how willing he is to invest time and political capital in higher education issues. Only time will tell!

House Democrats urge protection of Pell Grant funding

On Nov. 1, 2016, more than 120 House Democrats urged appropriations leaders to protect Pell Grant funding and not redirect surplus away from federal student aid. The letter states: “The surplus rescissions of $1.2 billion and $1.3 billion in the Senate and House FY 2017 Appropriations bills, respectively, threaten Congress’ ability to meet future needs of students. While the current fiscal climate makes the Pell Grant surplus an attractive funding vehicle for Congressional priorities outside of the Pell Grant program, we write to remind you that this funding is intended to serve the postsecondary educational needs of our nation’s low-income students.” The letter goes on to recommend that the appropriators use the surplus to lessen the burden of college costs for needy students by restoring year-round Pell Grants and by increasing the maximum discretionary award by restoring the annual inflation adjustment to the Pell Grant, which has expired. The value of the Pell Grant will go down without the annual inflation adjustment to the Pell Grant. The letter concludes by stating that “[b]oth restoration of year-round Pell and an increase in the maximum discretionary award in the FY 2017 appropriations vehicle will bolster efforts during reauthorization of the Higher Education Act to safeguard the value of Pell for current and future students, all while preserving enough program surplus funding to guarantee solid financial standing of the program for future years.”

A copy of the letter is found at: http://democrats-edworkforce.house.gov/imo/media/doc/Pell%20Letter.pdf

White House announces new measures to help veterans

On Nov. 14, 2016, the White House issued a presidential memorandum that announced new measures to help veterans, uniformed personnel and their families leverage the use of federal education benefits. The Department of Education’s Federal Student Aid (FSA) will work with the Veterans Affairs Department, the Department of Defense, and the Department of Homeland Security to develop, launch, and evaluate a pilot program that seeks to provide counseling support as well as to inform soldiers on the availability of educational and training programs. Federal agencies will also work to advance data sharing efforts among federal agencies in order to increase transparency and facilitate access to career outcomes, such as student default rates, median loan debt, and education attainment of veterans and service members who use the GI Bill and who also borrow federal student loans. Other measures cited in the memo include the use of online tools to make it easier for prospective students to evaluate programs, the promotion of military apprenticeship programs, amendment of the Post-9/11 GI Bill to ensure that veterans are fairly charged for credentialing and licensing tests, and the development of standards to safeguard veterans from fraudulent marketing of educational services and benefits.

A copy of the White House press release is found at: https://www.whitehouse.gov/the-press-office/2016/11/11/fact-sheet-five-years-joining-forces-call-action-americans-support

A copy of the Fact Sheet: Ensuring Veterans Have the Tools to Succeed is found at: https://www.whitehouse.gov/the-press-office/2016/11/11/fact-sheet-ensuring-veterans-have-tools-succeed

Congressional Research Service outlines Obama rules eligible for Congressional Review Act

On Nov. 17, 2016, the Congressional Research Service released a memo that indicated that regulations submitted to Congress after May 30, 2016, would be subject to review under the Congressional Review Act (CRA). According to the memo, the rule has only been used once to block a Department of Labor regulation in 2001 issued by the Clinton administration. The joint resolution was signed by the newly-elected President George W. Bush. The memo states that the CRA is a tool that Congress may use to overturn a rule issued by a federal agency, including rules issued by a previous President. This could include the Borrower Defense to Repayment rule since it was published on Nov. 1, 2016.

A copy of the memo is found at: https://fas.org/sgp/crs/misc/major-rules-cra.pdf

Department releases earnings data for GE programs

On Nov. 17, 2016, the Department of Education released earnings data for programs leading to gainful employment. The earnings data are from the 2014 calendar year and is available for informational purposes only. Information on the earnings data spreadsheet includes OPEID and institution name, program identifiers (CIP code, credential level, and CIP program name), the number of completers matched with earnings data by the Social Security Administration (SSA), along with the median and mean SSA earnings for each GE program.

The Department reported the following conclusions in a press release issued on Nov. 11, 2016:

• Overall, mean earnings of graduates from public undergraduate certificate programs are almost $9,000 higher than mean earnings of graduates of for-profit undergraduate certificate programs;
• Graduates of certificate programs at public institutions are more likely to have attended programs that provide training in higher earning fields, such as nursing, than graduates of certificate programs at for-profit colleges; and
• Thirty-two percent of for-profit certificate students graduated from programs where the typical graduate earned less than what a full-time minimum wage worker earns in a year ($14,500), compared with only 14 percent in the public sector.

This data will be used to calculate the debt-to-earnings rates that will “determine whether a career college program is serving students well or leaving them with unaffordable debts and poor employment prospects.”

A copy of the press release is found at: http://www.ed.gov/news/press-releases/education-department-releases-new-graduate-earnings-data-career-college-programs

A copy of the Gainful Employment Fact Sheet is found at: http://www2.ed.gov/documents/press-releases/ge-fact-sheet-online.pdf

Information on GE rates is also available on the Department’s data center at: https://studentaid.ed.gov/sa/about/data-center/school/ge?src=press-release

In a press release on Nov. 17, 2016, Steve Gunderson, President and CEO of CECU, said that the data was taken out of context:

“It is absolutely absurd to compare totally different fields of study and suggest that programs traditionally taught in public institutions have higher incomes than programs taught in proprietary colleges. This reflects the continuing ideological bias of this Department against our sector and is yet another example of why Americans are tired of out-of-touch bureaucrats in Washington.”

Six federal agencies join to release joint guidance and resources to improve college access and completion

On Nov. 15, 2016, the Department of Education and five other federal agencies – the Department of Agriculture, the Department of Health and Human Services, the Department of Housing and Urban Development, the Department of Labor, and the Department of Treasury – announced a joint commitment to provide guidance and resources geared to supporting college access and college completion. According to the press release, “These efforts will help break down critical barriers many Americans face in accessing the knowledge and skills needed to get a well-paying job, support their families, and contribute to the community.” The resources and guidance provide assistance in supporting unaccompanied homeless youth through FAFSA completion, helping students find high quality and affordable child care, and determining food stamp income eligibility from the Department of Agriculture.

A copy of the press release is found at: http://www.ed.gov/news/press-releases/%E2%80%9Camerica%E2%80%99s-path-progress-has-long-depended-our-nation%E2%80%99s-colleges-and-universities-%E2%80%93-and-today-%E2%80%99s-more-true-ever-when-college-degree-increasingly-ticket-21st-century-careers-and-secure-middle-c

A copy of the joint commitment made by the six federal agencies in “Aligning Federal Supports and Program Delivery for College Access & Completion” is found at: http://www2.ed.gov/documents/press-releases/federal-supports-college-access-completion.pdf

Department publishes Borrower Defense to Repayment regulations

On Nov. 1, 2016, the Department of Education published the final regulations on borrower defense to repayment with the goal of protecting student borrowers against “misleading predatory practices by postsecondary institutions” and to clarify the process for loan forgiveness in cases of institutional misconduct. According to the Department, the new regulations will protect borrowers and taxpayers and hold institutions accountable by:

• Giving borrowers access to clear, consistent, fair, and transparent processes to file claims;
• Empowering the Secretary to provide debt relief to borrowers without requiring individual applications in cases of widespread misrepresentations;
• Safeguarding taxpayers by ensuring financially troubled institutions provide the government with protection against the risks they create and holding institutions whose actions lead to discharges of federal student loans responsible;
• Helping students make more informed decisions by requiring proprietary schools with poor loan repayment outcomes to include a plain-language warning in their advertising and promotional materials;
• Making sure affected borrowers have information about loan discharge when institutions close and access to an automated process; and
• Banning institutions from inducing students to sign pre-dispute arbitration agreements waiving their rights to go to court and bring class action lawsuits based on borrower defense claims.

Following the request from bipartisan members of Congress, the Department also announced plans in its press release to restore semesters of Pell Grant eligibility for qualified students who were unable to complete their programs because their institution closed. This initiative is important because students have a limited number of semesters in which they can receive Pell Grants to continue their education.

Finally, the Department’s Borrower Defense Unit published its first periodic report, taking over responsibilities from the duties previously assigned to the special master. The report provides updated data on borrower defense claims received and announces the approval of more than 11,000 new claims based on agency findings concerning Corinthian Colleges’ misleading placement claims. To date, over 15,000 claims have been approved with a combined outstanding loan balance for more than $247 million.

A copy of the final regulations is found at: https://ifap.ed.gov/fregisters/attachments/FR110116.pdf

A copy of the press release of Oct. 28, 2016 is found at: http://www.ed.gov/news/press-releases/us-department-education-announces-final-regulations-protect-students-and-taxpayers-predatory-institutions

A copy of the report that provides updated numbers on borrower defense claims processed following the Corinthian Colleges closure is found at: http://www2.ed.gov/documents/press-releases/borrower-defense-report.pdf

A copy of the summary of the regulations released by the Department is found at: http://www2.ed.gov/documents/press-releases/borrower-defense-final-regulations.pdf

ED issues 2017-2018 Financial Aid Shopping Sheet

On Nov. 14, 2016, the Department of Education released the updates, HTML specifications, and the Institutional Metric Data file for the 2017-2018 Financial Aid Shopping Sheet. The Financial Aid Shopping Sheet is required to be used as the award notice or as a supplement to the award notice for veterans and service members receiving Title IV student assistance funds. In July 2012, the Department released the Financial Aid Shopping Sheet format and asked institutions to voluntarily commit to supplying the Shopping Sheet to students. As of September 2016, more than 3,000 postsecondary institutions have reported their commitment to adopt the Financial Aid Shopping Sheet for all of their students.

A copy of the Nov. 14, 2016 announcement is found at: https://ifap.ed.gov/eannouncements/111416FinancialAidShoppingSheet20172018.html

ED imposes fine on Penn State University of almost $2.4 million for Clery violations

On Nov. 3, 2016, the Department of Education announced that it is seeking to impose on Penn State University a record fine of $2.4 million for failing to comply with the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act after a comprehensive review prompted by on-campus sex offenses involving a former assistant football coach, Jerry Sandusky. The fine covers 11 findings of Clery Act noncompliance related to the University’s handling of Sandusky’s crimes and the University’s failure to comply with federal requirements on campus safety and substance abuse.

A copy of the press release is found at: http://www.ed.gov/news/press-releases/us-department-education-levies-historic-fine-against-penn-state-over-handling-sexual-misconduct-incidents

OIG releases its annual report

On Nov. 16, 2016, the Office of Inspector General (OIG) released its annual report that outlines the areas its investigators and analysts will focus in the coming year. The first four goals focus on promoting the economy, efficiency, and effectiveness and preventing and detecting waste, fraud, and abuse. The fifth goal focuses on the internal functions of the OIG. The specific goals are:

• Improve the Department’s ability to effectively and efficiently implement its programs;
• Strengthen the Department’s efforts to improve the delivery of student financial assistance;
• Protect the integrity of the Department’s programs and operations;
• Contribute to improvements in Department business operations; and
• Strive for diverse and skilled workforce that is provided with the means and assistance necessary to achieve the OIG’s mission.

Within these goals, the OIG plans to target:

• The Department’s oversight of state special education programs;
• The Department’s management of financial aid pilot projects through its experimental sites authority;
• The Department’s effectiveness of how it evaluates college accreditors; and
• Whether the Department appropriately resolves student loan complaints.

A copy of the annual report is found at: http://www2.ed.gov/about/offices/list/oig/misc/wp2017.pdf

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.