Washington News Brief

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

Department of education provides flexibility for college accreditors

The Department of Education announced that it would suspend a series of federal requirements for college accreditors. The Department gave accreditors permission to conduct virtual site visits instead of in-person site visits and the discretion to extend the term of accreditation for a reasonable period during the COVID-19 disaster for an institution that is undergoing renewal of accreditation and was scheduled to have a site visit. Under the new guidance, accreditors that employ virtual site visits would be required to perform a follow-up in-person visit to the campus within a “reasonable period of time” following the virtual site visit.

A copy of the announcement is found at: https://www2.ed.gov/about/offices/list/ope/20-007covid19accreditorsfromomb317s.pdf

Democrats criticize proposal to restructure FSA

Included in the Department of Education’s FY 2021 budget request released on February 10, 2020, is a proposal to evaluate making the office of Federal Student Aid (FSA) a separate organization managed by a board of governors. Secretary of Education Betsy DeVos stated at a press briefing following the release of the FY 2021 budget request that the separation of FSA into a separate agency would depoliticize the student loan financing process. Currently, FSA holds a loan portfolio of almost $1.5 trillion.

However, a Roll Call article of Feb. 25, 2020 reported that the House Education and Labor Chairman Bobby Scott (D-VA) expressed opposition to the concept of a separate FSA. “The Federal Student Aid office should already be putting students at the center of its work and should already be free from political whims. There is nothing that could be done with a new agency that can’t be done today.” The article also reported that the National Association of Student Financial Aid Administrators (NASFAA) supported the concept and believes that it could earn the support of both Republicans and Democrats.

The press release from the Secretary is found at: https://www.ed.gov/news/press-releases/president-trump-proposes-transformative-student-first-budget-return-power-states-limit-federal-control-education

ED releases electronic announcement on enforcement of cybersecurity requirements under the GLBA

On Feb. 28, 2020, the Department of Education issued an electronic announcement regarding enforcement of cybersecurity requirements under the Gramm-Leach-Bliley Act (GLBA), which was signed into law on November 12, 1999, advising institutions that the GLBA requires institutions to have certain information privacy protections and safeguards in place. Institutions agree to comply in its Program Participation Agreement (PPA) with ED and as a condition for accessing ED’s systems in the Student Aid Internet Gateway (SAIG) Enrollment Agreement.

Auditors are expected to evaluate three information safeguard requirements of GLBA in audits:

• Institution must designate an individual to coordinate its information security program.
• Institution must perform a risk assessment that addresses:
  • Employee training and management;
  • Information systems, including network and software design as well as information processing, storage, transmission, and disposal; and
  • Detecting, preventing and responding to attacks, intrusions, or other systems’ failures.
• The institution must document a safeguard for each risk identified in Step 2.

If there is a GLBA audit finding in the institution’s audit, the institution will be referred to the Federal Trade Commission (FTC) to determine what action may be needed. FSA’s Postsecondary Institution Cybersecurity Team will also be informed of the GLBA findings and may request additional information from the institution to assess the level of risk to student data presented by the institution or servicer’s information security system. If the Cybersecurity Team determines that the institution or servicer poses a substantial risk to the security of student information, it may temporarily or permanently disable the institution or servicer’s access to the Department’s information systems or refer the institution to the Department’s Administrative Actions and Appeals Service Group (AAASG) for consideration of a fine or other appropriate administrative action by the Department.

A copy of the electronic announcement is found at: https://ifap.ed.gov/electronic-announcements/022820EnforcCyberReqGrammLeachBlileyAct

Student Privacy Policy Office issues guidance on FERPA questions

In March 2020, the Student Privacy Policy Office issued two notices related to the COVID-19 disaster. Available resources on virtual learning and FERPA are posted as “FERPA and Virtual Learning Related Resources.” In addition, Frequently Asked Questions (FAQs) are available to assist educational institutions in protecting student privacy in the context of COVID-19 as they consider the disclosure of personally identifiable information (PII) from student education records to individuals and entities who may not have access to that information. Under FERPA’s exception for health and safety, if an institution determines that: (1) there is an articulable and significant threat to the health or safety of the student or another individual, and (2) certain parties need the personally identifiable information from education records to protect the health or safety of the student or another individual, then the institution may disclose that information to appropriate parties without first obtaining consent.

A copy of FERPA and Virtual Learning Related Resources is found at: https://studentprivacy.ed.gov/sites/default/files/resource_document/file/FERPA%20%20Virtual%20Learning%20032020_FINAL.pdf

A copy of the FAQs on FERPA & Coronavirus Disease 2019 (COVID-19) is found at: https://studentprivacy.ed.gov/sites/default/files/resource_document/file/FERPA%20and%20Coronavirus%20Frequently%20Asked%20Questions.pdf

ED releases guidance on coronavirus and encourages online courses

On March 5, 2020, which was updated on March 20, 2020, the Department of Education released guidance to address those concerns raised by the higher education community regarding compliance with Title IV of the Higher Education Act, as amended, for students whose activities are impacted by the coronavirus (COVID-19) outbreak. According to the announcement, institutions are encouraged to visit the Department’s webpage frequently as it will post updates as they become available. The Department’s webpage includes links to guidance from the Centers for Disease Control and Prevention, including how colleges and universities should manage human health risks associated with the coronavirus. The March 20, 2020 update contains 10 Frequently Asked Questions that expand on the guidance provided on March 5, 2020.

The Department is encouraging institutions to use online instructional delivery to accommodate students whose enrollment is disrupted by school closures or cancellations and has instituted broad approval to institutions using online technology. The Department is also permitting accrediting agencies to waive their distance education review requirements for institutions and encouraging colleges and universities to enter into temporary consortium agreements with other institutions so that students can complete their courses at other institutions but be awarded credit by their home institution.

The expanded guidance addresses the following topics:

• The flexibility of the March 5, 2020 guidance is applied to new enrollments who begin on or before June 1, 2020;
• FWS students may continue to be paid if its essential faculty and/or staff continue to be paid and the institution continues to meet its institutional wage share requirement;
• Students studying abroad are not prohibited on utilizing distance education to teach U.S. students who are enrolled in U.S. institutions, but are participating in a study abroad program at a foreign institution that is part of a consortium agreement or has a written agreement with the student’s U.S. institution;
• Institutions are not required to reevaluate a student’s cost of attendance if, as a result of COVID-19, the institution issues a refund or waiver of expenses for all or part of a student’s tuition, fees, room and board charges, or other institutional charges;
• Institutions that choose to extend terms that begin on or before June 1, 2020 as a result of the COVID-19 outbreak, are not required to change loan period end dates if the loan period was scheduled to end on the term end date;
• Students may be placed on a leave of absence if a student’s coursework is cancelled as a result of COVID-19 and the student is enrolled in a clock hour program, the student may be placed on an approved leave of absence;
• An institution may offer its clock-hour program in a distance education format if the instruction is supervised by qualified institutional personnel and in most cases, offered synchronously; and
• The timing of a student’s withdrawal determines whether a school must recalculate R2T4 by including or excluding additional break days.

NOTE: Institutions should review the actual guidance directly for information about the topics summarized above.

A copy of the updated electronic announcement is found at: https://ifap.ed.gov/electronic-announcements/030520Guidance4interruptionsrelated2CoronavirusCOVID19

SEVIS guidance is provided for those on F-1 and M-1 Visas

On March 9, 2020, the Student and Exchange Visitor Program (SEVP) issued a notice to all SEVIS users regarding the potential procedural adaptations that could impact F and M nonimmigrant students. The notice recommends that all SEVP-certified schools to advise students traveling from countries impacted by COVID-19 to refer to guidance from the Centers for Disease Control and Prevention (CDC), U.S. Department of State and the U.S. Customs and Border Protection for specific port-of-entry screening processes, as well as any travel restrictions.

The notice indicates that SEVP-certified schools may need to adapt their procedures and policies to address the significant public health concerns associated with the COVID-19 crisis. The notice provides a template to be used for reporting COVID-19 procedural adaptations to SEVP so that SEVP is able to continue to meet its oversight responsibilities. SEVP is not requiring prior notice of procedural adaptations, leaving room for schools to comply with state or local health emergency declarations. However, SEVP states in the notice that it must be notified of procedural adaptations within ten (10) business days of the change.

A copy of the SEVIS announcement is found at: https://www.ice.gov/doclib/sevis/pdf/bcm2003-01.pdf

House Chairman Scott asks ED OIG to investigate ED’s plan to deny full debt relief for defrauded borrowers

On March 9, 2020, House Committee on Education and Labor Chairman Bobby Scott (D-VA) sent a letter to the Department of Education’s Office of Inspector General (OIG) requesting an investigation into the Department’s plan to deny full debt relief for borrowers defrauded by for-profit colleges. Chairman Scott’s request came after multiple independent analyses found that the Department’s plan to provide partial relief to defrauded borrowers was “nonsensical and harmful to students.”

A copy of the press release that includes the text of the letter to the OIG is found at: https://edlabor.house.gov/media/press-releases/chairman-scott-asks-education-department-watchdog-to-investigate-devos-plan-to-deny-full-debt-relief-for-defrauded-borrowers

House passes FREED Vets Act

On March 10, 2020, the House of Representatives passed H.R. 3598, the Federally Requiring Earned Education-Debt Discharges for Veterans (FREED Vets) Act, which would amend the Higher Education Act to require the U.S. Department of Education to automatically discharge the federal student loans of veteran borrowers who are permanently and totally disabled, without any further action by the borrowers. The bill would codify the process of automatically discharging the student loan debt of eligible disabled veterans that resulted from a White House Executive Order of Aug. 21, 2019.

A press release from Congressman Conor Lamb (D-PA), the bill’s sponsor, is found at: https://lamb.house.gov/media/press-releases/house-passes-bipartisan-freed-vets-act-provide-student-loan-debt-forgiveness

House Joint Resolution 76 overturning borrower defense to repayment rule passes House and Senate; President is likely to veto resolution

On March 11, 2020, the U.S. Senate passed House Joint Resolution 76, which uses the Congressional Review Act (CRA) to overturn the Department of Education’s final rule on borrower defense to repayment. The resolution passed by a vote of 53-42, with 10 Republicans in favor. The U.S. House of Representatives passed the resolution in Jan. 2020. House Joint Resolution 76 would nullify the recent changes made to the borrower defense to repayment rule. It now moves to the President, who will likely veto the resolution, and neither the House nor the Senate is expected to be able to override the veto.

OIG announces site visit exemption during COVID-19 outbreak; OMB provides relief for audits for non-profit and public institutions

On March 11, 2020, the Office of Inspector General sent an announcement that it had issued Dear CPA Letter CPA-20-01, which provides for a limited exemption from the site visit requirement during the outbreak of COVID-19 for audits conducted using the Sept. 2016 Audit Guide, Guide for Audits of Proprietary Schools and For Compliance Attestation Engagements of Third-Party Servicers Administering Title IV Programs (Audit Guide).

The OIG letter is found at: https://www2.ed.gov/about/offices/list/oig/nonfed/proprietary.html

A March 19, 2020 Memo (M-20-17) provided relief for non-profit and public institutions by allowing a six-month extension for Single Audit Act auditees. The Memo indicated that the completion and submission of the Single Audit package is six (6) months beyond the normal due date.

A copy of the Memo is found at: https://www.whitehouse.gov/wp-content/uploads/2020/03/M-20-17.pdf

Implementation of 2020 CIP codes in FSA systems

On March 18, 2020, Federal Student Aid (FSA) issued an electronic announcement reminding the higher education community that the U.S. Department of Education’s National Center for Education Statistics (NCES) has updated the Classification of Instructional Programs (CIP) codes for 2020. The 2020 CIP codes list of eligible majors and their corresponding CIP code values is available on the NCES website at: https://nces.ed.gov/ipeds/cipcode

The announcement provides high-level information about operational implementation of the 2020 CIP codes in the FSA systems and describe upcoming communications. For instance, in April 2020, NSLDS enrollment reporting will be updated to allow the reporting of 2020 CIP codes via batch, the NSLDS Enrollment Spreadsheet Submittal process, and the Enrollment Maintenance page of the NSLDS Professional Access website.

A copy of the electronic announcement is found at: https://ifap.ed.gov/electronic-announcements/031820Impl2020CIPCodesFSASystems

ED suspends student loan payments and waives interest during national emergency

On March 20, 2020, the Secretary of Education Betsy DeVos announced that the office of Federal Student Aid is executing on President Donald J. Trump’s promise to provide student loan relief to tens of millions of borrowers during the COVID-19 national emergency.

All borrowers with federally held student loans will automatically have their interest rates set to 0 percent for a period of at least 60 days. In addition, each of these borrowers will have the option to suspend their payments for at least two months to allow them greater flexibility during the national emergency. This will allow borrowers to temporarily stop their payments without worrying about accruing interest.

Secretary DeVos said:

“These are anxious times, particularly for students and families whose educations, careers, and lives have been disrupted. Right now, everyone should be focused on staying safe and healthy, not worrying about their student loan balance growing. I commend President Trump for his quick action on this issue, and I hope it provides meaningful help and peace of mind to those in need.”

The announcement said that Secretary DeVos has directed all federal student loan servicers to grant an administrative forbearance to any borrower with a federally held loan who requests one. The forbearance will be in effect for a period of at least 60 days, beginning on March 13, 2020. To request this forbearance, borrowers should contact their loan servicer online or by phone. The Secretary has also authorized an automatic suspension of payments for any borrower more than 31 days delinquent as of March 13, 2020, or who becomes more than 31 days delinquent, essentially giving borrowers a safety net during the national emergency.

The statement indicated that the Department will work closely with Congress to ensure all student borrowers, including those in income driven repayment plans, receive needed support during this emergency. Any borrower who has experienced a change in income can contact their loan servicer to discuss lowering their monthly payment.

A copy of the Department’s announcement is found at: https://www.ed.gov/news/press-releases/delivering-president-trumps-promise-secretary-devos-suspends-federal-student-loan-payments-waives-interest-during-national-emergency

The Department continues to give important updates and guidance on COVID-19 on its website found at: https://www.ed.gov/coronavirus. The website includes information for higher education institutions such as Coronavirus Information for Students, Borrowers and Parents, which includes questions and answers for borrowers who may have questions when it comes to paying on their federal student loans.

GI Bill benefits to continue under distance education

On March 21, 2020, President Trump signed S. 3503 into law, which is a bill to authorize the Secretary of Veterans Affairs to allow veterans’ GI Bill benefits to continue when previously authorized in-person education programs were converted to distance education programs because of the COVID-19 disaster. Under the bill, GI Bill benefits will continue, including monthly housing allowances and education benefits payments, until in-person classes resume after the pandemic.

Under current rules, students receive GI Bill benefits based on specific programs authorized by the state. In this case, institutions of higher education would have had to obtain state approval for each program offered through online learning or their students would have risked losing their aid since they were not authorized by the state for this purpose. S. 3503 grants the Veterans Affairs Secretary broad authority to ensure education benefits for veterans to continue without disruption during national emergencies.

In addition, under current rules, GI Bill recipients receive monthly stipends from the Department of Veterans Affairs to pay for housing, food and other bills, and these payments are higher for students who attend physical classes as opposed to online coursework. As classes began to move online last week to help prevent the spread of coronavirus, tens of thousands of student veterans faced the possibility of losing their benefits or seeing drastic cuts to their monthly checks. Under S. 3503, GI Bill recipients will be permitted to retain the amount of benefits they received when they started the semester.

The official notice from the White House is found at: https://www.whitehouse.gov/briefings-statements/bill-announcement-89/

A copy of an article on the VA bill from Military.com is found at: https://www.military.com/daily-news/2020/03/17/senate-passes-emergency-bill-protecting-gi-bill-benefits-colleges-go-online.html

ED reminds institutions that when transitioning to distance education because of the COVID-19 disaster, institutions must make distance education accessible to students with disabilities; ED releases webinar and fact sheet for protecting students’ civil rights during COVID-19 response

On March 21, 2020, the Department of Education released a press release advising institutions that as educational institutions transition to distance education, the Secretary of Education reminds them that they must make distance education accessible to students with disabilities. Earlier, on March 17, 2020, the Department of Education announced that the Office of Civil Rights (OCR) and the Department of Education released a webinar on ensuring web accessibility for students with disabilities for schools using online learning during the COVID-19 disaster. OCR provided a fact sheet for education leaders on how to protect students’ civil rights as school leaders take steps to keep students safe and secure. The press release indicated that these resources will assist institutions in making distance learning accessible to students with disabilities and in preventing discrimination during this Administration-wide response effort.

A copy of the March 21, 2020 press release is found at: https://www.ed.gov/news/press-releases/urging-states-continue-educating-students-disabilities-secretary-devos-publishes-new-resource-accessibility-and-distance-learning-options

A copy of the March 17, 2020 press release, which includes the fact sheet, is found at: https://www.ed.gov/news/press-releases/us-department-education-releases-webinar-fact-sheet-protecting-students-civil-rights-during-covid-19-response

Federal and State regulators issue interagency statement encouraging financial institutions to work with borrowers affected by the COVID-19 disaster

On March 22, 2020, Federal financial regulatory agencies and state banking regulators issued an interagency statement encouraging financial institutions to work prudently with borrowers affected by COVID-19 and providing additional information regarding loan modifications. Through the statement, the agencies are encouraging financial institutions to work with borrowers, will not criticize institutions for doing so in a safe and sound manner, and will not direct supervised institutions to automatically categorize loan modifications as troubled debt restructurings.

A copy of the statement is found at: https://files.consumerfinance.gov/f/documents/cfpb_interagency-statement_payment-obligations-covid19.pdf

CFPB releases resources to help consumers protect their finances during the COVID-19 pandemic

On March 24, 2020, the Consumer Financial Protection Bureau (CFPB) announced that it had recently made available several resources to help consumers take steps to protect their finances during the COVID-19 pandemic. The CFPB warns consumers to avoid financial scams and to submit any complaints to the CFPB. CFPB Director Kathy Kraninger stated:

“During this difficult time, the Bureau is doing everything it can to facilitate the work of responsible financial companies supporting their customers and borrowers. We want consumers facing hardships to be aware of this posture and encourage them to discuss their specific circumstances with their lenders. As a backstop, the CFPB stands ready to help consumers resolve issues with their financial services providers through our consumer complaint system.”

A copy of the CFPB announcement is found at: https://www.consumerfinance.gov/about-us/newsroom/media-advisory-cfpb-resources-consumers-during-covid-19-pandemic/

President signs into law the CARES Act, the third COVID-19 bill

After a great deal of long and strained negotiations, the Senate passed on March 25, 2020 by a vote of 96–0, and the House passed on March 27, 2020 by voice vote, the Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748). The President signed the CARES Act into law on March 27, 2020. The $2 trillion bill includes about $14 billion allocated to higher education. According to the press release from the Chairman of the Senate Health, Education, Labor and Pensions (HELP), Lamar Alexander (R-TN), the CARES Act “will help keep Americans healthy, keep paychecks coming for workers, and help relieve financial burdens for Americans hurt by COVID-19.”

Some of the provisions in the CARES Act that provide increased flexibility for students and educational institutions:

• Provides waivers of the institutional matching requirement for campus-based programs and allows institutions to transfer unused work-study funds to be used for supplemental grants;
• Allows institutions to award additional SEOG funds to students impacted by COVID-19. The maximum award amount under the “emergency FSEOG” would be the maximum Pell Grant for the award year ($6,195 for the 2019-20 award year) and any FSEOG awarded under this emergency provision would not be treated as estimated financial assistance (EFA);
• Allows institutions to issue work-study payments to students who are unable to work due to work-place closures as a lump sum or in payments similar to paychecks;
• Excludes from Subsidized Usage Limits any academic period during which a student was unable to remain enrolled because of a qualifying emergency;
• Excludes from lifetime Pell Grant eligibility the term for students who dropped out of school as a result of COVID-19;
• Waives the requirement to return the amount of grant or loan assistance in the case of students who dropped out of school as a result of COVID-19;
• Excludes from the quantitative component of the calculation of SAP any attempted credits that were not completed by a student because of the COVID-19 disaster without requiring an appeal by such student;
• Permits foreign institutions to offer distance learning to U.S. students receiving Title IV funds for the duration of the COVID-19 declaration of disaster;
• Authorizes the Secretary of Education to defer payments on current HBCU Capital Financing loans during the national emergency period so HBCUs can devote financial resources to COVID-19 efforts;
• Requires the Secretary to defer student loan payments, principal, and interest for six months, through Sept. 30, 2020, without penalty to the borrower for all federally owned loans; ceases all involuntary collection activities by the Department of Education during the suspension period. This includes wage garnishment, a reduction of tax refund, and a reduction of any Federal benefit payment by administrative offset;
• Provides participants in the National Service Corps programs with the educational awards they were due to receive before their duties had been suspended or placed on hold during the COVID-19 declaration of disaster;
• Provides local workforce boards with additional flexibility to use funds received under the Workforce Innovation and Opportunity Act for administrative costs, including for online resources, and allows Governors to utilize reserved workforce funds on rapid response activities in response to COVID-19; and
• Provides $14 billion in emergency relief to institutions for expenses related to disruptions in campus operations and to cover costs associated with significant changes to the delivery of instruction due to COVID-19 as well as creates a $3 billion Governor’s Emergency Education Relief Fund for states to make grants to institutions of higher education and local education agencies.

A copy of the press release, which includes a summary, from Senator Alexander is found at: https://www.help.senate.gov/chair/newsroom/press/alexander-sweeping-relief-on-its-way-to-keep-paychecks-coming-for-workers-and-relieve-financial-burdens-for-americans-hurt-by-covid-19

ED directs FSA to stop wage garnishment and collections actions for student loan borrowers

On March 25, 2020, the Secretary of Education announced that as a result of the COVID-19 national emergency, the Department will halt collection actions and wage garnishment to provide additional assistance to borrowers. The flexibility will last for a period of at least 60 days from March 13, 2020. The Secretary said:

“These are difficult times for many Americans, and we don’t want to do anything that will make it harder for them to make ends meet or create additional stress.”

At the Secretary’s direction, the Department has stopped all requests to the U.S. Treasury to withhold money from defaulted borrowers’ federal income tax refunds, Social Security payments, and other federal payments. Additionally, private collection agencies have been instructed to halt all proactive collection activities.

A copy of the Secretary’s press release is found at: https://www.ed.gov/news/press-releases/secretary-devos-directs-fsa-stop-wage-garnishment-collections-actions-student-loan-borrowers-will-refund-more-18-billion-students-families

Earlier, on March 20, 2020, Senate Democrats including Senate Health, Education, Labor and Pensions (HELP) Committee Ranking Member Patty Murray (D-WA), Senate Minority Leader Chuck Schumer (D-NY), and Senators Elizabeth Warren (D-MA), Ron Wyden (D-OR), Dick Durbin (D-IL), and Sherrod Brown (D-OH) sent a letter to the Secretary of Education urging her to use her authority to provide immediate relief to federal student loan borrowers. Secretary of Education DeVos was urged to end the involuntary collection of student loan payments through the garnishment of paychecks, tax refunds, and Social Security benefits; to ensure that federal student loan servicers’ call centers remain open for borrowers; to direct all federal student loan servicers to notify borrowers of their options for repaying their loans; and to ensure that students taking leaves of absence due to the coronavirus pandemic do not trigger loan repayment.

A copy of the Senators’ letter is found at: https://www.help.senate.gov/imo/media/doc/Letter%20to%20ED%20on%20Federal%20Student%20Loans%2019-March-2020.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.