Washington News Brief

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

Dr. Miguel Cardona sworn in as Secretary of Education after Senate nomination

On March 1, 2021, the U.S. Senate approved the nomination of Dr. Miguel Cardona to serve as the next Secretary of Education, by a vote of 64-33, and was sworn in on March 2, 2021, by Vice President Kamala Harris. Fourteen Republicans joined the Senate Democrats to approve the nomination. Dr. Cardona was formerly the Connecticut Commissioner of Education. Dr. Cardona previously was a classroom teacher, district administrator, and assistant superintendent in the State of Connecticut. The bipartisan vote for Dr. Cardona was quite different from the contentious confirmation of former Secretary of Education Betsy DeVos four years ago.

Following the nomination of Dr. Cardona, Chair of the Senate Health, Education, Labor and Pensions Committee Patty Murray (D-WA) said:

“From early education to higher education, we need to make sure students and their families have the support they need to not only make ends meet, but to make sure every student can thrive. At this moment of crisis, Dr. Cardona is exactly the leader we need at the Department of Education to tackle these challenges. During his confirmation hearing with the Health, Education, Labor, and Pensions Committee, he demonstrated beyond a doubt that he has the experience, principles, and perspective we need for this critical role.”

A copy of Senator Murray’s remarks is found at: https://www.help.senate.gov/chair/newsroom/press/senate-votes-to-confirm-dr-miguel-cardona-to-serve-as-education-secretary

More than 100 members of the House of Representative wrote to the new Secretary of Education urging him to rescind Title IX regulations

On March 2, 2021, more than 100 members of the House of Representatives sent a letter to the new Secretary of Education Miguel Cardona asking him to rescind the controversial Title IX rules promulgated by former Secretary of Education Betsy DeVos. “These regulations gut the protections for survivors of sexual violence and overburden already-strained schools struggling amid a global pandemic.” The House members ask for a stay of the enforcement of the rules, they ask for the issuance of interim guidance drawn from the earlier guidance [under President Obama] addressing Title IX protections against sexual harassment in schools.

A copy of the House members letter is found at:
https://speier.house.gov/_cache/files/1/b/1be77711-5eae-4bf8-bed0-dd59629db852/0D83F3%5B%E2%80%A6%5D985209850.2021-03-02dwc-title-ix-letter-to-cardona-final.pdf?utm_source=Iterable&utm_medium=email&utm_campaign=campaign_2058080_nl_Daily-Briefing_date_20210303&cid=db&source=&sourceId=

OIG concludes former Secretary of Education DeVos acted appropriately in ACICS case

On March 2, 2021, the Office of Inspector General (OIG) recently released a report titled, “The Department’s Recognition of the Accrediting Council for Independent Colleges and Schools as an Accrediting Agency,” that found the Trump Administration officials “followed applicable policies and regulations” when they took steps in 2018 to reinstate the federal recognition of ACICS. The OIG also concluded that an error in the Trump administration’s report on ACICS “appears to have been an honest mistake made during the editing process and was subsequently corrected when it came to the attention of the Department.”

The report faults, instead, the Obama administration for how it terminated ACICS in 2016, stating that the Administration “did not consider all available relevant information during its review as required.” The report reveals problems described by a federal judge’s 2018 ruling that said Department officials at the time had illegally failed to consider a large tranche of evidence submitted by ACICS.

A copy of the OIG report is found at: https://www2.ed.gov/about/offices/list/oig/auditreports/fy2021/s19t0003.pdf

NACIQI recommends ACICS lose its recognition status

On March 5, 2021, the National Advisory Committee on Institutional Quality and Integrity (NACIQI) recommended that the Accrediting Council for Independent Colleges and Schools (ACICS) lose the Department of Education’s recognition. A senior official in the Department of Education must make a final decision within the next 90 days. ACICS can appeal the result to Secretary of Education Miguel Cardona.

In January, the Department’s staff overseeing accrediting agencies concluded that ACICS had failed to meet federal standards regarding training employees to conduct site visits, failed to address conflicts of interest, and lacked the finances to sustain itself. The career staff also raised concerns about ACICS extending approval to Reagan National University, which had no students, faculty, or classrooms. Questions were also raised about ACICS’ oversight of Fairfax University of America, formerly known as Virginia International University, following a state audit that questioned the institution’s online education programs’ quality and rigor.

ACICS President Michelle Edwards vigorously defended ACICS and said it had been unfairly targeted.

Secretary of Education accepts resignation of FSA COO

On March 5, 2021, Secretary of Education Miguel Cardona accepted the resignation of Federal Student Aid (FSA) Chief Operating Officer (COO) Mark Brown. Secretary Cardona said:

“I accepted the resignation of Federal Student Aid Chief Operating Officer Gen. Mark Brown and thanked him for his service to the U.S. Department of Education. As the nation continues grappling with economic disruptions caused by the COVID-19 pandemic, the need to deliver relief and fortify pathways to the middle class is more urgent than ever. Under my leadership, the Department of Education will work to strengthen college as a reliable pathway to the middle class while protecting students and loan borrowers. In service to our nation’s students, the Department’s Federal Student Aid division will renew its focus on streamlining access to and management of federal financial aid, easing the burden of student debt, and carefully stewarding taxpayer dollars.”

Secretary Cardona said that Robin Minor, the Deputy Chief Operating Officer, will serve as the acting COO of FSA while the Administration searches for a permanent replacement.

President Biden issues Executive Order directing Secretary of Education to reassess Title IX rules

On March 8, 2021, President Joe Biden issued an Executive Order directing the Secretary of Education to reassess the Title IX rules. “Guaranteeing Environment Free from Discrimination on the Basis of Sex, including Sexual Orientation or Gender Identity,” directs Secretary Miguel Cardona to review within 100 days the Department’s rules and policies to make sure they comply with the antidiscrimination policy.

Last May 2020, former Secretary of Education Betsy DeVos reversed the Obama administration’s policies on campus sexual assault and harassment by requiring colleges to hold live hearings and allow for the cross-examination of those alleging sexual misconduct. Former Secretary DeVos believed that the Obama administration guidance in 2011 and 2014 was skewed against the accused.

A copy of the Executive Order is found at: https://www.whitehouse.gov/briefing-room/presidential-actions/2021/03/08/executive-order-on-guaranteeing-an-educational-environment-free-from-discrimination-on-the-basis-of-sex-including-sexual-orientation-or-gender-identity/

Annual Student Loan Acknowledgement requirement delayed

On March 8, 2021, Federal Student Aid (FSA) announced that the requirement that borrowers complete the Annual Student Loan Acknowledgement prior to disbursement will not go into effect for the 2021-2022 award year. FSA explained that the delay is to reduce administrative burden resulting from COVID-19. The Annual Student Loan Acknowledgement process is designed to require student and parent borrowers to view how much they currently owe in federal student loans, and to acknowledge that they have seen the amount before a school can make the first disbursement of the first Direct Loan that a student or parent borrower receives for each new award year. The Annual Student Loan Acknowledgement process will continue to be available on StudentAid.gov.

A copy of the FSA announcement is found at: https://ifap.ed.gov/electronic-announcements/030821AnnualStudentLoanAcknowBorrowerCompletionNotRequired2122AY

FSA provides information about the FSA Partner Connect Access and IFAP Website Transition to Knowledge Center

On March 9, 2021, Federal Student Aid (FSA) sent an announcement about FSA Partner Connect Access and IFAP Website Transition to Knowledge Center. The launch is planned for March 28, 2021. Log ins will not be required for the Knowledge Center, the Federal Student Aid Handbook, HELP Center, or as a means to link to other FSA websites. Log ins will be required for certain FSA systems, such as COD, FAA Access to CPS Online, and the National Student Loan Data System.

President signs the America Rescue Plan Act into Law; Provision modifying the 90/10 rule is included in the bill

On March 10, 2021, the U.S. House of Representatives passed the Senate version of H.R. 1319, the American Rescue Plan Act, by a vote of 220-211, with all Democrats, except for Congressman Jared Golden (D-ME), voting in favor and all Republicans voting in opposition to the FY 2021 Budget Reconciliation bill. The bill was signed into law on March 11, 2021, by President Joe Biden.

On March 6, 2021, the U.S. Senate passed the FY 2021 Budget Reconciliation Bill, which included a modification to the House-passed 90/10 provision. The provision would require all “federal education assistance funds,” which are likely to include certain funds received from the Department of Defense and the Department of Veterans Affairs, to count toward the 90 component of the calculation. Early in the morning of March 6, 2021, the Senate agreed to a bipartisan amendment introduced by Senators Jerry Moran (R-KS) and Tom Carper (D-DE), which would lead to a long-term solution to this contentious issue. The Moran-Carper amendment requires the Department of Education to begin a negotiated rulemaking process no earlier than Oct. 1, 2021, and the amendment may only take effect for fiscal years beginning on or after Jan. 1, 2023.

The Senate bill also includes a provision, starting after Dec. 31, 2020 through Jan. 1, 2027, that would not count any amount discharged from a loan made for postsecondary expenses as income. Therefore, discharged loans would not be taxable. The provision covers loans for postsecondary educational expenses, including federal student loans and certain private education loans.

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). On March 1, 2021, the Senate Parliamentarian ruled that Congressional Democrat’s proposed changes to the 90/10 rule complied with the special rules of budget reconciliation and can be included in the COVID package. The Congressional Budget Office (CBO) estimated that the changes to the 90/10 rule would save $124 million over the next decade, thus showing a direct fiscal impact, as fewer students will ultimately be enrolled in for-profit schools.

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. For-profit institutions would get funds solely for the purposes of providing emergency grant aid for students. 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, but the provision did not specify how or when the Department of Education would implement these changes. This would require institutions to derive not less than 10% of revenue from funds other than Federal education assistance funds, which are likely to include 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.

Department announces action to streamline defense relief process

On March 15, 2021, the Department of Education announced it will streamline debt relief determinations for borrowers with claims approved to date that their institution engaged in certain misconduct. ED will be rescinding the formula for calculating partial relief and adopting a streamlined approach for granting full relief under the regulations to borrower defense claims approved to date. The Department anticipates this change will help about 72,000 borrowers receive $1 billion in loan cancellation.

Under former Secretary of Education Betsy DeVos, the Department determined debt relief based on a formula. If a borrower’s earnings after graduation were two standard deviations below the median for similar programs, the Department granted the borrower full relief. However, if the borrower’s earnings were below the median, but not by two standard deviations, the Department granted 25, 50, or 75% relief.

The Secretary of Education said: “Borrowers deserve a simplified and fair path to relief when they have been harmed by their institution’s misconduct.”

Chairman of the House Education and Labor Committee Bobby Scott (D-VA) applauded the Department’s announcement by saying: “I applaud the Biden administration for doing the right thing by making these borrowers whole and I can only imagine the mixture of joy and relief they are feeling today.”

A copy of the press release is found at: https://www.ed.gov/news/press-releases/department-education-announces-action-streamline-borrower-defense-relief-process

A copy of Congressman Scott’s statement is found at: https://edlabor.house.gov/media/press-releases/

FSA sends alert regarding malicious cyber actors to gain access to Microsoft Exchange servicers

On March 15, 2021, Federal Student Aid (FSA) sent an alert that the Federal Bureau of Investigation (FBI) and the Cybersecurity and Infrastructure Security Agency (CISA) have reports of malicious cyber actors using zero-day exploits to gain access to on-premises Microsoft Exchange servers of U.S. entities as early as January 2021. The alert said threat actors could steal credentials and mailbox data that store and transmit sensitive data such as financial aid and personally identifiable information (PII). To protect the institution, FSA is encouraging each school to strengthen its cybersecurity posture and described various actions that schools could take.

A copy of the alert is found at: https://ifap.ed.gov/electronic-announcements/031521TechSecurityAlertThreatActorsExploitMSExchangeVulnerabilities

Department official says ED is looking at borrower defense to repayment rules and gainful employment rules

On March 16, 2021, Melanie Muenzer, the new Chief of Staff to the Office of the Under Secretary at the Department of Education, participated in an event at the Brookings Institution where she discussed future higher education-related activities. According to an article in Politico, Ms. Muenzer said that the Department is “very acutely aware” of “disproportionate negative impacts” that for-profit institutions have on low-income students and students of color and that the Department is looking at various areas for regulatory action including new and revised borrower defense to repayment and gainful employment rules.

HLC begins to explore ways to assess institutions based on type of institution

On March 18, 2021, the Higher Learning Commission (HLC) announced that it will begin to explore ways to assess colleges and universities based on the type of institution. The standards used to accredit a particular college or university would become more “attentive to the interests, needs, aspirations, and constraints of the sector in which the institution operates.” HLC’s President Barbara Gellman-Danley said: “At its core, differential accreditation will not simply recognize conceptually the diversity and differences among sectors, it will foreground the interests and needs of the various sectors when applying HLC’s requirements of accreditation.”

A copy of HLC’s press release is found at: https://download.hlcommission.org/HLCDifferentialAccreditationPressRelease_2021-03-17.pdf

House of Representatives votes in favor of the American Dream and Promise Act of 2021

On March 18, 2021, the House voted in favor of the American Dream and Promise Act of 2021, by a vote of 229-197. The bill provides a path to permanent residency for young undocumented immigrants known as Dreamers, who were brought to the United States as children and were enrolled in the Deferred Action for Childhood Arrivals (DACA) program. Nine Republicans joined Democrats in supporting the bill, which has a slim chance of passing in the Senate.

Burr and King renew bipartisan effort to reform student loan repayment programs

On March 18, 2021, Senators Richard Burr (R-NC) and Angus King (I-ME) reintroduced the Repay Act, which would reform federal student loan repayment programs. The bill would simplify and streamline the current repayment programs by establishing two, easy-to-navigate repayment plans: a fixed, 10-year repayment plan and a single, simplified income-driven repayment option.

Senator Burr said: “The rise in federal student loan debt has been a cause for concern for years, but the issue has taken on a new urgency given the economic challenges of the coronavirus pandemic.”

A copy of the press release is found at: https://www.burr.senate.gov/press/releases/burr-king-renew-bipartisan-effort-to-reform-student-loan-repayment-programs

Department provides written responses related to CRRSAA

On March 19, 2021, the Department of Education released new guidance on the Higher Education Emergency Relief Fund (HEERF) authorized as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act and later supplemented in the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 and in the American Rescue Plan Act. The guidance addresses three issues:

1. It clarified that HEERF grants may be used for institutional coronavirus-related costs and student expenses dating back to March 13, 2020, which is a change from prior guidance;
2. It clarified that qualified students and immigrants who are in non-credit and dual enrollment programs are eligible for HEERF emergency student aid grants; and
3. It addressed issues related to lost revenue as an allowable use of institutional funds.

A copy of the Secretary’s press release, which includes additional Frequently Asked Questions, is found at: https://www.ed.gov/news/press-releases/us-department-education-announces-additional-assistance-students-and-institutions-through-heerf-grant-program-and-expanded-snap-benefits

OPE clarifies R2T4 guidance related to COVID-19 national emergency

On March 19, 2021, the Office of Postsecondary Education (OPE) provided guidance clarifying the R2T4 guidance related to the COVID-19 national emergency. The announcement indicated that on May 15, 2020, OPE published an electronic announcement announcing waivers of Return of Title IV funds requirements for students affected by the COVID-19 emergency. The announcement reminded institutions that where students were moved from ground-based instruction to distance learning, campus housing or other campus facilities were closed, or other interruptions in instruction occurred during a payment period within the covered period, all students who withdrew during that payment period may be considered withdrawn as a result of the COVID-19 emergency. Otherwise, the institution must obtain a written attestation from the student explaining why the withdrawal was a result of the COVID-19 emergency. The announcement includes examples as illustrations.

A copy of the OPE announcement is found at: https://ifap.ed.gov/electronic-announcements/031921ClarifiR2T4GuidRelated2COVID19NationalEmergency

Department releases SAIHE eligibility criteria and application

On March 29, 2021, the Department of Education published its application for the $113.5 million in Supplemental Assistance to Institutions of Higher Education (SAIHE) grants that were authorized under Sec. 314(a)(3) in the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA) for institutions with the greatest unmet needs due to coronavirus. In the Federal Register Notice, ED establishes the eligibility requirements an institution must meet to be funded under one of the seven absolute priorities. The due date is April 28, 2021.

The Federal Register Notice is found at: https://www.govinfo.gov/content/pkg/FR-2021-03-29/pdf/2021-06527.pdf

Federal judge upholds most of DeVos’ borrower defense rules

According to an article in Politico, U.S. District Judge Lorna Schofield generally ruled in favor of former Secretary of Education Betsy DeVos’ rewrite of the borrower defense to repayment rules, although she rejected the three-year statute of limitations on borrower claims included in the policy. She ruled that the Trump administration had illegally added the three-year deadline for when borrowers must apply for loan forgiveness in some cases. Judge Schofield determined that it was “not a logical outgrowth” of the initial proposal. The article reported that Judge Schofield, an Obama appointee, sent the rules back to the Department of Education “for further proceedings consistent with” her ruling.

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.