Federal Updates
December 13, 2019 – The Department published its Christmas and New Year’s Day Holiday Processing and Customer Service Hours.
December 13, 2019 – The Department published information regarding Next Gen Website Consolidation happening December 21-22, 2019 which will consolidate some aspects of NSLDS, studentaid.gov, studentloans.gov and FSAid.ed.gov as the Department begins to implement its Next Gen modernization plan.
December 16, 2019 – The Department published information regarding FSA website and system outages planned for December 21, 2019.
December 10, 2019 – The Department published the new Financial Administrator’s Tool Kit, available on the Federal Student Aid E-Training website, offering quick access to Federal Student Aid resources, reference guides, and training material designed to assist financial aid professionals in administering the federal student aid programs in compliance with federal regulations. In addition to providing links to key Federal Student Aid resources, the Tool Kit also includes short videos to assist with navigating several Federal Student Aid products.
Congressional Activity of Note
On December 16, the House and Senate reached agreement on the Fiscal Year 2020 Labor/HHS/Education appropriations bill and a final vote is expected today.
HR 1865 reflecting the agreed upon bill includes a Pell Grant maximum increase of $150 from $6,195 to $6,345 for the 2020-21 school year. The bill also includes language that would provide new accountability measures for federal loan servicers. Our review of the rest of the bill does not indicate any punitive or otherwise harmful provisions for AACS schools or the proprietary sector as a whole.
The Joint Explanatory Statement released accompanying the bill includes language of interest in the form of congressional directives to the Department of Education on various issues. This language will likely be reflected in a final conference report to the final bill. Conference report language does not have the force of law (statute), but it does reflect congressional intent and is meant to urge the agency to act according to the intent of Congress in these areas.
“Ability to Benefit.– The Department shall issue guidance that serves as a simple and clear resource for implementing Ability to Benefit at IHEs, which should restate the updated definition of a career pathway program and contain answers to frequently asked questions about program eligibility.”
"Return of Title IV Funds.– The Department is encouraged to pursue efforts to simplify and streamline the return of title IV funds process for IHEs and students”
“Student Aid Enforcement – The Department shall include information in its fiscal year 2021 Congressional Justification on staffing levels of the Student Aid Enforcement Unit and actions taken by the unit, including the number and type of actions opened, pending, and closed annually.”
“Student Loan Cancellations and Discharges Reporting.– The Department should continue to bolster transparency through the Federal Student Aid Data Center by supplementing current reporting with, at a minimum, semiannual reports beginning no later than 90 days after enactment of this Act, on each of the Federal student loan cancellation and discharge programs. Each report should include the total number of unique borrowers who have applied for a program or have been identified under an applicable data match ("borrowers"), unique borrowers in each applicable status (received, pending, approved, and denied), total loan balance in each applicable status (received, pending, approved, and denied), median amount discharged for each program, and percentage of unique borrowers subject to any partial discharge. The Department should publish disaggregated information by State, as possible, and make such information available publicly on the Department's website.”
House Committee on Education and Labor, Hearing Examining the Education Department’s Implementation of Borrower Defense
On December 12, 2019, Secretary Betsy DeVos testified before the House Education and Labor Committee to address the implementation of the Borrower Defense to Repayment rule and the status of current student claims. The Secretary focused her testimony on the timeline of student claims, the lack of process under the prior administration, the court delays, and the recently adopted framework for processing claims.
DeVos also provided context for the implementation of the 2019 Rule and the application of the 2016 and pre-2016 rule. The borrower defense provisions of the 2019 Rule will apply only to loans first disbursed after July 1, 2020. The Department will enforce the 2016 Rule for all loans disbursed between July 1, 2017 and July 1, 2020. For loans first disbursed before July 1, 2017, the pre-2016 standards apply. That means BDR claims on pre-2017 loans will be adjudicated based using the applicable state standard.
Chairman Scott and Democrats on the Committee focused on the delay in processing claims, the harm caused to students awaiting decisions, and the concept of partial relief. DeVos was sharply criticized for the backlog of borrower defense claims at Federal Student Aid and the “human errors” that led to loans inadvertently taken out of forbearance or stopped collection status.
From a numbers perspective, DeVos revealed that there are now over 300,000 claims on file. The Department is poised to release and process claims under the new framework, including approximately 18,000 claims which will be denied. One major change in the framework involves using a sliding scale based on a borrower’s wages to determine loan forgiveness. Many predict this will result in lower relief to students.
Process
Opening statements from Chairman Scott, Ranking Member Foxx, and Secretary DeVos can be found here.
Recently Introduced Federal Legislation
S.3058 – A bill to amend the Higher Education Act of 1965 to establish fair and consistent eligibility requirements for graduate medical schools operating outside the United States and Canada. Sponsor: Sen. Durbin, Richard J. [D-IL] (Introduced 12/16/2019) Cosponsors: (0) Committees: Senate - Health, Education, Labor, and Pensions
S.3055 – A bill to amend the Higher Education Act of 1965 to permit a Federal student loan borrower to elect to terminate repayment pursuant to income-based repayment and repay such loan under any other repayment plan for which the borrower is otherwise eligible. Sponsor: Sen. Murkowski, Lisa [R-AK] (Introduced 12/16/2019) Cosponsors: (1) Committees: Senate - Health, Education, Labor, and Pensions
S.3054 – A bill to establish that a State-based education loan program is excluded from certain requirements relating to a preferred lender arrangement. Sponsor: Sen. Murkowski, Lisa [R-AK] (Introduced 12/16/2019) Cosponsors: (2) Committees: Senate - Health, Education, Labor, and Pensions
S.3043 – A bill to modernize training programs at aviation maintenance technician schools, and for other purposes. Sponsor: Sen. Inhofe, James M. [R-OK] (Introduced 12/12/2019) Cosponsors: (3) Committees: Senate - Commerce, Science, and Transportation
H.R.5397 – To amend title II of the Higher Education Act of 1965 with respect to partnership grants for the establishment of rural teaching residency programs, and for other purposes. Sponsor: Rep. Bost, Mike [R-IL-12] (Introduced 12/11/2019) Cosponsors: (13) Committees: House - Education and Labor
S.3028 – A bill to amend the Higher Education Act of 1965 to strengthen Federal-State partnerships in postsecondary education. Sponsor: Sen. Reed, Jack [D-RI] (Introduced 12/11/2019) Cosponsors: (1) Committees: Senate - Health, Education, Labor, and Pensions
H.R.5388 – To provide that the Secretary of provide that the Secretary of Education may not issue or enforce certain rules that weaken the enforcement of the prohibition of sex discrimination applicable under title IX of the Education Amendments of 1972. Sponsor: Rep. Slotkin, Elissa [D-MI-8] (Introduced 12/10/2019) Cosponsors: (3) Committee: House Education and Labor
H.R.5368 – Faster Access to Federal Student Aid Act of 2019. Sponsor: Rep. DelBene, Suzan K. [D-WA-1] (Introduced 12/09/2019) Cosponsors: (0) Committees: House - Education and Labor; Ways and Means