White House Releases Budget Proposal for FY 2025

On March 10, 2024, the White House Office of Management and Budget released the President’s budget request for FY 2025.  The budget request for the Department of Education includes $82.4 billion in discretionary funding, a $3.1 billion or 4.0 percent increase from the FY 2023 approved level.  The budget request includes the following items:

  • Pell Grants: The budget proposes a maximum Pell Grant award of $8,145, which is a $750 increase over the 2024-2025 award year, for students attending public and nonprofit institutions and a $7,495 maximum Pell Grant award for students attending for-profit institutions.  The first $100 of the increase is funded via discretionary spending while the additional $650 increase that only goes to students at public and nonprofit institutions is funded with mandatory appropriations.
  • Campus-Based Aid Programs: The budget level funds the Federal Work-Study (FWS) and Supplemental Educational Opportunity Grant programs at $1.23 billion and $910 million respectively.
  • Free Community College: The budget proposes $90 billion for a free community college program.
  • Subsidized Tuition: The budget proposes $30 billion for a program that would provide two years of subsidized tuition for students from families earning less than $125,000 enrolled in four-year Historically Black Colleges and Universities (HBCUs), Tribally-Controlled Colleges and Universities (TCCUs), and Minority-Serving Institutions (MSIs).  Both of these programs have been proposed in previous budgets.
  • Loan Origination Fees: The budget proposal would eliminate origination fees on federal student loans.

Secretary of Education Miguel Cardona said in a press release that the Biden’s 2025 proposal “raised the bar in education.”  He went on to say:  “Through this budget, the President prioritizes fiscal responsibility while making bold strides to narrow opportunity and achievement gaps.”

A copy of the press release is found at: https://www.ed.gov/news/press-releases/statement-secretary-cardona-presidents-fiscal-year-2025-budget.

Chairwoman of the House Education and the Workforce Committee Virginia Foxx (R-NC) said:

“A trimmed, fiscally sound budget is what the American people both deserve and demand – not a budget, like what the president is peddling, that treats taxpayer dollars as if they were nothing more than Monopoly money.  With the imperative of delivering unfettered accountability to the American people in mind, we must chart a more fiscally judicious path than the one that the president intends to take this nation down.”

A copy of the press release is found at: https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=410262.

Democratic Senators Send Letter to Secretary Cardona Expressing Concerns Over the FAFSA Rollout

On March 6, 2024, Senate Democrats, led by Alex Padilla (D-CA) and Senate Health, Education, Labor, and Pensions Chairman Bernie Sanders (I-VT, sent a letter to the Secretary of Education Miguel Cardona expressing concerns over the Department of Education’s rollout of the new FAFSA.  The Senators expressed concerns about the Department’s plan to address the ongoing error that does not allow for contributors without a Social Security Number (SSN) to complete the FAFSA, the impact of the error, and how any remedies will be communicated in a culturally relevant manner to impacted students, institutions of higher education, and other student financial aid stakeholders.  The Senators asked the Secretary to respond to a series of questions regarding the timeline for fixing the SSN issue.

A copy of the press release, which includes the text of the letter, is found at: https://www.padilla.senate.gov/newsroom/press-releases/padilla-sanders-voice-concerns-over-fafsa-form-error-harming-students-in-mixed-status-families/.

Stopgap Funding Bill Includes FAFSA Fix

On February 29, 2024, Congressional leaders agreed to a deal to continue funding the federal government until March 8th for six federal departments and March 22nd for the other federal departments, including the Department of Education.

The agreement provides just under $8 billion in new funding for the Pell Grant program through FY 2027, with additional funding in subsequent years.  This new funding is intended to cover the increased costs that will result from the changes ED is implementing to make more students eligible for more financial aid.  Without the additional funding, the Pell Grant program funding may have resulted in a shortfall as soon as FY 2025.

In addition, the stopgap measure provides a statutory fix for language included in the FAFSA Simplification Act that did not set limits on the calculation of aid eligibility for certain students.  On February 27, 2024, ED had issued a notice outlining how it planned to address this oversight, which would have resulted in some students being made eligible for significantly more aid than Congress intended.  With the stopgap measure, Congress included language that limits this provision, which will produce savings in the bill to help pay for the new Pell Grant funding.

A copy of the Department’s earlier announcement is found at:  https://www.ed.gov/news/press-releases/us-department-education-announces-updates-and-additional-preparation-support-2024%E2%80%9325-fafsa-implementation.

Chairwoman of the House Education and the Workforce Committee Virginia Foxx (R-NC) said that the expansion of student aid eligibility would have crippled the Pell Grant program.  “Today’s responsible CR puts a stop to the Department of Education’s reckless action, while still enabling students to get the financial aid information they need in a timely fashion and ensuring the Pell Grant is stable in the future for families truly in need.”

A copy of Chairwoman Foxx’s press release is found at: https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=410204.

Ranking Member of the House Education and the Workforce Committee Bobby Scott (D-VA) disagreed.  “The language included in the Continuing Resolution is not in the spirit of the original intent of the FAFSA Simplification Act.”

A copy of Ranking Member Scott’s press release is found at: https://www.publicnow.com/view/7D0BE308FE7B021B0CCF64A7994BC4E85FE0F3C3.

House Pulls Bipartisan Workforce Pell Act from Voting Schedule

On February 29, 2024, the House of Representatives had planned to vote on the Bipartisan Workforce Pell Act (H.R. 6585), a bill that would extend Pell Grants to short-term career training programs.  It was unexpectedly pulled from the schedule due to widespread concerns from higher education groups.  The bill also faced opposition from the Congressional Progressive Caucus, the American Federation of Teachers, the National Education Association, and other groups.

Higher education groups were concerned because of the offset that was proposed to fund the bill.  The offset would have created a risk-sharing component targeted at institutions subject to the endowment tax that would require them to pay a penalty each year that is equal to all of the unpaid or forgiven loans of their recent students.  The offset language did not give institutions the authority to limit student borrowing.  Requiring institutions to share the risk without allowing them to control loan borrowing could make it more difficult to enroll students who would be at higher risk of defaulting or having their loans forgiven.

Chairwoman Foxx Issues Statement in Response to the Biden Administration’s Transferring of $1.2 Billion in Student Loan Debt to Taxpayers

On February 21, 2024, Chairwoman of the House Education and the Workforce Committee Virginia Foxx (R-NC) issued a statement in response to the Biden Administration’s transferring of $1.2 billion in student loan debt to taxpayers through the income-driven repayment plan, the Savings on A Valuable Education (SAVE) plan:

“If “President Biden spent half as much time working to address the root causes of our broken student loan system as he does peddling his illegal free college agenda, college costs would be lower, the student loan repayment process would be simpler, and students and families would be able to fill out the FAFSA.”

“Unfortunately, Biden believes that more government dependence means more votes come election day – and as a result – has focused his time and energy on harmful initiatives to bolster his ratings.”

“Don’t be fooled by this administration’s so-called free college agenda.  It means less money in the pockets of hardworking taxpayers, more debt, and a continuing decline of an already failing student loan system.”

A copy of the press release is found at: https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=410165.

Ranking Member Cassidy States that Biden Prioritizes Implementing Student Loan Schemes to Buy Votes Rather than Implementing the New FAFSA

On February 21, 2024, Ranking Member of the Senate Health, Education, Labor, and Pensions Committee Bill Cassidy, MD (R-LA) released a press release following the Biden Administration’s announcement that it was transferring an additional $1.2 billion in student loan debt onto taxpayers.  Rather than properly implementing the new FAFSA, Ranking Member Cassidy stated that the Biden Administration has “spent a considerable amount of time prioritizing their student loan schemes to shift someone else’s debt onto taxpayers who chose not to go to college or already paid off their loans.”

A copy of the press release is found at: https://www.help.senate.gov/ranking/newsroom/press/ranking-member-cassidy-on-biden-shifting-another-12-billion-in-student-debt-onto-taxpayers.

Democratic Senators Send Letter to Secretary of Education Urging ED to Revise Regulations Regarding Parent PLUS Loans

On February 15, 2024, nine Democratic Senators, led by Senator Chris Van Hollen (D-MD), sent a letter to Secretary of Education Miguel Cardona urging him to revise ED’s current regulations regarding Parent PLUS Loans.  The letter cited “deep concerns that Parent PLUS borrowers have been left out of key student loan actions the Administration has taken.”  The Senators asked the Department to expand eligibility for more generous income-driven repayment plans to Parent PLUS borrowers.  The letter noted that the Parent PLUS Loan program now disproportionately burdens low-income families, particularly those of color, although the Parent PLUS Loan program initially was intended to assist high-asset families.

A copy of the press release, which includes the text of the letter, is found at: https://www.vanhollen.senate.gov/news/press-releases/van-hollen-colleagues-urge-biden-administration-to-expand-student-debt-relief-for-parent-borrowers.

House and Senate Democrats Ask Secretary of Education for an Explanation of his Plans to Send Federal Financial Aid Data to Institutions to Help Students Get the Aid They Need

On February 12, 2024, over 100 House and Senate Democrats, led by Senate Health, Education, Labor, and Pensions Committee Chairman Bernie Sanders (I-VT) and House Education and the Workforce Committee Ranking Member Bobby Scott (D-VA) sent a letter to Secretary of Education Miguel Cardona asking him to explain the Department of Education’s plans to send federal financial aid data to colleges and universities to help students get the benefits they need under the new 2024-2025 FAFSA.  The members wrote:  “Any delays in financial aid processing will most impact the students that need aid most.  For institutions to support students’ ability to make informed decisions about their future, they need clear guidance and resources from the Department immediately on any and all next steps.”

The Democratic members also asked how the Department plans to communicate any further delays in processing the new FAFSA, and asked what specific date the Department plans to send FAFSA data to institutions and communicate with students, families, and counselors about the delay.

A copy of the press release, which includes the text of the letter, is found at: https://bobbyscott.house.gov/media-center/press-releases/scott-sanders-murray-and-106-colleagues-urge-department-education.

ED Concludes Negotiated Rulemaking on Institutional Quality and Program Integrity

On March 7, 2024, the Department of Education completed the final negotiated rulemaking session of its Institution Quality and Program Integrity Committee tasked with examining federal rules on accreditation, cash management, state authorization, distance education, return of Title IV, and the Federal TRIO program.  The Committee only reached consensus on the Department’s regulatory proposal to expand Federal TRIO program access to undocumented students.  The negotiation sessions were at times acrimonious with many of the institutional negotiators questioning the Department’s reasoning for its proposals.  Without consensus, the Department will be able to draft its own Notice of Proposed Rulemaking (NPRM) on all of the issues, except for the TRIO proposal.

Department of Education Imposes $14 Million Fine Against Liberty University Because of Clery Violations

On March 5, 2024, the Department of Education announced that Federal Student Aid (FSA) would impose a $14 million fine as a result of a settlement agreement with Liberty University for ongoing violations of the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act.  The agreement requires Liberty University to spend $3 million over the next two years for on-campus safety improvements and compliance enhancements.  The Department will also conduct post-review monitoring of Liberty University through April 2026 to ensure that the institution executes on promised improvements.  In May 2023, FSA’s Clery Group issued a program review report identifying significant violations of the Clery Act by Liberty University.

The Final Program Review Determination upheld 11 findings in the program review report.  Some of the findings include failure to identify and notify campus security authorities and to establish an adequate system for collecting crime statistics from all required sources, failure to issue emergency notifications, and failure to publish and distribute an Annual Security Report.

A copy of the press release is found at:  https://www.ed.gov/news/press-releases/us-department-education-imposes-14-million-fine-against-liberty-university-clery-act-violations.

FSA Announces Release of FY 2021 Draft Cohort Default Rates

On February 26, 2024, Federal Student Aid (FSA) announced the distribution of the FY 2021 draft cohort default rates to all eligible domestic and foreign students.  The announcement said that the time for appealing the FY 2021 draft cohort default rates under 34 C.F.R. Part 668 began on March 5, 2024, for all schools.

The electronic announcement is found at: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2024-02-26/fy-2021-draft-cohort-default-rates-distributed-feb-26-2024.

ED Approves $1.2 Billion in Loan Forgiveness for Over 150,000 SAVE Plan Borrowers

On February 21, 2024, the Biden-Harris Administration announced that it will automatically discharge $1.2 billion in loans for almost 153,000 borrowers who are eligible for the shortened time to forgiveness benefit under President Biden’s Saving on A Valuable Education (SAVE) Plan.

Secretary of Education Miguel Cardona stated:  “With today’s announcement, we are once again sending a clear message to borrowers who had low balances:  if you’ve been paying for a decade, you’ve done your part, and you deserve relief.”

President Biden announced in January that his Administration was accelerating the shortened time to forgiveness component of the SAVE Plan nearly six months earlier than planned in order to provide borrowers the relief they have earned as quickly as possible.  For a borrower to be eligible for this forgiveness, they must be enrolled in the SAVE Plan, have been making at least 10 years of payments, and have originally taken out $12,000 or less for college.  For every $1,000 borrowed under $12,000, a borrower can receive forgiveness after an additional year of payments.  All borrowers on SAVE receive forgiveness after 20 or 25 years, depending on whether they have loans for graduate school.  The benefit is based upon the original balance of all Federal loans borrowed to attend school, not what a borrower currently owes or the amount of an individual loan.

A copy of the press release is found at:  https://www.ed.gov/news/press-releases/biden-harris-administration-approves-12-billion-loan-forgiveness-over-150000-save-plan-borrowers.

ED Announces Latest Steps to Support Schools and Students with New 2024-2025 FAFSA

On February 13, 2024, the Department of Education announced additional steps to help colleges prepare to process 2024-2025 FAFSA forms as efficiently as possible.  According to the press release, the new steps will make it easier for schools to process records and spend more time helping students by considerably reducing verification requirements, suspending routine school compliance reviews, and providing flexibility on renewing participation in the federal student aid programs.  In addition, the Department will release test versions of Institutional Student Information Records (ISIRs) for schools to prepare their systems.

  • Significantly reducing verification requirements. This year, ED will be significantly reducing verification requirements, while continuing to focus on avoiding identity fraud.  With the implementation of the new FAFSA, ED is receiving the vast majority of income data directly from IRS, which will not have to be verified.  This year’s significant reduction in verifications will reduce the burden for educational institutions while continuing to protect against fraud.
  • Suspending new routine program reviews. The Department will suspend all new program reviews through June 2024, except for those related to the most serious issues like suspected fraud or a sever breach of fiduciary duty.  Institutions with an ongoing program review can also request extensions for responses to program reviews, reports, or requests for additional documentation.  This flexibility will significantly reduce the time that colleges’ financial aid officers need to devote to producing documentation and responding to Department inquiries during the time they need to focus on quickly getting aid award offers to students.
  • Providing additional flexibility on recertification. Institutions are currently required to recertify eligibility for the Department’s federal student aid programs no later than 90 days before their Program Participation Agreement (PPA) expires.  The Department will waive that 90-day requirement for schools whose PPA expires in March, June, or September 2024, which allows schools until their expiration day to submit a recertification application.  Providing this flexibility will give time back to institutions at a critical moment and enable them to focus their resources on getting students the aid they need.

These steps will build upon the work underway to support colleges and students through the Department’s FAFSA College Support Strategy:

  • Deploying federal personnel. The Department’s Office of Federal Student Aid (FSA) is deploying teams of federal experts to under-resourced schools, including HBCUs and TCUs.
  • Dedicating funding to provide technical assistance and support. The Department is allocating $50 million in federal funding that will be providing to non-profit groups specializing in financial aid support and services.  These groups will use these funds to recruit financial aid professionals to provide additional technical assistance and support beyond the federal teams deployed by the Department.
  • Delivering test student financial aid records by the end of the week. By February 16th, ED began to release test versions of Institutional Student Information Records (ISIRs).  These test files will enable colleges and their critical partners to prepare their systems and processes to efficiently assemble aid packages.  ED will also provide open-source tools to support institutions using test ISIRs.

A copy of the press release is found at:  https://www.ed.gov/news/press-releases/us-department-education-announces-latest-steps-support-schools-and-students-better-fafsa%C2%AE.

An Electronic Announcement (GEN-24-11) of February 13, 2024 describing the 2024-2025 award year flexibilities is found at: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2024-02-09/additional-information-fafsa-college-support-strategy.

An Electronic Announcement (GEN-24-09) of February 9, 2024 describing additional information on the FAFSA College Support Strategy is found at:  https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2024-02-09/additional-information-fafsa-college-support-strategy.

FSA Reaches Settlement Agreement with IEC for Student Aid Eligibility Violations

On February 8, 2024, the Department of Education announced that a settlement agreement was reached with the for-profit institution International Education Corporation (IEC) and its subsidiaries, Florida Career College (FCC) and United Education Institute (UEI) related to violations of the ability-to-benefit (ATB) test regulations.  In 2023, a Department of Education investigation found that FCC routinely broke the rules governing how schools can administer ATB tests.  Among other issues, the Department found that FCC and senior leaders of IEC pressured proctors to pass students and inappropriately influenced test outcomes to boost enrollment of students who receive federal student aid.

The settlement finalizes the Department’s termination of FCC’s participation in the federal student aid programs.  In addition, the settlement limits UEI/UEIC’s continued participation in the federal student aid programs by imposing strict conditions for three years.  In addition, the settlement requires the separation of IEC’s chief executive officer and chief financial officer.  Finally, the settlement requires that IEC provide the Department a letter of credit of more than $6 million.

FTC Announces Permanent Ban for Third-Party Debt Relief Scammers

On February 6, 2024, the Federal Trade Commission (FTC) announced that a group of third-party student loan debt relief scammers will be permanently banned from the debt relief industry and required to turn over their assets as part of the settlement.  The groups include Express Enrollment LLC and Intercontinental Solutions LLC, who falsely claimed affiliation with the Department of Education and exploited the term “Biden Loan Forgiveness.”  The scammers collected about $8.8 million for nonexistent services and illegally obtained consumers’ financial information.  A federal court halted their operations, froze assets, and imposed a monetary judgment of $7.4 million.

A copy of the press release is found at: https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-action-leads-permanent-ban-scammers-who-charged-students-seeking-debt-relief-junk-fees.

University of Idaho Accreditor Completes Review of University of Phoenix Purchase

On February 14, 2024, IDEDNEWS.org reported that the Northwest Commission on Colleges and Universities (NWCCU) finished reviewing the University of Idaho’s proposed University of Phoenix purchase.  The news source reported that the result of the review “doesn’t represent a ringing endorsement” and that NWCCU did not endorse or criticize the plan.  The University of Idaho and University of Phoenix hope to finalize the deal early this year.

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