House Passes CRA Resolution to Repeal SAVE Plan

On December 7, 2023, the House of Representatives passed House Joint Resolution 88, which uses the Congressional Review Act (CRA) to overturn the Department of Education’s new Saving on A Valuable Education (SAVE) plan, an income-driven repayment plan, by a vote of 201-189.  The resolution now goes to the Senate, although the Senate already defeated a similar attempt to block the SAVE plan, by a vote of 49-50.  Therefore, this version is unlikely to pass in the Senate.

Chairwoman of the House Education and the Workforce Committee Virginia Foxx (R-NC) made the following statement on the House Floor:

  “The Biden administration knows that it’s so-called ‘SAVE’ plan is illegal, and yet, it has no problem putting its foot down on the gas pedal.”

“Let’s make one thing perfectly clear:  the so-called ‘SAVE’ plan is President Biden’s game of ruling by executive decree and pinning the tab on the taxpayer.”

“America’s student loan system is broken, and this reckless, inflationary, and illegal expansion of executive authority will all but ensure it’s doomed beyond repair.”

A copy of the Chairwoman’s press release is found at: https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=409842.

House Education and the Workforce Committee Passes Bipartisan Workforce Pell Act

On December 12, 2023, the House Education and the Workforce Committee passed H.R. 6585, the Bipartisan Workforce Pell Act by a vote of 37-8.  It was introduced on December 5, 2023, by House Republican Conference Chairwoman Elise Stefanik (R-NY), House Education and the Workforce Committee Ranking Member Bobby Scott (D-VA), House Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC), and Health, Employment, Labor, and Pensions Subcommittee Ranking Member Mark DeSaulnier (D-CA).  The bill provides opportunities for students and workers looking to gain skills in high-demand fields by allowing Pell Grants to support students enrolled in high-quality, short-term workforce programs that will lead to career advancement.

Under the legislation, students attending any institution of higher education, including for-profit and online programs, are eligible to receive a Pell Grant for a short-term workforce training program with at least 150 clock hours but less than 600 hours of instruction, or an equivalent number of credit hours, and be offered at a minimum of eight weeks, but less than 15 weeks of instruction.

The bill includes several accountability provisions to determine if a program is eligible.  For example, a state workforce board must determine if a program’s curriculum meets the requirements of high-skill, high-wage or in-demand industries, with an accreditor then determining if the program meets other standards such as providing a “recognized postsecondary credential.”  The accrediting agency would also need to ensure that a plan is in place to ensure that students who complete their program have access to transcripts for their completed coursework without a fee, and that the program has been available for no less than 1 year prior to the determination made by the accrediting agency.  Additionally, the U.S. Department of Education will then make determinations on the eligibility of the program.

The bill maintains a concerning provision intended to help cover the cost of the bill that would prohibit certain private institutions that are subject to an excise tax on investment income, also known as an endowment tax, from awarding federal student loans to eligible students.

Chairman Foxx said:  “America has always been a skills-based economy, so it’s critical that we retool the Pell Grant to match the education needs of both students and employers.  The Bipartisan Workforce Pell Act achieves this goal by elevating skills-based programs, investing in upskilling, and promoting an education model tailored to workforce needs.  This bill is a major win for students and workers, as well as employers who are desperately looking to fill in-demand jobs.”

Ranking Member Bobby Scott (D-VA) also praised the committee’s work on negotiating the bipartisan agreement.  The bill now heads to the House floor. The Senate has not introduced a companion version of the bill as yet.

A copy of the press release is found at: https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=409827.

President Signs Short-Term Continuing Resolution into Law Keeping Federal Government Open Past Holidays

On November 17, 2023, President Joe Biden signed H.R. 6363, the Furthering Continuing Appropriations and Other Extensions Act, a short-term Continuing Resolution (CR) into law, which keeps the federal government open until after the holidays and averts a shutdown.  There is a two-tiered structure for extended federal funding.  Federal funding for the Departments of Transportation, Housing and Urban Development, Agriculture, and Veterans Affairs will expire on January 19, 2024.  Federal funding for the Departments of Education, Labor, Health and Human Services, and Defense will expire on February 2, 2024.

Senate Rejects CRA Resolution to Repeal Department of Education’s SAVE Plan

On November 15, 2023, the Senate failed to pass Senate Joint Resolution 43, a Congressional Review Act (CRA) resolution to repeal the Department of Education’s final rule creating a new Income-Driven Repayment (IDR) Plan, called the Saving on A Valuable Education (SAVE) Plan.  Under the CRA, either the House or Senate can pass a resolution nullifying an administrative action by a simple majority vote.  If the resolution secures the necessary support and is signed into law by the President, the federal agency must cease the action that is the subject of the resolution.  The final vote was a 49-50 vote with Senator Joe Manchin (D-WV) being the only Democrat to join the Republicans to vote in favor of the resolution.

Separately, the House Republicans passed House Joint Resolution 88, a companion CRA resolution, out of the House Education and the Workforce Committee, which included language blocking the SAVE Plan in their version of the Labor, Health and Human Services, Education, and Related Agencies Appropriations Act.  The House has not taken a final vote yet.

ED Releases Fall 2023 Regulatory Agenda

Recently, the Department of Education released its Fall 2023 Unified Agenda of Regulatory and Deregulatory Actions, which indicates that the Office of Postsecondary Education and the Office of Federal Student Aid have several items that are in the proposed rule or final rule stages impacting the federal student aid programs.

The relevant items at the proposed rule stage are:

  • Federal Student Loan Forgiveness: The Department plans to amend current regulations related to the Secretary’s compromise and waiver authority under the Higher Education Act to provide relief to federal student loan borrowers.  A Notice of Proposed Rulemaking (NPRM) is expected in May 2024.
  • Accreditation: The Department plans to amend current regulations associated with the standards related to the Secretary of Education’s recognition of accrediting agencies and accreditation procedures as a component of institutional eligibility for participation in the Title IV programs.  An NPRM is expected in October 2024.
  • State Authorization: The Department plans to change how colleges must be approved by state regulators in order to receive federal student aid.  An NPRM is expected in October 2024.
  • Return to Title IV: The Department plans to make changes to how colleges must calculate and return federal student aid when a student withdraws before the end of a term and ease the administrative burden on institutions.  An NPRM is expected in October 2024.
  • Cash Management: The Department plans to change federal regulations to ensure that students maintain timely access to student aid disbursed by institutions.  An NPRM is expected in October 2024.
  • Distance Education: The Department plans to amend the definition of distance education.  An NPRM is expected in October 2024.
  • Improving Use of Deferments and Forbearances: The Department plans to make changes to the standards and requirements for issuing forbearance and deferments.  An NPRM is expected in October 2024.

The relevant item at the final rule stage is:

  • Public Service Loan Forgiveness: The Department plans to issue a final rule in October 2024 responding to comments received regarding changes to the definition of a qualifying employer for purposes of the Public Service Loan Forgiveness program, including whether any for-profit employer should be a qualifying employer.

A copy of the list is found at: https://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_GET_AGENCY_RULE_LIST&currentPub=true&agencyCode=&showStage=active&agencyCd=1800&csrf_token=4F6C7636906012503DC1A46759E47DBC5C844304F39B5245CED8D06092787D88FAA016F5350B8A9CA411045C4F34B38950C5&source=email.

Biden-Harris Administration Announces Nearly $5 Billion in Additional Student Debt Relief

On December 6, 2023, The Biden-Harris Administration announced the approval of an additional $4.8 billion in student loan debt relief for 80,300 borrowers.  These discharges stem from fixes made by the U.S. Department of Education to income-driven repayment (IDR) forgiveness and Public Service Loan Forgiveness (PSLF) regulatory provisions.

Secretary of Education Miguel Cardona said:  “Before President Biden took office, it was virtually impossible for eligible borrowers to access the student debt relief they rightfully earned.  The data released today once again make clear that the Biden-Harris Administration’s relentless efforts to fix the broken student loan system are paying off in a big way, with more than 3.6 million borrowers now approved for nearly $132 billion in loan forgiveness.  This level of debt relief is unparalleled, and we have no intention of slowing down.”

A copy of the press release is found at: https://www.ed.gov/news/press-releases/biden-harris-administration-announces-nearly-5-billion-additional-student-debt-relief.

Department Releases Draft Regulatory Language on Federal Student Loan Forgiveness Proposals

On December 4, 2023, the Department of Education released draft regulatory language that will be considered by the negotiated rulemaking committee meeting on December 11-12, 2023.  This is the third and last session, and the federal and non-federal negotiators must decide whether they will reach consensus.

The new draft language continues to reflect the Department’s approach to provide forgiveness to the following groups of loan borrowers:

  • Borrowers whose balances have increased because of interest;
  • Borrowers who still have loan debt 20 or 25 years after leaving school;
  • Borrowers who are eligible for relief under existing federal student loan forgiveness programs, but who never applied; and
  • Borrowers who attended low-value programs.

The Department did not release its plan for providing loan forgiveness for borrowers experiencing financial hardship because it was still working on proposals.

In a press release, Secretary of Education Miguel Cardona said that “his agency’s rulemaking process is about standing up for borrowers who’ve been failed by the country’s broken student loan system and creating new regulations that will reduce the burden of student loan debt in this country.”

A copy of the press release, which includes a link to the proposed language, is found at: https://www.ed.gov/news/press-releases/biden-harris-administration-prepares-third-student-debt-relief-negotiation-session.

The negotiated rulemaking committee did not reach consensus on several of the proposals.  The negotiators pressed the Department to have another session to further discuss how ED could provide relief for borrowers experiencing financial hardships.  However, ED did not commit to another session.

ED Plans to Delay Release of Final Title IX Rules Until March

The Department of Education has pushed back the date for finishing its updated regulations for Title IX of the Education Amendments of 1972 to March, according to the agency’s latest regulatory agenda.

The final regulations, which would modify how colleges and universities respond to reports of sexual harassment and assault and create new protections for transgender students, were scheduled for release in May, but then were pushed back to October.  The Department received more than 240,000 comments on its proposed Title IX rules, which has delayed the process because the agency must review and respond to every comment before issuing a final rule.

ED Announces Establishment of a Neg Reg Committee to Rewrite Rules Addressing “Nuts and Bolts” Program Integrity Provisions

On November 28, 2023, the Department of Education announced that it is publishing a Notice in the Federal Register, which it did, to rewrite regulations that address some “nuts and bolts” of Title IV program integrity and institutional quality under the Higher Education Act.  The Notice requests nominations for non-Federal negotiators to be received by December 13, 2023, and sets dates for negotiation sessions in January, February, and March.

Secretary of Education Miguel Cardona said:  “Our regulatory efforts reflect our laser-focus on ensuring that students are well served by the higher education institutions they attend and that our federal student aid programs are helping them to attain postsecondary success.”

The following issues will be subject to negotiation:

  • The Secretary’s recognition of accrediting agencies and related issues;
  • Institutional eligibility, including state authorization;
  • The definition of distance education as it pertains to clock hour programs and reporting for students who enroll primarily online;
  • Return of Title IV of Higher Education Act of 1965 funds; and
  • Cash management to address disbursement of student funds.

A copy of the press release, which includes a link to the draft Notice, is found at: https://www.ed.gov/news/press-releases/biden-harris-administration-seeks-nominations-new-higher-education-program-integrity-and-institutional-quality-rulemaking-panel?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=.

FSA Releases Updated Reports on Institutions on HCM and Proprietary Institution Conversions on its Data Center

On November 21, 2023, Federal Student Aid (FSA) announced (GEN-23-106) that it has posted two updated school reports on its data center, which are Institutions on Heightened Cash Monitoring as of September 1, 2023 and Proprietary Institution Conversions.  FSA also updated information about foreign gifts and contracts reported by institutions as of October 13, 2023.

As part of FSA’s responsibility to conduct oversight of the institutions that participate in the Title IV programs, FSA reviews and issues decisions on requests from proprietary (i.e., for-profit) institutions to convert to a nonprofit or public status.  To its list of decisions about proprietary institution conversion requests since Fiscal Year 2017, FSA added Apex Technical College and the University of Arkansas – Grantham (formerly known as Grantham University).  Both conversion requests were approved in 2023.

A copy of the Electronic Announcement is found at:  https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2023-11-21/updated-fsa-data-center-reports-and-foreign-gift-and-contract-data-reported-institutions#.

FSA Announces User Access and User Role Information for New E-App Implementation Coming in December 2023

On November 17, 2023, Federal Student Aid (FSA) released an Electronic Announcement (GEN-23-101) announcing that in December 2023, FSA will expand the features of FSA Partner Connect, the digital front door for all Federal Student Aid (FSA), and partner engagement.  Effective November 25, 2023, the existing eligcert.ed.gov website and a user’s associated credentials for that site will no longer work.  Beginning December 18, 2023, users will use FSA Partner Connect to access the E-App and complete eligibility and oversight-related case management work.

Following the system implementation, to complete eligibility and oversight-related case management work, users must:

  1. Have access to FSA Partner Connect (including an FSA User ID and password and a valid/registered Two-Factor Authentication (TFA) token), and
  2. Have an assigned Eligibility & Oversight (E&O) user role.

Users who do not currently have access to FSA Partner Connect will need to contact their organization’s Primary Administrator to obtain FSA Partner Connect access.

There are four primary roles related to eligibility and case management-related work, which will be assigned after December 18, 2023:

  • Eligibility & Oversight (E&O) Administrator Role: The E&O Administrator will facilitate account management and grant access to those who will edit and update the E-App.
  • Alternative E&O Administrator Role: This role has the same capabilities as those assigned above.
  • School Eligibility Application Role: This role is assigned to users who complete the organization’s eligibility application and submit supporting documentation.
  • Case Role: This role is assigned to users who complete the organization’s oversight-related work.

A copy of the Electronic Announcement is found at:  https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2023-11-17/fsa-partner-connect-important-user-access-and-user-role-information-new-e-app-implementation-coming-december-2023.

FSA Announces 2024-2025 FAFSA Availability by December 31st; ISIRs Delayed to the End of January 2024

On November 16, 2023, the Department of Education announced that the simplified 2024-2025 Free Application for Federal Student Aid (FAFSA) would be available for students and families seeking federal financial assistance by December 31, 2023.  The Department also announced that institutions of higher education would not begin receiving aid eligibility information, including Institutional Student Information Records (ISIRs) before the end of January 2024.  The Department also released state-by-state estimates of both the number of students that it expects will receive a Pell Grant and the number of students it expects will receive the maximum Pell Grant award under the new 2024-2025 FAFSA.

A copy of the announcement is found at: https://www.ed.gov/news/press-releases/us-department-education-releases-new-data-highlighting-how-simplified-streamlined-and-redesigned-better-fafsa%C2%AE-form-will-help-deliver-maximum-pell-grants-15-million-more-students.

On November 15, 2023, Federal Student Aid (FSA) released an Electronic Announcement (GEN-23-100) announcing the release of new details on the redesigned and streamlined FAFSA form.  As noted in the above press release, the changes in the FAFSA form represent changes made by bipartisan majorities in Congress through the Future Act and the FAFSA Simplification Act.  The Announcement said that students and families will be able to complete and submit FAFSA forms online by December 31, 2023.  The new FAFSA will allow students and families to use federal tax data transferred directly and securely from the Internal Revenue Service (IRS).  Once the FAFSA is complete, students will receive a confirmation email, including their estimated Student Aid Index (SAI) and Pell Grant eligibility.  Students and families will also be able to complete paper forms by downloading a PDF form and mailing it to the Department.  FSA will provide regular status updates to a new “2024-2025 FAFSA Updates” feature on the “FAFSA Simplification Information Topics” page on the Knowledge Center site.

A copy of the Electronic Announcement is found at: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2023-11-15/update-simplified-streamlined-redesigned-2024-25-fafsa.

A copy of the press release is found at: https://www.ed.gov/news/press-releases/biden-harris-administration-continues-efforts-provide-debt-relief-more-student-loan-borrowers?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=.

A copy of the text of the options is found at: https://www2.ed.gov/policy/highered/reg/hearulemaking/2023/student-loan-debt-relief-proposed-regulatory-text-v1.pdf.

A copy of the issue paper is found at: https://www2.ed.gov/policy/highered/reg/hearulemaking/2023/session-2-borrower-hardship-issue-paper.pdf.

CFPB and 11 States Order Prehired to Provide Relief for Illegal Student Lending Practices

On November 20, 2023, the Consumer Financial Protection Bureau (CFPB) and 11 states announced that Prehired will provide more than $30 million in relief to borrowers for making false promises of job placement under its income share agreements that violated the law.  The order approved by a federal court requires Prehired to cease all operations, pay $4.2 million to consumers that were affected by its illegal practices, and voids all of its outstanding income share agreements valued at almost $27 million.

Prehired was a Delaware-based company that operated a 12-week online training program claiming to prepare students for entry-level positions as software sales development representatives with “six-figure salaries” and a “job guarantee.”  Prehired offered income share agreements to help students finance the costs of their program.

A copy of the press release is found at: https://www.consumerfinance.gov/about-us/newsroom/cfpb-and-11-states-order-prehired-to-provide-students-more-than-30-million-in-relief-for-illegal-student-lending-practices/.

GAO Releases Report on Fraud Risks Within Federal Student Loan Forgiveness Efforts

On November 16, 2023, the U.S. Government Accountability Office (GAO) released a report titled, “Student Loans:  Education Should Proactively Manage Fraud Risks in Any Future Debt Relief Efforts.”  The GAO found that the U.S. Department of Education quickly approved borrowers for debt relief under its new federal student loan forgiveness program without applying key practices to prevent fraud.  For instance, the Department did not verify certain borrowers’ self-reported income before approving them for relief.  The report stated that before ceasing work on the original program while it was under review by the U.S. Supreme Court, the Department developed two processes to assess borrower eligibility, but each process had shortcomings at detecting and preventing fraud.  The first process, which affected the majority of borrowers, relied on an application process that relied on self-reported data without conducting any additional assessment of borrower risk. The second process was an automatic process developed for borrowers who had recently reported income to the Department on a recently filed FAFSA or applied for an income-driven repayment (IDR) plan.

The GAO concluded in its report that the size of President Biden’s student debt relief plan, an estimated $430 billion of relief for over 31 million borrowers, “rendered it inherently at risk for fraud and necessitated effective fraud relief management.”  Federal Student Aid Chief Operating Officer Richard Cordray responded to the report by stating that the student loan debt relief program “inherently had an extremely low risk of fraud.”

The GAO made the following recommendations:

  • The Secretary of Education should incorporate robust evaluations of fraud risk management activities into any future debt relief efforts before approving borrowers for relief. This could involve partnering with the Internal Revenue Service (IRS).
  • The Secretary of Education should fully implement all stages of its fraud risk management plans for any future debt relief efforts before approving borrowers for relief.
  • The Secretary of Education should implement controls to avoid relying solely on self-reported data in any debt relief efforts.

A copy of the GAO report is found at:  https://www.gao.gov/products/gao-24-107142.

Senator Bill Cassidy (R-LA), ranking member of the Senate Committee on Health, Education, Labor, and Pensions (HELP) Committee, responded to the GAO report by writing that the Biden Administration “was prepared to transfer $430 billion in student loan debt onto taxpayers.”

A copy of the Senator’s press release is found at: https://www.help.senate.gov/ranking/newsroom/press/ranking-member-cassidy-reacts-to-new-report-revealing-attempt-to-cancel-430-billion-in-student-debt-without-verifying-borrowers-eligibility.

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