The Federal Update is a weekly publication by our Legislative Office that provides our clients with an analysis of the most up-to-date issues affecting federal education and workforce programs. Below is an example of the articles included in our federal update. We will update this page periodically. If you are interested in receiving a copy of our weekly Federal Update please contact our offices!
From: Michael Brustein, Julia Martin, Steven Spillan, Kelly Christiansen
Re: Federal Update
Date: October 30, 2015
Legislation and Guidance
ED Finalizes UGG
Two-Year Budget Deal Passes House, Senate
ED Releases New Guidance on Standardized Testing
House Holds First Perkins Act Reauthorization Hearing
ED Publishes Final HEA Title IV Rules
Paul Ryan Elected Speaker
On Monday, the U.S. Department of Education will publish language in the Federal Register announcing that it is finalizing the Uniform Grants Guidance, published in December of 2014 as an “interim final” regulation. Along with this announcement, ED is making two technical corrections: correcting a reference to part 200, and the replacement of the inadvertently removed 75.263, which allows grantees to incur pre-award costs unless prohibited.
ED also addresses some questions and concerns about the interim final regulations, including on the meaning of “tangible personal benefit” and the restrictions on specifying a “brand name” in procurement,
Shortly before he resigned his position as Speaker of the House, Representative John Boehner (R-OH) secured passage of a budget deal which will avoid the possibility of default for the next two years and increase caps on federal government spending. The bill passed the House of Representatives on Thursday evening by a vote of 266-167 and passed the Senate shortly before 3 a.m. on Friday by a vote of 64-35. President Obama is expected to sign it in the next few days.
The Bipartisan Budget Act (BBA) would increase sequestration caps on both defense and non-defense spending for fiscal year (FY) 2016 and 2017. Allowed spending for non-defense discretionary budget items will increase from $492 billion in FY 2015 to $518 billion in FY 2016, rising again to $519 billion in FY 2017. The legislation also increases the limitation on federal borrowing, raising the debt limit and putting off the possibility of default for another two years. The increased spending under the bill – about $80 billion in total – drew criticism from many conservative Republicans and some Presidential candidates, including newly elected House Speaker Paul D. Ryan (R-WI). However, it allows the new Speaker and his leadership team to proceed with other matters and not be immediately bogged down by such controversial legislation.
In order to offset the cost of raising the spending caps, the BBA extends the applicable period of many sequestration cuts for an additional two years, through 2025. It also makes some changes to federally-backed pension premiums, small increases to Medicare Part B premiums, eliminates the requirement that employers automatically enroll employees in health insurance plans, and makes promises to sell oil reserves and portions of the wireless spectrum currently owned by the federal government.
The legislation would also allow student loan debt collectors to use automatic dialing systems to call cell phones in order to collects debts owed to, or guaranteed by, the U.S. government. This kind of robo-calling is currently prohibited unless there is an emergency or if the person being called has given consent.
While this bill increases Congressionally mandated caps on federal spending, it does not set appropriations levels for the remainder of FY 2016. Congress will still have to pass legislation setting funding levels for federal programs once the current temporary appropriations bill expires on December 11th. There is no guarantee that the House and Senate Appropriations Committees will spend all that they are allowed to under the new budget caps, or that the small spending cuts passed as part of the current Continuing Resolution will be restored.
Danny Vinik, “So we have a budget. Now how do we pay for it?” Politico, October 28, 2015.
Danielle Douglas-Gabriel, “Budget bill rider would allow student debt collectors to robocall your cell phone,” The Washington Post, October 27, 2015.
The U.S. Department of Education (ED) and President Obama called for a reduction in student assessments last week, releasing an action plan outlining principles States and districts can follow to cut back on standardized testing. President Obama introduced the Administration’s new testing guidelines in a video posted to Facebook over the weekend.
ED’s announcement coincided with the release of a report on testing from the Council of the Great City Schools (CGCS). The report highlights the extent to which students are being tested, and asserts that the average student takes significantly more assessments than are necessary to gauge academic achievement. According to the report, students are required to take an average of 112.3 assessments between pre-K and grade 12, with students taking an average of eight standardized tests per school year.
The Administration admitted its partial responsibility for over-testing students in recent years, but also noted that it hopes to be part of the solution. ED plans to review its policies to address any areas where the Administration may have contributed to over-testing. The shift comes as a growing number of parents are opting their children out of assessments by keeping them home on testing days.
ED’s new testing guidelines are intended as a suggestion, so States and districts are not required to adopt them. The principles lay out several qualities that student assessments should have:
- Worth taking;
- High quality;
- Fair in equity in educational opportunity;
- Fully transparent to students and parents;
- Just one of multiple measures; and
- Tied to improved learning.
As an additional resource, ED published positive steps that some States have already taken to reduce the testing burden on students. The agency also said that it would allow States to revise waiver applications to scale back on tests not required by federal law, and would try to work with States to find more ways to reduce testing. The Administration also outlined several measures that would reduce over-testing for Congress to consider as it works to reauthorize the Elementary and Secondary Education Act, including capping the percentage of instructional time devoted to assessments at 2 percent.
The complete testing action plan can be viewed here.
U.S. Department of Education Press Release, “Fact Sheet: Testing Action Plan,” October 24, 2015.
Earlier this week, the House Education and the Workforce (HEW) Subcommittee on Early Childhood, Elementary, and Secondary Education held the first hearing on reauthorization of the Carl D. Perkins Career and Technical Education (Perkins) Act. The Perkins Act, last reauthorized in 2006, provides federal support to secondary and post-secondary programs that prepare students for technical careers.
At the hearing, four witnesses provided expert testimony on a range of issues concerning career and technical education (CTE):
- Deneece Huftalin, President, Salt Lake Community College
- Douglas Major, Superintendent/CEO, Meridian Technology Center
- Irelene Ricks, Director of Diversity, Life Science Programs, Keystone Symposia on Molecular and Cellular Biology
- Tim Johnson, Senior Director of Governmental Relations, National Center for Construction Education and Research
Witnesses and committee members emphasized the value of integrating academic studies into CTE, in addition to teaching technical skills, so that students are prepared for post-secondary education should they choose to pursue it. In addition, Major advocated for the expansion of CTE programs and career exploration and guidance within the K-12 system to help educate students about their post-secondary options, including CTE.
Much of the discussion focused on CTE funding. Huftalin emphasized the importance of Perkins funding to allow her institution to expand and grow their CTE programs as enrollment has steadily increased in recent years. Rep. Carter (R-GA) asked witnesses to share their thoughts on switching from a formula system to a competitive grant system for Perkins funding, and the witnesses largely rejected the idea arguing that it would eliminate access for many students.
Before concluding the hearing, Chairman Rokita (R-IN) asked the witnesses to comment on what Congress needs to fix in the Perkins Act. Adding to her testimony regarding the need for better access to CTE for minorities, Ricks suggested engaging more minority-serving institutions with CTE in the future. Huftalin mentioned the need to have consistent accountability metrics across all federal acts and Major spoke on the importance of focusing the upcoming reauthorization on high quality CTE programs that lead to recognized outcomes.
The committee says it intends to hold additional hearings later this year on Perkins reauthorization, but none have been scheduled yet. Just last week, the Senate Committee on Health, Education, Labor, and Pensions announced that it will also be taking up Perkins reauthorization and asked for input from stakeholders. But with leadership changes in the House and a full calendar for Congress, it is unclear when that might happen.
You can watch the archived hearing from Tuesday here.
The U.S. Department of Education (ED) released two new final regulations this week designed to protect students in against predatory lending practices and help more borrowers limit the amount of their payments to 10 percent of their income. Under the final regulations, students will be able to freely choose how to receive their federal student aid refunds, institutions and lenders will be required to give students objective and neutral information about their financial aid disbursement options, and students will no longer be forced to pay excessive fees to access their federal student aid, including Pell Grants.
According to the U.S. Government Accountability Office (GAO) and the U.S. Public Interest Research Group (USPIRG), institutions enrolling approximately nine million students—about 40 percent of all college students—have debit or prepaid card agreements. ED estimates that nearly $25 billion dollars in Pell Grant and Direct Loan program funds are annually released to students at institutions using these accounts. The new student loan rules will:
- Require institutions to give students greater choice about how to receive their student aid;
- Prohibit institutions from requiring students or parents to open a certain account into which their student aid refunds are deposited;
- Require institutions to ensure that students are not charged excessive and confusing fees (e.g., overdraft fees and transaction-swipe fees) if a student selects an account offered directly or indirectly by contractors that assist institutions in making direct payments of Federal student aid;
- Require an institution to provide students with a list of account options that the student may choose from to receive their student aid refunds, where each option is presented in a neutral manner and makes clear that the student can have their student aid deposited to their preexisting bank account;
- Require institutions to ensure that electronic payments made to a student’s preexisting account are made as timely as, and no more onerous to the student than, payments made to accounts marketed through the institution; and
- Allow institutions to share limited student information with third-party servicers that offer financial products to allow the continued functioning of disbursement processes, while also protecting private student information, such as Social Security numbers or portions thereof.
ED says that the goal of these regulations is to protect students by (1) ensuring that students have fee-free access to funds needed to pay for education expenses such as food, housing, books and supplies, (2) improving contractual transparency between educational institutions and private financial partners, and (3) eliminating or reducing many of the troubling practices identified by consumer advocates, the GAO, and in an ED’s Inspector General’s report calling for student choice and transparency.
The new rule also includes the Revised Pay As You Earn (REPAYE) Plan expanding repayment options to allow five million more Direct Loan borrowers to cap their monthly student loan payment amount at 10 percent of their annual income allocated per month, without regard to when the borrower first obtained their loans. In addition, the final regulations also include:
- Starting in 2016; an expansion of the circumstances under which institutions may challenge or appeal a cohort default rate that appears artificially high because of a corresponding low rate of student borrowing;
- Starting July 1, 2016; new procedures for the Federal Family Education Loan (FFEL) Program loan holders to identify Servicemembers who may be eligible for a lower interest rate under the Servicemembers Civil Relief Act (SCRA), enabling these borrowers to receive this important benefit automatically;
- A requirement that guarantors provide information to FFEL Program borrowers on repayment plans available to them after they rehabilitate their defaulted loans, to help ensure that borrowers have a smoother transition to regular repayment (to be implemented July 1, 2016); and
- A provision to allow lump-sum payments made on behalf of borrowers through student loan repayment programs administered by the Department of Defense to count toward Public Service Loan Forgiveness, similar to the application of lump sum payments for Peace Corps and AmeriCorps volunteers.
The new REPAYE repayment plan will be available to borrowers starting this December. Borrowers interested in enrolling or learning more about income-based repayment options can visit www.StudentAid.gov/IDR or contact their loan servicers.
U.S. Department of Education Press Release, “U.S. Department of Education Announces Two Final Regulations to Protect Students and Help Borrowers,” October 27, 2015.
Paul Ryan Elected Speaker
On Thursday, Wisconsin Congressman Paul D. Ryan (R-WI) was elected Speaker of the House by 236 of his colleagues – well more than the 218 needed to win. Ryan’s only declared Republican challenger was Representative Daniel Webster (R-FL), who received nine votes on the floor. Minority Leader Nancy Pelosi (D-CA), who received 184 votes for Speaker, presented the gavel to Ryan after giving a speech praising outgoing speaker John Boehner (R-OH).
Ryan spoke to his colleagues promising to work with both junior and senior lawmakers and to rely more heavily on Committees to draft and move major legislation. He also promised to take concerns of the conservative branch of his party – whose complaints ended up ousting his predecessor – seriously. “We are not settling scores,” Ryan said, “[w]e are wiping the slate clean.”
When previous speaker John Boehner (R-OH) announced at the end of last month that he would retire, Ryan was not who he had in mind as a replacement. Instead, Boehner expected that the House would elect the Majority Leader Kevin McCarthy (R-CA). But McCarthy made a misstep by criticizing the House Select Committee on Benghazi and was forced to withdraw from consideration. This move left House Republicans scrambling for a candidate who could garner support from both the moderate and more conservative members of his party. Ryan originally said he was not interested in the position, but calls from Boehner and others in the party reportedly changed his mind. Also figuring prominently in his decision were a number of concessions that Ryan extracted from House Republicans which will allow him to be Speaker while avoiding many of the more unpleasant aspects of the job. Ryan will be relieved of his responsibilities to fundraise for the party, will have no obligation to stay in D.C. on weekends, and the House will change its rules to make it harder to remove him (a motion filed against Boehner in July to declare the speakership vacant is among the actions that would eventually lead to his resignation). Ryan also would not campaign – he would run for Speaker only if the conservative House Freedom Caucus also endorsed him.
Despite support from conservatives for his election, Ryan faces many of the same challenges that plagued Boehner – a divided Republican caucus, Democrats and a President with little incentive to compromise, and a number of controversial legislative issues which must be addressed by the end of the year. But Boehner’s negotiation of a two-year budget deal allows slightly smoother sailing by relieving Ryan of the need to deal with the debt limit and sequestration within his first few months.
Scott Wong, “Paul Ryan Elected Speaker,” The Hill, October 29, 2015.
Jake Sherman, “How Paul Ryan went from no-chance to next speaker of the House,” Politico, October 29, 2015.
Jake Sherman, “Paul Ryan elected 54th House speaker,” Politico, October 29, 2015.
The Federal Update has been prepared to inform Brustein & Manasevit, PLLC’s legislative clients of recent events in federal education legislation and/or administrative law. It is not intended as legal advice, should not serve as the basis for decision-making in specific situations, and does not create an attorney-client relationship between Brustein & Manasevit, PLLC and the reader.
© Brustein & Manasevit, PLLC 2015
Contributors: Julia Martin, Steven Spillan, Kelly Christiansen