Brustein & Manasevit’s Federal Update

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!


Re:

Federal Update

Date:

December 13, 2019



Lawmakers Reach Deal to Fund Government for FY 2020

Congress Passes HBCU Funding Bill

New Regulations Protect Religious Colleges’ Access to Funds

Committee Grills DeVos on Borrower Defense 

News


DeVos Proposes New Agency to Handle Student Loans

ED OIG Issues Work Plan for FY 2020


GAO Finds Obstacles for Parents Filing Special Ed Complaints

Legislation and Guidance


Lawmakers Reach Deal to Fund Government for FY 2020

Lawmakers in Congress announced on Thursday that they have reached a “deal in principle” on federal funding for the remainder of fiscal year 2020, which are the funds education grantees will receive on July 1, 2020. The government is currently running under a continuing resolution that expires on December 20th. 

Few details have been released about the agreement, and lawmakers and staff are expected to work through the weekend to finish drafting legislation and negotiating some remaining technical issues.  Many of the major items that were holding up negotiations, though, have been agreed upon, including funding for the President’s southern border wall.

Lawmakers plan to unveil the legislation early next week and set up a vote, at which point additional details on spending levels for the U.S. Department of Education and other agencies will be available.  Congress reportedly intends to pass the 12 appropriations bills in two large packages, known as “minibuses.”  The President has not officially offered his support for the deal, but Treasury Secretary Steven Mnuchin was involved in the discussions this week and has said the President hopes to have all 12 appropriations bills passed by the December 20th deadline. 

Brustein & Manasevit will provide updates next week as additional information on spending levels becomes available.

Resources:

Caitlin Emma and Jennifer Scholtes, “Lawmakers Reach a Bipartisan Deal ‘In Principle’ to Fund the Government,” Politico, December 12, 2019.

Author: KSC


Congress Passes HBCU Funding Bill

This week the House and Senate passed a bipartisan higher education bill that would make some changes to the federal student aid application and restore expired funding to historically black colleges and universities (HBCUs).

The legislation will permanently reauthorize about $250 million in funding for minority-serving institutions. Earlier funding provisions had expired in September, but Senate Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander (R-TN) had resisted passing a standalone extension in favor of passing some higher education provisions.  Congressional Democrats said they preferred a comprehensive higher education reauthorization, but with little movement on that front, the Alexander strategy won out.

The bill will tweak some student data-sharing provisions to make it easier for the Internal Revenue Service to share students’ and parents’ tax data with the U.S. Department of Education. This, in turn, is intended to facilitate easier federal financial aid and income-based repayment applications.  Proponents say this will help simplify and reduce the number of questions on the Free Application for Federal Student Aid (FAFSA) and help borrowers stay enrolled in income-based programs from year to year.The bill heads to the President’s desk; the White House has said the President will sign it.

Resources:

Michael Stratford, “Congress Passes HBCU Funding, Student Aid Simplification Bill,” Politico, December 10, 2019.

Author: JCM


New Regulations Protect Religious Colleges’ Access to Funds

The U.S. Department of Education (ED) released regulations Tuesday which would protect religious colleges from potentially losing access to federal

student aid based on religious affiliation. In the rule, ED said that it would ensure institutions are not denied funding solely because of their religious nature.  It would also allow student borrowers who work or volunteer in faith-based or religiously-affiliated service programs to

be eligible for deferred repayment of federal student loans, or Public Service Loan Forgiveness.  This means missionaries – including those primarily engaged in proselytizing or fundraising for religious purposes – could seek an interest-free delay on repaying their student loans.  Work in a religious instructional or worship facility will be allowable under the Federal Work-Study program.  Further, the proposed regulations would remove language which presumed that members of a religious order have no financial need when determining eligibility for federal student aid, potentially opening up federal funding to priests, nuns, and others.

“Faith-based institutions should not have to worry about losing access to federal programs due to their faith,” said Secretary DeVos in a press release accompanying the regulations.  “These new rules will ensure a level playing field and will guarantee that individuals and institutions can continue to practice their faith and adhere to their values without losing the federal funding opportunities otherwise available to others.”At the K-12 level, language would be modified to allow religious or religiously-affiliated organizations to provide services at schools under the GEAR UP program.  In addition, the regulations would amend the Teacher Education Assistance for College and Higher Education Grant Program requirements to eliminate certification and annual reporting requirements.  When borrowers miss those deadlines, grants are converted into loans – something the ED says it would like to avoid.  Under the proposal, conversion would only occur if it were impossible for a recipient to complete the four-year service agreement within the eight-year timeframe, and certifications of completion would be accepted at any time up to a grant-to-loan conversion.  The changes also include an adjudicatory process that will allow students to appeal the conversion, and a change to the definition of “high-need field” to include computer science.

The regulations were amended pursuant to a Supreme Court ruling in Trinity Lutheran Church of Columbia, Inc. vs. Comer, where the Court stated that Missouri had wrongfully denied a church access to a State grant solely because it was a religious entity.  ED has also revised non-regulatory guidance on equitable services to private schools under the Elementary and Secondary Education Act based on the same decision.

ED has said that it intended to publish final regulations by November 2020, going into effect in July of 2021.  The proposed regulations are here; comments are due by January 10, 2020.  The regulations were the result of a consensus reached – at least on the TEACH grant provisions – during negotiated rulemaking.

Resources:

Bianca Quilantan, “DeVos Proposed Rule Ensuring Religious Colleges Have Access to Federal Funds,” Politico, December 10, 2019.

Author: JCM


Committee Grills DeVos on Borrower Defense

In a contentious hearing in the House Committee on Education and Labor Thursday, Secretary of Education Betsy DeVos faced heated questions on her agency’s new formula for determining when students who have been misled by institutions may apply for loan forgiveness.The formula is being used by the U.S. Department of Education (ED) to evaluate applications for loan forgiveness under a rule known as “borrower defense to repayment” or “borrower defense.” DeVos said that there was no structure for evaluating or processing those claims before she took office, and suggested that changes to regulations in 2016 led to an influx of claims to process – a number which totals over 300,000 today.


The formula, which takes effect in July of 2020 and applies only to future claims, will compare a student’s earnings to the median earnings of a graduate who attended a comparable program. The greater the difference between the student’s earnings and that benchmark, the more of the loan is forgiven. But Democrats said it was not fair to compare to graduates of similar or the same institutions and programs, who may also have been misled. Further, they said it assumed that only two and a half percent of borrowers are far enough out of the median to have their loans forgiven and note that in many cases borrowers would have to earn under $1,000 per year to merit forgiveness. Democrats also suggested that comparing between programs – and not on the merits of individual claims – was the wrong way to process those claims.


DeVos, for her part, said she wanted borrowers to have to demonstrate financial harm to merit relief, not just “raise their hand.” She also criticized the Obama administration for its vigorous enforcement efforts targeted at for-profit institutions, saying that her predecessors had “weaponized borrower defense against schools that they didn’t like.”


Democrats also criticized what they classified as DeVos’ lack of preparation for the hearing, saying she should have read memoranda on borrower

defense issued in early 2017 – documents which argued for full relief of loans to students of the now-defunct Corinthian Colleges and ITT Technical

Institutes. Those memoranda were published by new outlets the day before the hearing. DeVos argued that there was no need for her to be familiar with internal documents created before her tenure began in February of that year.


Committee Democrats did not hold back in their criticism of DeVos. California Representative Josh Harder asked the Secretary whether she was violating a court order to stop collecting on loans from students with active forgiveness applications “because you are too corrupt to uphold the law or because you’re too incompetent to do your job.” Frederica Wilson (D-FL) called DeVos the “most unpopular person in this administration” and said that more people would vote against the Secretary in the coming election than the President. But DeVos also got some barbs in – she said there were “material weaknesses” in the previous administration’s rules, which she said were applied in a “discriminatory fashion” and, when pressed by Representative Mark Takano (D-CA), asked whether he was “interested in learning or… in just making a point.”


Resources:

Erin Bacon, “After Months of Delay, DeVos Touts Limited Student Loan Forgiveness Plan,” Roll Call, December 12, 2019.

Cory Turner and Anya Kamenetz, “House Democrats Grill Betsy DeVos Over Denying Student Borrower Relief,” NPR, December 12, 2019.

Michael Stratford, “DeVos Resists Attacks on Partial Relief for Defrauded Borrowers as Democrats Pounce,” Politico, December 12, 2019.

Author: JCM


News


DeVost Proposes New Agency to Handle Student Loans

Secretary Betsy DeVos is suggesting the creation of a new independent agency to handle the more than $1.5 trillion in federal student

loans under Title IV of the Higher Education Act (HEA).  This proposal, if it went into effect, would shift authority over student aid from the current

Office of Federal Student Aid (FSA) at the U.S. Department of Education (ED) to the new “stand-alone government corporation, run by a professional, expert and apolitical board of governors,” according to DeVos.

A change of this magnitude would require Congressional action, but DeVos claims this would be the best move for the student lending industry.  DeVos has long been opposed to the way the federal government handles student loans, noting that roughly 90 percent of all student loans are

backed by the federal government.  If this level of government involvement is going to continue, DeVos argues that the industry should be reorganized from its current focus on politics to serving students and families.

While the Trump administration has not officially called for legislation making this change, DeVos claims that she will continue to work towards transforming student aid and that “Congress needs to come alongside us to make this happen.”

Resources:

Michael Stratford, “DeVos Proposes Spinning off Federal Student Loans from Education Department into Independent Agency,” Politico, December 3, 2019.

Author: SAS


ED OIG Issues Workplan for FY 2020

ED OIG Issues Work Plan for FY 2020The U.S. Department of Education (ED)’s Office of Inspector General (OIG) has released its work plan for fiscal year (FY) 2020, which outlines what projects it will continue over the next year, as well as any new work the office intends to take on.

With regards to financial aid, one of the new projects ED OIG will engage in FY 2020 is assessing the transition of the Office of Federal Student Aid’s contracts from its current loan servicers to contracts under the NextGen Financial Services Environment – a long-planned revamp of the student loan servicing, application, and repayment system. ED also plans to continue work related to an accrediting agency, the Accrediting Council for Independent Colleges and Schools (ACICS), which entails reviewing ED’s process for assessing ACICS’ compliance with regulatory criteria for federal recognition and the evidence ED considered in making a recognition determination.

ED OIG will continue its audit work related to the use of funds appropriated in 2018 for the Immediate Aid to Restart School Operations (Restart) disaster relief program, and the Office will expand that disaster relief grant work to examine funds appropriated for the Restart program in 2019.  OIG will also look at ED’s oversight of State-level requirements related to annual determinations under the Individuals with Disabilities Education Act and whether States are complying with local educational agency annual determination requirements.  In addition, OIG will continue reviewing whether ED has appropriately dismissed complaints that have been filed with the Office for Civil Rights, and will begin new work to review ED’s process for

providing technical assistance to State Vocational Rehabilitation program grantees with regards to financial reporting.

In addition to OIG’s planned and continuing work, the Office also starts new projects based on tips provided through avenues such as the OIG hotline, responds to Congressional inquiries, and provides analyses and comments on new proposed regulations, guidance, legislation, among other regular activities. ED OIG’s fiscal year 2020 work plan is available here.

Author: KSC


Reports


GAO Finds Obstacles for Parents Filing Special ED Complaints

A Government Accountability Office (GAO) report released publicly last week finds variation based on race and income in the frequency of parents

initiating dispute resolution procedures under the Individuals with Disabilities Education Act when there is a disagreement regarding a student’s special education services.

GAO analyzed, in five States, the frequency of parents’ use of dispute resolution, whether the use of dispute resolution differed across socioeconomic or demographic characteristics at a district level, what challenges parents face using dispute resolution, and how the U.S. Department of Education (ED) and States help facilitate use of dispute resolution procedures. 

GAO found that a greater proportion of high-income districts had dispute

resolution activity as well as higher rates of dispute activity than low-income districts.  GAO also found that a smaller proportion of predominantly African-American and Hispanic school districts had dispute resolution activities compared to districts with fewer minority students; but the predominantly African-American and Hispanic school districts had higher rates of dispute resolution activity.

GAO discovered several barriers for parents in engaging in dispute resolution as well.  Parents reported feeling an imbalance of power during these disputes given the resources that school districts have access to throughout the process compared to parents.  Language barriers, trouble obtaining time off from work, and transportation were other issues identified by parents.  In addition, in rural and smaller districts, parents are less likely to engage in dispute resolution due to higher chances of them having to interact with teachers or other involved staff in their communities. The full GAO report on dispute resolution activity is available here.

Resources:

Andrew Ujifusa, “Parents Report Obstacles in Filing Special Education Complaints, Watchdog Says,” Education Week: Politics K-12, December 4, 2019. Author: KSC


To stay up-to-date on new regulations and guidance from the U.S. Department of Education, register for one of Brustein & Manasevit’s upcoming webinars. Topics cover a range of issues, including grants management, the Every Student Succeeds Act, special education, and more. To view all upcoming webinar topics and to register, visit https://www.bruman.com/webinars.

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.