studentaid

As House panel prepares to debate Higher Ed Act, drafters add study on student-level data

As House panel readies to debate Higher Education Act, GOP lawmakers add provision seeking federal study of student-level data system run by National Student Clearinghouse.

Inspector General: Resume Processing Borrower-Defense Claims

The Department of Education's inspector general said Monday that review of student loan relief applications known as borrower-defense claims should resume after months without a single ruling from the Trump administration.

The Office of Inspector General also recommended that the department establish a time frame for reviewing claims and either issuing a denial or discharging the loan.

Democrats seized on the report as evidence that the Department of Education under Secretary Betsy DeVos has harmed tens of thousands of student borrowers by halting review of the claims by students who allege they were defrauded or misled by their institutions.

"Now Secretary DeVos has absolutely no excuse -- it’s time to cancel these fraudulent loans," said Senator Elizabeth Warren, a Massachusetts Democrat, in a statement.

About 95,000 borrower-defense claims are pending review by the department, administration officials have said -- roughly 65 percent of those filed by former students of for-profit Corinthian Colleges institutions.

While Democrats and student advocates have repeatedly sought answers on the lack of progress, the department has said it is working to set up a process for adjudicating claims.

Department spokeswoman Liz Hill said the OIG report confirmed "the previous administration did not establish an adequate adjudication process for borrower-defense claims."

"The desire to avoid denying claims or adjudicating complicated claims left thousands of students in limbo," she said. "That’s why the department, under the leadership of Secretary DeVos, has been working diligently to put a process in place that provides a consistent and reliable way to adjudicate pending borrower-defense claims, provide fair relief to defrauded students, and also protect taxpayers."

The inspector general's report, though, found that Federal Student Aid's Borrower Defense Unit had clear criteria for review of claims, even though it recommended clearer documentation of legal memoranda used to justify discharges and establishing clear policies on review of unique claims, among other changes.

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Low-Income Student Enrollment Campaign Expands

Founded last year, the American Talent Initiative is a Michael Bloomberg-funded effort to enroll more lower-income students at prestigious colleges with high graduation rates. The project, which is being coordinated by the Aspen Institute’s College Excellence Program and Ithaka S&R, began with 30 colleges and universities as participants. In the 12 months since its kickoff, the effort has expanded to include 86 institutions.

Likewise, six participating institutions, including Yale University, the University of Washington and Elizabethtown College, have released "specific action plans to support these students socially, academically and financially, from before they arrive on campus to graduation and beyond," according to a written statement from the initiative.

"America is the world’s greatest meritocracy, but too often a parent’s income still determines a child’s likelihood of attending a great college," said Bloomberg. "The American Talent Initiative is aimed at fixing that, and the program’s momentum is building: more top schools are committing to enrolling more talented students from lower-income families and drawing up concrete action plans to make that happen."

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House Republican Opposes Grad Student Tax

Representative Pete Sessions, a Texas Republican, on Thursday circulated a letter to House colleagues urging GOP leaders to exclude from final tax reform legislation a provision that would tax graduate students' tuition benefits.

The letter signals at least one House Republican is focused on an issue graduate students across the country have organized around for weeks. On Tuesday, about 40 graduate students protested at the office of House Speaker Paul Ryan, leading to nine arrests.

"A tax on graduate tuition waivers would be unfair, would undermine our competitive position and would inhibit the economic growth that tax reform promises," he letter reads.

The provision -- one of several in House tax reform legislation stripping current student and borrower benefits from the tax code -- would effectively treat tuition waivers offered by colleges to grad students as taxable income. For many graduate students, that change could increase their tax bill by several thousand dollars, making the cost of their programs unaffordable.

While the House legislation passed last month included the repeal of tax-free tuition benefits for grad students, Senate legislation passed over the weekend left out that and other House provisions affecting student benefits. A conference committee named by House and Senate leaders Thursday will soon look to iron out the differences between the two bills. Higher ed lobby groups like the Association of Public and Land-grant Universities and the American Council on Education have joined students in calling for those provisions to be excluded from final legislation.

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Accreditor Lifts Louisville Probation

The Southern Association of Colleges and Schools Commission on Colleges ended the University of Louisville’s probation Tuesday, closing a year of scrutiny during which the university’s accreditation was in jeopardy because of concerns about its administration, governance and financial condition.

SACS placed Louisville on probation last December, several months after the university was thrown into turmoil when Kentucky Governor Matt Bevin ordered an overhaul of the university's board and announced the departure of former president James Ramsey. Probation is the second most serious sanction the accreditor levies, short only of the loss of accreditation.

Louisville announced the lifting of the probation in a news release containing statements from both the university’s interim president, Greg Postel, and SACS President Belle Wheelan. Postel said faculty, staff and administrators had worked to address concerns and place the university on solid ground for the future. Wheelan said SACS is “excited any time” institutions come back into compliance.

“The university worked hard to show that they cared about the university enough to make sure that there were no clouds hanging over them anymore and we are very proud,” Wheelan said in the statement.

SACS voted to remove Louisville’s probation less than three months after a special committee visited the university in September. The committee, chaired by University of Virginia President Teresa Sullivan, issued a report in October outlining Louisville’s progress in complying with nine accreditation principles. It found the university had met seven of the nine principles, although the university subsequently responded that it met the remaining two.

Specifically, the committee examined whether Louisville had a properly sized and functioning governing board, whether its board is responsible for selecting and evaluating its chief executive, whether the board has a conflict of interest policy, whether board members are free from undue external influences, and whether the governing board can be dismissed only for appropriate reasons and via a fair process. It also examined whether Louisville had qualified administrative and academic leaders, whether the university has a clearly defined relationship with its foundations, whether the university is financially stable, and whether it appropriately controls its financial resources.

On governance issues, the special committee noted that Kentucky’s General Assembly passed legislation early this year to clean up process and legal issues surrounding the dismissal of Louisville’s previous board and the appointment of a new board. It also found that newly appointed trustees appear to operate free from outside influence and that the new board has been responsible for appointing two Louisville interim presidents.

“Although the governor became involved in the removal of the previous president in contravention to the above policies, the board itself eventually accepted the resignation of the previous president,” the committee wrote in the report, which noted several additional policy changes related to governance that have been put in place.

The committee also noted that Louisville and its foundation have put changes in place to prevent the foundation from overspending and to address concerns about the relationship between university and foundation.

The committee did leave the university with two recommendations in October: that it provide evidence it has qualified academic and administrative officers who have enough competence and experience to lead, and that Louisville have a formal written agreement with an existing separate real estate foundation. Louisville has responded that its leaders are qualified and that it has signed a memorandum of understanding with the real estate foundation outlining legal authority and operating control.

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Education Department Signals Possible Changes to Gainful-Employment Rule

In documents released this week ahead of a negotiated rulemaking session on the gainful employment rule, the Department of Education signaled potential limits to Obama era regulation that went into effect last year.

The gainful employment regulation was written to weed out poor-performing career education programs that produce too many graduates with debt they can't repay. To hold programs accountable, it ties access to federal student aid funds to performance on a debt-to-earnings metric.

For-profit colleges sued twice to block the rule, but it went into effect last year and the first set of full data for career programs subject to the rule was released in January. However, Education Secretary Betsy DeVos said in June that she would appoint a rulemaking panel to overhaul the rule, taking account of many of the complaints from colleges. 

Materials provided to negotiators ahead of the first rulemaking session next week signal an interest in applying the regulation in whole or in part to all higher ed programs. That fits the priorities of for-profit groups like Career Education Colleges and Universities. It also wouldn't be possible under current law without making gainful employment simply a transparency measure by removing accountability measures -- another question raised by the materials for negotiators.

Virginia Foxx, the Republican chair of the House Education and the Workforce committee, is a longtime critic of the rule. Legislation expected from her committee this week would prohibit future action on the gainful employment rule by the department, according to reporting by the Wall Street Journal. The legislation, a reauthorization of the Higher Education Act, will instead propose a new tool tracking program-level data on completion, earnings, and average debt, the Journal reported.

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How the Senate and House tax bills would hit higher education

On eve of vote on Senate tax reform plan, we compare it to the House version, which would hurt students and families more. Both would hit colleges and universities hard by imposing new taxes and constraining state budgets.

Report: For-Profit Looking to Sell 2 Law Schools

For-profit law school chain InfiLaw is looking to sell its two remaining law programs, The Wall Street Journal reported over the weekend.

Arizona Summit Law School was placed on probation in March by its accreditor, the American Bar Association. Florida Coastal School of Law, meanwhile, was warned by ABA in October that it was "significantly out of compliance" with accreditation standards.

A third InfiLaw program, Charlotte School of Law, shut down in August after it failed to win renewed access to Title IV federal aid programs and its state regulator rejected a request to extend its license to operate. The Obama administration had cut off Charlotte's access to Title IV funds last year after the ABA put the law school on probation.

The Journal reported that InfiLaw is in discussions with nonprofit law schools to take over operations of its two remaining programs, according to Donald E. Lively, the president of Arizona Summit.

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Education Department unveils new mobile FAFSA application

Education Department plans a new platform aimed at smoothing applications for student aid and helping borrowers manage loan payments. But Congress must act to remove the most serious obstacles to completion of the FAFSA.

Servicers and states seek answer from DeVos on whether feds pre-empt state regulations

As states become more active in regulating the companies that collect and handle student loan payments, servicers seek answer from Secretary DeVos on whether federal policy pre-empts new rules.

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