studentaid

Nominations Invited for Rule-Making Panels

The Department of Education on Tuesday outlined qualifications for potential negotiators taking up the borrower-defense and gainful-employment regulations in separate rule-making panels later this year.

Education Secretary Betsy DeVos announced in June that she would block the borrower-defense rule from going into effect and establish separate panels to reconsider both sets of regulations. The borrower-defense rule outlined a process for student borrowers defrauded by their institutions to seek discharge of their student loans. The gainful-employment rule sought to hold career education programs accountable for graduating students with more debt than they could pay off.

The department is seeking nominations for negotiators from a range of constituencies as is typical in the rule-making process. Among them, are students, consumer advocacy groups, service member organizations and representatives of higher education institutions. It is also seeking representation from lawyers and compliance officers as well as business officers for universities, which reflects calls for more subject-area expertise on the panel. And the department created two slots for representatives from the for-profit sector on both panels -- one representing institutions with 450 students or fewer, and another representing larger institutions. And it added a slot for a representative of business and industry, such as a labor economist, to the gainful-employment panel.

The department also created a subcommittee for the borrower-defense panel that will focus on a review of the financial responsibility provisions of the rule. It plans to name negotiators from groups with expertise in financial accounting and the department's financial responsibility standards.

Both sets of rules were heavily criticized by for-profit colleges. But traditional higher ed institutions, including private nonprofits and historically black colleges, had warned that the financial triggers in the borrower-defense rule -- which were designed to protect the taxpayer when institutions failed -- would have negative consequences for their sectors.

The negotiations over both rules will take place over three four-day sessions. The borrower-defense committee will meet Nov. 13-15, Jan. 8-11 and Feb. 12-15. The financial responsibility subcommittee will meet Nov. 16-17, Jan. 4-5 and Jan. 29-30, although its meetings will not be public. The gainful-employment committee will meet Dec. 4-7, Feb. 5-8 and March 12-15.

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Charlotte Law Faced Criminal Probe While Seeking Federal Aid

For-profit Charlotte School of Law and its parent company, InfiLaw, were under criminal investigation as they sought to negotiate restoration of federal student aid for Charlotte students, according to recently unsealed court filings from a whistle-blower lawsuit filed against the school.

Politico and the Charlotte Observer first reported the criminal probe. The lawsuit, which was brought by a former Charlotte Law professor, and the court filings were unsealed this month after the Department of Justice said it would not intervene in the lawsuit for now.

The Department of Justice was looking into allegations in that lawsuit that Charlotte Law defrauded the federal government to receive Title IV federal aid funds by, among other actions, admitting unqualified students and conspiring to avoid compliance with its accreditor's standards.

The law school closed its doors earlier this month after it lost its license to operate in North Carolina. The closure followed several months of negotiations with the Department of Education to restore access to the federal student loan programs, which the Obama administration shut off in December. Charlotte Law's state license expired, however, before it could agree to conditions with the department for renewing Title IV funds.

A spokesman for the department did not comment directly on whether it was aware of the criminal probe while negotiations with Charlotte took place.

"ED works closely with our partners at the Department of Justice on cases of mutual interest," the spokesman said. "We do not comment on pending cases."

The American Bar Association's Section of Legal Education and Admissions, which serves as the accreditor for law school programs, said it was not informed of any criminal investigation. Two other for-profit law programs operated by InfiLaw -- Arizona Summit Law School and Florida Coastal Law School -- remain accredited by ABA. Arizona Summit, however, was placed on probation in March.

Two other related federal whistle-blower lawsuits have been filed against InfiLaw in Florida, where the company is based.

In a statement, a spokeswoman for Charlotte Law confirmed that as of February 2017 there was an ongoing investigation by the U.S. Attorney for the Western District of North Carolina but said there had not been any follow-up requests for information since November 2016.

"We have cooperated fully in the investigation and provided information that we believe satisfactorily answered the questions raised," said Victoria Taylor, the Charlotte spokeswoman.

It's not clear if the criminal investigation is ongoing. But Taylor said Charlotte officials were pleased that the Department of Justice had filed notice that it would not intervene in the lawsuit brought by the former professor.

"The allegations in the lawsuit are without merit, and Charlotte School of Law will defend itself vigorously against these claims," she said.

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Report: Boosting Quality More Effective Than Tuition Cuts

A newly released paper from the National Bureau of Economic Research finds that spending on improved educational quality is more effective for degree attainment than using the same funds to cut the cost of tuition. 

The paper, by Harvard education professor David Deming and University of California-Berkeley economist Christopher Walters, seeks to determine what is the most effective use of public subsidies to help more students graduate college. The authors found that price changes, while saving money for students and their families, had almost no effect on degree attainment. But spending on smaller class sizes and academic support like tutoring did more to get students across the finish line and graduate. 

 

 

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As Charlotte Law makes closure official, Education Department sets loan discharge rules

As Charlotte School of Law officially announces it will shut down, the Department of Education sets out potential options for former students. Those who withdrew from the troubled program before the spring will face a tougher path to discharging federal student loans.

UNCF Seeks Delay of HBCU Conference

The United Negro College Fund added its voice Wednesday to calls from other supporters of historically black colleges for the White House to delay the HBCU Week conference set for September.

In a letter to the White House, UNCF President and CEO Michael Lomax urged the Trump administration to reconsider its decision to go ahead with the conference. Lomax said the administration should instead focus on appointing an executive director of the White House HBCU Initiative and developing concrete commitments to black colleges.

"UNCF and our member institutions believe that these actions would best actualize the administration's commitment to HBCUs in lieu of the convening planned for September," Lomax wrote. "Further, UNCF will not release, as part of the conference, an important national HBCU economic impact study that we have commissioned if the conference occurs as planned."

The letter from Lomax follows calls to postpone the conference from Representative Alma Adams, the North Carolina Democrat who chairs the House HBCU caucus, and Johnny Taylor Jr., the president and CEO of the Thurgood Marshall College Fund. Omarosa Manigault-Newman, an assistant to the president and director of communications for the Office of Public Liaison, said in response that the conference will go ahead as planned Sept. 17-19.

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Mass. AG Sues Loan Servicer for Mishandling Loan Forgiveness Program

The loan servicer tasked with handling federal loan forgiveness programs overcharged borrowers and prevented them from making qualifying payments that would put them on track for loan forgiveness, Massachusetts Attorney General Maura Healey alleged in a lawsuit filed in Suffolk Superior Court Wednesday.

The Pennsylvania Higher Education Assistance Agency, which operates under the name FedLoan Servicing, exclusively administers the Public Service Loan Forgiveness program and the TEACH Grant program. Congress created PSLF to allow borrowers who made payments and worked continuously for employers in the nonprofit or public sector for 10 years to have their remaining student loan debt forgiven. And the TEACH Grant provides annual funding for teachers of certain subjects in low-income schools. Healey alleged in the lawsuit that PHEAA's mishandling of both programs has caused borrowers to lose out on financial assistance.

“This company’s actions have jeopardized the financial futures of teachers and public servants across the country,” Healey said in a statement. “These federal programs allow Americans from all backgrounds to dedicate their careers to serving others. My office will protect PSLF and hold PHEAA accountable for forcing these students further into debt.”

Her complaint alleges that PHEAA was made aware of servicing problems but has not addressed them.

The first borrowers to seek relief under PSLF won’t eligible to have their student loans discharged until later this year -- the program was enacted in 2007 and requires 120 monthly loan payments to qualify. That first group of borrowers will seek relief as significant questions arise about the future of Public Service Loan Forgiveness.

Republican lawmakers have raised concerns about escalating estimates of the long-term cost of income-driven repayment programs, which would result in substantial amount of debt forgiven through PSLF. And in his 2018 budget request, President Trump proposed eliminating Public Service Loan Forgiveness for loans taken out after July 1, 2018, fulfilling the fears of many supporters of the program.

Advocates have also raised concerns that the administration could undermine the program without ending it outright. In court filings earlier this year responding to a lawsuit brought by the American Bar Association, the Department of Education said assurances from FedLoan Servicing that a borrower was on track for loan forgiveness wouldn’t necessarily reflect the department’s final decision.

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Growing number of religious universities offer two-year degrees

A handful of religious universities are now offering two-year degrees, with a goal of work-force development and serving more low-income students.

U.S. Continues to Delay, Soften Gainful-Employment Rules

The U.S. Education Department announced this week that it has delayed the implementation of another element of the regulation that holds vocational programs accountable for their graduates' outcomes, and has eliminated some of the requirements on institutions to "reduce the burden" on them. The latest change, one of several the Trump administration has instituted to either delay or soften the so-called gainful-employment rules while it undertakes a wholesale rewrite of the regulations, postpones until next February the deadline by which programs subject to gainful employment must submit appeals of earnings data for their graduates. This is the second delay in that deadline.

The announcement also notes that the department will give programs that wish to challenge the government's data on earnings the ability to conduct and use data from their own survey of graduates' income. The department's announcement said the changes were in response to a federal court's ruling in June that partially blocked application of the rule to a group of cosmetology schools that challenged the rule.

In a news release responding to the department's announcement, the Center for American Progress asserted that the changes would "improperly allow hundreds of programs that leave their graduates with too much debt compared with their earnings to avoid sanctions."

“Weakening the appeals process is yet another extralegal action by the Department of Education to avoid enforcing a rule its political leadership does not like,” said Ben Miller, senior director for postsecondary education at the center.

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President Signs GI Bill Update Into Law

President Trump Wednesday signed an update of the Post-9/11 GI Bill into law after the bipartisan legislation swiftly made it out of both chambers of Congress.

The package of legislation will restore benefits used to earn credits at closed institutions such as those operated by Corinthian Colleges and ITT Tech, which enrolled a large number of veterans as students. It also lifts the current 15-year time limit for veterans to use their GI Bill benefits for postsecondary education.

And, among other provisions, the legislation expands student aid for members of the National Guard and reservists, and it grants full eligibility for GI Bill benefits to Purple Heart recipients, regardless of their length of service.

"This is a moment worth celebrating with our sisters and brothers who have -- and will have -- worn our nation's cloth. Thanks to the herculean effort of the veteran community and allies in Congress, student veterans today and in the future will enjoy lifetime access to the GI Bill," said Jared Lyon, president and CEO of Student Veterans of America, in a statement.

Education Secretary Betsy DeVos and Veterans Affairs Secretary David Shulkin released a joint statement lauding the legislation.

"This important legislation will give countless veterans and their families greater access to the education and work-force training they deserve," the statement read. "It will provide them the opportunity to invest in their futures with fewer restrictions and time limitations. We thank House Committee on Veterans’ Affairs Chairman Phil Roe and Senate Committee on Veterans’ Affairs Chairman Johnny Isakson for getting this bill passed so our nation’s veterans can access lifelong learning that will help them succeed in our 21st-century economy."

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11 Research Universities Start Aid Initiative

A consortium of research universities announced today that it is starting a new initiative to provide students with grants that help them face financial challenges as they near graduation.

The new initiative from the University Innovation Alliance -- which includes 11 public research universities -- will provide completion grants to students facing financial pressure in their last semester. Early data shows that about 4,000 Pell-eligible college seniors who are in good academic standing are at risk of being dropped from their classes or not allowed to graduate because they owe less than $1,000 to their institutions.

The emergency aid will be available to students this fall through funding from the Bill & Melinda Gates Foundation and Great Lakes Higher Education Corporation & Affiliates.

"Some well-intentioned policies or practices can become a barrier to student completion," said Bridget Burns, executive director of the UIA, in a news release. "By first tapping predictive analytics, our institutions have been able to more easily surface and address those barriers. Providing needed aid to students who are close to graduation is yet another example of how collaboration among our institutions is bringing new solutions to light."

The UIA member universities include Arizona State, Georgia State, Iowa State, Michigan State, Oregon State, Purdue and Ohio State Universities and the Universities of California, Riverside; Central Florida; Kansas and Texas at Austin.

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