studentaid

Report: Education Dept. to Back Kaplan, EDMC Deals

The Trump administration's Education Department will sign off on controversial acquisitions of two large for-profit college chains, according to a report by BuzzFeed, which cited department emails the publication said it obtained.

Purdue University in April announced its plan to acquire Kaplan University in a complex deal to create a new nonprofit online university. The state of Indiana approved the acquisition, and experts predicted the Trump administration would as well, given moves the department has made to roll back what it calls unnecessary or overreaching Obama-era regulations and to rule in favor of for-profits in some individual cases. The final and likely most difficult regulatory hurdle for the Purdue-Kaplan partnership, however, will come from the Higher Learning Commission, the regional accreditor for both universities.

The bid by the Dream Center, a nonprofit missionary organization, to purchase Education Management Corp. (EDMC) and its Argosy University, South University and Art Institutes campuses has drawn criticism. The offer is reportedly $60 million for institutions that collectively enroll about 60,000 students. Consumer, student and veterans' groups had urged the department to tightly scrutinize the deal, in part over concerns about a return to what critics said were predatory actions by some EDMC campuses.

One of several accrediting agencies that oversee EDMC already has rejected Dream Center's purchase of two Art Institute locations, citing insufficient information about the deal. Another accreditor, however, backed a portion of it.

BuzzFeed reported that the department "does not see any impediment to EDMC's request for approval of the change in ownership or its request for approval of nonprofit institution status."

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Dem Senators to CFPB: Keep Up Work on Loans

Senate Democrats Elizabeth Warren and Sherrod Brown in a letter Monday encouraged the Consumer Financial Protection Bureau to maintain active oversight of loan servicers and other participants in the student loan industry.

The Democrats wrote the letter to the CFPB's director, Richard Cordray, in the wake of a Department of Education decision to terminate two agreements with the agency involving oversight of student loan programs. That decision, the senators said, was another example of Education Secretary Betsy DeVos acting in favor of private student loan companies at the expense of borrowers.

The department, in ending the deals with CFPB, said the agency had used complaint data to inappropriately expand its jurisdiction. It also said the agency hadn't turned over complaints in a timely manner. Cordray, however, said the notice terminating the agreements was the first time he had heard any concerns about the agreements from the department.

The senators asked Cordray to provide copies of communication between CFPB and the Department of Education -- as well as the White House and other federal agencies -- about the termination of the agreements. They also asked Cordray to describe how CFPB used the information-sharing agreements to address problems in federal student loan programs, how the agreements helped federal student loan borrowers and how the termination of the deals would affect sharing of information between the agency and the department.

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CFPB Orders Student Loan Trust to Stop Collecting on Debt

The Consumer Financial Protection Bureau on Monday ordered a collection of trusts that hold billions in private student loans to stop collecting on debt and pay a settlement restoring harmed borrowers. 

The New York Times reported in July that judges in multiple states had tossed out debt collection lawsuits brought by National Collegiate Student Loan Trusts because ownership of the debts could not be verified. The CFPB's enforcement action found that the trusts had brought more than 2,000 such lawsuits without proper documentation in violation of consumer protection laws. And in many of those lawsuits, false or misleading affidavits were filed, the agency said. 

CFPB is seeking an independent audit of all 800,000 student loans held by the trusts. And it is ordering the trusts and their debt collector, Transworld Systems, Inc., to pay $21.6 million in payments to borrowers and civil penalties. 

A consent order against Transworld is effective immediately. A proposed judgment against the trusts will be effective if approved by the presiding judge in the U.S. District Court for the District of Delaware. 

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Session takes an early look at results from FAFSA filing changes

Students filed earlier and universities mailed awards earlier, but some ran into snags with setting tuition.

Support for State Free Tuition Programs Grows

A new poll from the Campaign for Free College Tuition shows support continues to increase for free college tuition programs that benefit academically qualified students.

Support for tuition-free state programs increased to 47 percent -- up 12 percent since CFCT started national polling in 2016. The poll also revealed that 78 percent of the public approve of the idea of free college tuition.

"CFCT's latest poll demonstrates the popularity of both federal and state programs that make college tuition-free," said Morley Winograd, president of CFCT, in a news release. "Both enjoy majority support from Democrats, Republicans and Independents alike, which contradicts recent commentary that the idea of free college is not popular among certain groups of voters."

Winograd said the poll highlights why tuition-free programs have taken off in red states like Arkansas, Kentucky and Tennessee, and in blue states like New York, Oregon and Rhode Island.

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VA Seeks Broad Waiver of Rule Barring Payments From For-Profit Colleges

The Department of Veterans Affairs intends to grant employees a waiver of a rule barring receipt of salary or other benefits from for-profit colleges.

The proposed regulation was published in the federal register Thursday and would take effect next month without "adverse comment."

A recent VA inspector general report found that two employees had violated the rule by working as adjunct instructors at for-profit colleges receiving VA benefits. The report recommended issuing waivers where no specific conflict of interest exists.

The proposal goes further, granting a waiver to all VA employees as long as they abide by certain other federal conflict-of-interest laws. Asked for comment, the VA's press office referred to language in the agency's notice of intent stating that the "statute has illogical and unintended consequences."

Carrie Wofford, president of Veterans Education Success, a group that focuses on fraud and abuse of student veterans, called the proposal "crazy." She argued it would allow employees at VA, which acts as a regulator of institutions receiving veterans' education benefits, to hold stock or receive gifts from those entities.

Will Hubbard, vice president of government affairs at Student Veterans of America, said he wasn't sure the proposal had a nefarious intent. But he said the timing was interesting considering recent changes the Department of Education has made to rules protecting students and certain personnel decisions at the department.

"We remain very committed to ensuring that student veterans continue to be the top priority of the Department of Veterans Affairs," he said.

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Senators to Introduce Bipartisan Perkins Extension

A bipartisan group of senators will today introduce legislation that would extend the Perkins Loan program, which is set to expire Sept. 30, for another two years.

Senators Tammy Baldwin, a Wisconsin Democrat; Bob Casey, a Pennsylvania Democrat; Susan Collins, a Maine Republican; and Rob Portman, an Ohio Republican, are co-sponsoring the legislation, which is identical to a bipartisan bill agreed to in 2015. Companion legislation has already been introduced in the House.

The program allows about 1,500 colleges and universities to make low-interest loans to students. The federal government hasn't funded the program for well over a decade. Instead, it is paid for mostly by borrowers repaying their loans.

Senator Lamar Alexander, the Tennessee Republican who chairs the Senate education committee, has called for Congress to end the program in order to simplify federal financial aid. His office had described the 2015 deal as a managed shutdown of the Perkins program. The White House budget released in May also proposed ending the program.

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Senate Bill Addresses Access for Homeless Students

Sen. Patty Murray, a Washington Democrat, and Sen. Ron Portman, an Ohio Republican, announced a bill Tuesday that aims to better connect homeless students and foster youth with the financial support they need to attend college. 

The bill would streamline the verification process to determine that a student is independent and remove requirements that they must have that status re-determined every year they are in school. It would also require that homeless and foster students be charged in-state tuition rates. And the bill would direct colleges and universities to publicize financial aid and resources available for those students and to set up a single point of contact on campus to help them find and obtain assistance. 

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Senate Bill Includes Restoration of Pell for Defrauded Borrowers

A Senate appropriations package approved last week would restore Pell Grant eligibility for defrauded borrowers, among other boosts to financial aid and college readiness programs.

The appropriations committee voted last week to approve the bill, which most notably boosted the maximum value of the Pell Grant to $6,020. It also restores Pell eligibility to student borrowers who were defrauded or misled by their institution and were approved to have their student loan cleared through a borrower defense claim. 

"While I believe we need to do more to strengthen our investments in Pell Grants and financial aid, I’m pleased this budget builds on the reinstatement of year-round Pell Grants earlier this year by increasing the maximum Pell Grant and restoring eligibility for students defrauded by predatory colleges," said Sen. Patty Murray, the ranking Democrat on the Senate education committee. "Too many defrauded students were left with a mountain of debt and no degree to show for it, so I’m proud we are taking this step in the right direction to give these students a second chance.”

The appropriations package also included language asking for updated guidance from the Department of Education on the Public Service Loan Forgiveness program; restores funding for a program supporting child care on college campuses; and maintains or slightly boosts funding for several financial aid and college readiness programs targeted for cuts in the White House budget.

Less popular among some higher ed observers was language directing the secretary of education to provide flexibility to colleges with poor cohort default rates on student loans. And the bill doubles the amount of time for institutions formerly accredited through the Accrediting Council for Independent Colleges and Schools to find a new accreditor. 

The spending package, which differs from a spending bill approved by the House, awaits a vote by the full Senate. 

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Extension for ACICS Colleges in Senate Funding Bill

A U.S. Senate Committee on Appropriations on Thursday approved a funding bill that includes an 18-month extension for colleges that are overseen by the Accrediting Council for Independent Colleges and Schools to find a new accreditor.

The Obama administration terminated ACICS, a controversial national accrediting agency that oversees many for-profit institutions. While ACICS's fate remains unclear, many of the 260 or so colleges it oversees must find a new accreditor or risk losing access to federal financial aid. Virtually all of those institutions are doing just that, the Center for American Progress said in June, citing information the group received via a public records request.

Under federal rules, colleges have 18 months to find a new accreditor when the department withdraws its recognition for an accrediting agency. Experts have speculated that some ACICS colleges will not be able to meet that deadline and would lose aid eligibility. However, the Republican-led Senate voted to double that time period -- by adding an additional 18 months -- in the budget bill the appropriations committee passed last week. However, the extra grace period does not apply if a college seeks to remain overseen by ACICS.

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