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June 3, 2019 — Lewis Burke Associates LLC
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A VIEW FROM WASHINGTON
Congress has continued its slow slog toward the reauthorization of the Higher Education Act (HEA) over the last month. The U.S. Senate Health, Education, Labor, and Pensions (HELP) Committee majority and minority staff have been sequestered in negotiations over the outlines of a comprehensive HEA reauthorization bill. Nevertheless, HELP Committee Chairman Lamar Alexander (R-TN) missed his optimistic goal of having a draft HEA bill released before June. Over in the U.S. House of Representatives, the Education and Labor Committee held two hearings on HEA-related topics in May, but the Committee is on a longer time frame, with HEA reauthorization one of the many issues it intends to address this year.
The House also has been moving forward with its fiscal year (FY) 2020 appropriations process, including Committee approval of the spending bill for the Department of Education (ED). The House bill, which is anticipated to be a high-water mark as compared to the Senate, would increase funding for student aid, student success programs, foreign language training, and education research, among other programs. Further details are included below.
ED released an updated College Scorecard, including new data tables on loan debt by field of study. ED also announced a new Experimental Site Initiative for Federal Work-Study and an expansion of the Second Chance Pell experiment. After a court struck down the Trump Administration’s proposed changes to the Borrower Defense regulations, the 2016 Obama-era regulations kicked in this month under much confusion for institutions on financial reporting requirements. ED will likely reissue new Borrower Defense regulations soon.
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CONGRESSIONAL UPDATES AND NEWS
House Committee Approves Education Funding Bill
On May 8, the House Appropriations Committee amended and approved its fiscal year (FY) 2020 Labor, Health and Human Services, and Education (Labor-HHS-ED) Appropriations bill. The bill would fund the Department of Education (ED) at $75.9 billion in discretionary funding, which is $4.4 billion above the FY 2019 enacted level and $11.9 billion above the President’s budget request for the agency. The bill fully rejected the President’s proposed cuts to student aid and higher education programs at ED and largely affirms the higher education community requests for FY 2020.
Proposals in the bill would provide $6,345 for the maximum individual Pell Grant award for the 2020-2021 school year, a $150 increase over the current maximum award level. The bill proposes increasing funding for the Title VI International Education and Foreign Language Studies programs, including a nearly $17 million increase, for a total of $89.13 million for those programs. The bill would also increase funding for the Institute of Education Sciences (IES), the Department’s education research arm, providing $650 million for the Institute, a $35 million increase above the FY 2019 enacted levels.
In terms of policy proposals, the report accompanying the bill notes concern with ED’s oversight of loan servicers, requires ED to report on both for-profit institutions receiving federal funding and borrower defense regulations, and criticizes ED for its failure to engage stakeholders and estimate the impact of ED’s proposed rulemaking on Title IX compliance. The report would also direct ED to report on efforts aimed at “improving the effectiveness of current federal policy in supporting first generation students.” The report also encourages ED to explore strategies for expanding Physician Assistant (PA) programs at Minority Serving Institutions (MSI) and expresses congressional support for engineering education efforts.
Sources and Additional Information:
House Ed and Labor Committee Holds Hearings on Barriers to Completion and MSIs
As a part of the ongoing conversation on reauthorizing the Higher Education Act (HEA), the House Education and Labor Subcommittee on Higher Education and Workforce Development heard testimony on the barriers that contribute to low completion rates of students across the higher education ecosystem. Citing completion deficits across race and socioeconomic status, Chairwoman Susan Davis (D-CA) argued “gaps do not reflect a lack of effort or desire on the part of students. They reflect the numerous barriers underserved students face throughout their educational careers.” She called on the committee to take make “bold” investments in student needs like food, housing assistance, healthcare, and childcare to ensure that students do not have to choose between their degree and their own or their family’s needs. In his opening statement, Ranking Member Lloyd Smucker (R-PA) emphasized that when considering solutions for non-completion, Congress should ensure that institutions have a stake in the success of their students.
Witness Sue Dynarski, Professor at the University of Michigan, noted that 65 percent of students at public, four-year schools and 76 percent of those at private, four-year schools graduate in six years, compared to only 35 percent of students who attend for-profit institutions. Professor Dynarski explained that low completion rates at for-profit institutions are particularly troubling as students at these institutions see no earnings boost from their credentials, take out higher debt, and are at increased risk of default on their loans. Kyle Ethelbah, Director of Federal TRIO Programs at the University of Utah, used his testimony to discuss the important role of TRIO programs in preparing students for college and supporting them after enrollment. Data from the University of Utah shows that first-generation students with TRIO support are almost twice as likely to graduate in six years as their first-generation peers without.
The Subcommittee also held a hearing, “Engines of Economic Mobility: The Critical Role of Community Colleges, Historically Black Colleges and Universities, and Minority-Serving Institutions in Preparing Students for Success." Witnesses and Members urged the passage of the Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act, which would reauthorize Title III, Part F of the Higher Education Act (HEA). There was also broad support for efforts to increase the number of faculty from underrepresented populations. Representative Mark Takano (D-CA) spoke about the importance of Asian American Native American Pacific Islander Serving Institutions (AANAPISIs) and increasing support for those institutions in HEA.
Sources and Additional Information:
House Approves “Kiddie Tax” Tweak
On May 23, the U.S. House of Representatives passed the retirement savings legislation, Setting Every Community Up for Retirement Enhancement (SECURE) Act (H.R. 1994), by a 417-3 vote. In addition to tax tweaks made to employer-provided retirement plans, the legislation also includes a repeal of the so-called “kiddie tax,” which affects low-income students receiving non-tuition scholarship and grant aid. The December 2017 tax reform law increased the tax rate, to the equivalent level for estates and trusts, for a child’s unearned income, which impacts federal benefits received by children of service members killed on duty. It also captured scholarship aid for non-tuition expenses, such as room and board. The SECURE Act would return the tax rate for child’s unearned income to the parent’s marginal tax rate.
While the Senate has interest in repealing the tax rate increase, particularly for children of deceased military members, the outlook for Senate action is currently complicated with disagreements regarding the expansion of 529 plans to cover homeschooling costs.
Sources and Additional Information:
Legislative Bills of Note
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S. 1346 (Senator Booker, D-NJ) – Simplifying Financial Aid for Students Act of 2019. This bill would establish eligibility for zero expected family contribution for students whose parents receive certain low-income benefits. The bill would also simplify the FAFSA form by using Internal Revenue Service (IRS) data to prepopulate the form with income and tax information and determine eligibility for maximum aid awards. Additionally, the bill would repeal suspension of financial aid eligibility for failure to register with the Selective Service System or for drug-related offenses, prohibit the inclusion of certain “unnecessary and burdensome” questions, and establish federal student aid eligibility for DREAMers, among other provisions.
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S. 1354 (Senator Durbin, D-NJ) – Student Loan Borrower Bill of Rights. This bill aims to increase student loan transparency regarding transfer or sale of loans, identification of borrowers as at-risk of default, and eligibility for alternate repayment options and benefits. The bill would also limit borrower liability for late fees, require timely resolution of servicer errors, prevent servicers from prohibiting borrowers’ ability to bringing lawsuits, and establish other resources and consumer protection provisions aimed at protecting student loan borrowers.
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S. 1292 (Senator Rubio, R-FL) – Leveraging Opportunities for Americans Now (LOAN) Act. This bill would eliminate interest on federal direct student loans and replace it with a one-time, non-compounding fee to be paid over the life of the loan. This fee would be reduced if borrowers pay back more on their loan than required. The bill would also place all student loan borrowers on income-based repayment plans as the default, with the option to switch to a 10-year repayment plan.
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H.R. 2747/S. 1492 (Rep. Pocan, D-WI/Senator Murray, D-WA) – Tyler Clementi Higher Education Anti-Harassment Act of 2019. This bill would require institutions of higher education to establish policies prohibiting harassment based on race, gender, sexual orientation, nationality, disability, or religion, and update students and employees of this policy annually. It would also authorize grants to institutions of higher education for establishment or expansion of harassment prevention, training, or counseling programs.
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S.1496 (Senator Warner, D-VA) – Empowering Students through Enhanced Financial Counseling Act. This bill would require institutions of higher education to provide annul counseling to federal student loan borrowers, including both students and parents, and require borrowers consent each year before receiving their student loans. The bill would also require annual counseling be provided to Pell Grant recipients and require the Secretary of Education publish an online tool to assist institutions in providing the required counseling.
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ADMINISTRATION AND AGENCY UPDATES AND NEWS
ED Announces New Work-Study Experiment Opportunity
The U.S. Department of Education (ED) released a notice inviting institutions of higher education to apply to participate in a new institutional experiment under the Experimental Sites Initiative (ESI). Under the ESI, the Secretary of Education has authority to grant waivers of certain federal student aid statutory or regulatory requirements. This allows a limited number of institutions to participate in experiments to test alternative methods of administering title IV, Higher Education Act (HEA) programs. ED is interested in testing the following changes to the Federal Work-Study (FWS) program:
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“removing limits on the portion of an institution’s FWS funds that may support students employed by private-sector companies,
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increasing the number of hours per week an FWS student who is enrolled in a work-based learning program may work,
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reducing the share of wages that must be covered by private-sector employers; and
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allowing institutions to pay low-income students for work experiences required by their program, such as student teaching and clinical rotations.”
ED is interested in determining whether these changes increase “employer-institution partnerships,” expand the availability and types of off-campus jobs, increase the number of work-based learning opportunities (such as apprenticeships), and how FWS opportunities align with the academic programs of students, particularly those in the liberal arts and humanities. The notice states that “internships, apprenticeships, and other work-and-learn opportunities provide high-quality educational opportunities.” In keeping with the Administration’s focus on increasing apprenticeships, ED is interested in determining if this experiment will provide the “needed incentive to attract more businesses to participate in apprenticeships.”
Letters of interest to participate in the experiment must be received by July 8, 2019 and be submitted to the following email address: experimentalsites@ed.gov.
Sources and Additional Information:
President Trump Announces Cybersecurity Workforce Executive Order
On May 2, President Trump publicly released the Executive Order on America’s Cybersecurity Workforce. This order states that the U.S. cyber workforce, both private and public, is a “strategic asset” that must be strengthened through training opportunities, such as work-based learning and apprenticeships, for both young employees and those advanced in their careers. The Executive Order asks that the Secretaries of Commerce and Homeland Security partner with the Secretary of Education to develop a process that would include federal, state, academic, and private-sector stakeholders to address national cybersecurity workforce needs through assessments and recommendations. The order also directs the Secretaries of Commerce, Education, Labor, Homeland Security, and other relevant agencies to encourage public and private stakeholders to integrate the National Initiative for Cybersecurity Education Cybersecurity Workforce Framework (NICE Framework) in current education, training, and workforce development programs.
Sources and Additional Information:
Federal Judge Temporarily Blocks “Unlawful Presence Policy”
On May 3, a federal judge temporarily blocked the Trump Administration’s policy that would make it easier for international students to accrue “unlawful presence” in the U.S and face re-entry bars of three or 10 years. This policy, stated in a 2018 U.S. Citizenship and Immigration Services (USCIS) memo, would affect students with F, M, or J nonimmigrant visa status. Under the 2018 policy, international students would start accruing unlawful presence the day after a visa violation occurs. However, while the temporary injunction stands, USCIS will continue to follow a 2009 unlawful presence memo that states unlawful presence accrues after an immigration judge or officer finds a violation of the status.
Sources and Additional Information:
DHS Raises Student Visa Fees
Last adjusted in 2008, the Department of Homeland Security (DHS) announced its final rule to adjust its Student and Exchange Visitor Program (SEVP) fee schedule for nonimmigrant student applications, school certification petitions, school site visits, school recertification petitions, and appeals. This also includes a new fee when filing the Form I-901, which must be paid and filled out prior to applying for a visa to enter the United States as a student or exchange visitor. According to SEVP, these adjustments are made “to ensure recovery of costs necessary to meet national security, customer service, and adjudicative processing goals.” The increased fee levels, which will lead to an estimated revenue increase of $75.2 million in FY 2019 as compared to previous years, will allow for SEVIS modernization and increased personnel.
The new fees are set to begin on June 24, 2019. The new fees can be found here.
Sources and Additional Information:
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2020 PRESIDENTIAL ELECTION
More Democratic Presidential Candidates Make Higher Education a Top Issue
Julián Castro, former Mayor of San Antonio and Secretary of Housing and Urban Development under President Barack Obama, recently rolled out his higher education platform which includes the elimination of tuition at all public colleges and universities. He also included a targeted debt relief plan that would allow deferment until the student’s income is at least 250% above the federal poverty line. Castro, like many other 2020 candidates, has also come out vocally against for-profit colleges.
Representative Seth Moulton (D-MA) has put out a less conventional plan to address college affordability. He would expand national service opportunities for young people including the creation of a new “Green Corps” to fight climate change. In exchange for service, students would have a portion of their tuition at an in-state university paid or receive an amount toward vocational training. He has said that he expects this to create a cultural change as public service becomes “not a requirement, but an expectation.” Many other candidates have called for a similar program, but Moulton’s plan is the only that has been fully developed so far.
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FACTS AND FIGURES
National Student Clearinghouse Research Center: Change in Estimated National Enrollment by Sector
"In spring 2019, overall postsecondary enrollments decreased 1.7 percent from the previous spring. Figure 1 shows the 12-month percentage change (fall-to-fall and spring-to-spring) for each term over the last three years. Enrollments increased 3.2 percent at four-year private nonprofit institutions, but this increase was largely due to the recent conversion of a large for-profit institution to nonprofit status. Enrollments decreased among four-year for-profit institutions (-19.7 percent), two-year public institutions (-3.4 percent), and four-year public institutions (-0.9 percent). Taken as a whole, public sector enrollment (2-year and 4-year combined) declined by 1.9 percent this spring."
Source: https://nscresearchcenter.org/currenttermenrollmentestimate-spring2019/
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WHAT WE'RE READING
Education Dive: Is Change Coming to Federal Work Study?
“Although the $1 billion in funding for FWS each year is relatively small compared to the $28.2 billion spent on Pell Grants in 2017-18, its time in the spotlight may have come. With momentum building for reauthorization of the Higher Education Act, several policy proposals and industry-backed bipartisan legislation are poised to change the federal student employment program.”
Source: https://www.educationdive.com/news/is-change-coming-to-federal-work-study/555177/
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