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The Changing Higher Ed podcasts are hosted by Dr. Drumm McNaughton, Principal Consultant and CEO of The Change Leader, a higher education consulting firm.
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  2. Washington Update with Tom Netting | Changing Higher Ed 025

Aug 4, 2019

Federal legislators and policymakers continue to try to work through policy and legislative changes that will have significant impacts on higher education. These include efforts by the U.S. Department of Education to alter rules developed during the Obama Administration. In addition, Congress continues to focus on trying to come up with a workable plan to update the Higher Education Act.

Regulatory Activity

The Department of Education has been attempting to make a number of revisions to rules created during the Obama Administration. Most recently, the Department made a seismic shift on gainful employment on June 28. The department soft-launched a final rule that overturns the 2009-2010 regulations as well as the 2014 regulations, including Subpart Q and R, and drops the mandated reporting requirements, student warnings for programs that were deemed failing and any further notification or follow-up of pending appeals with the department.

Because of the master calendar, the full rescission was to be effective on July 1, 2020; however, Secretary of Education Betsy DeVos used her authority to allow institutions to begin to follow this new rule after it was published in the Federal Register.

The Department did attempt to fill the void in accountability after rescinding the rules. The Department plans to make significant changes to the College Scorecard by adapting much of the previously required information and create additions that would address disclosures. This change would offer transparency by allowing students to see this information (although it doesn’t address programs that are performing at a “lesser than” level).

Some people have expressed frustrations and concerns about these changes but it’s good to remember that over the years, educational policymakers and stakeholders have learned a lot. Therefore, this approach to disclosure may be better than using a guillotine on institutions. Moving forward, policymakers and institutions can continue to learn more about improving institutional assessment using the three-legged stool: accreditation’s oversight of curriculum; state review of institutions based on their role and responsibilities; and the Department of Education’s focus on oversight and financial aid.

Additionally, more changes are expected on the regulatory side. The Borrower Defense to Repayment regulations have been approved to go forward, although they are expected to be subject to court challenges once published. They are now with the Office of Management and Budget and should be published in the near future.

In addition, three packages that were part of the most recent round of federal negotiation and rulemaking on accreditation and innovation were approved by consensus. The Department published a notice in May/June that the first of those packages was subject to notice of proposed rulemaking so that interested parties could review. That feedback was due by July 12. The other two packages still have to come out. Because there was consensus, these packages are on their way to final rule by Nov. 1.

However, there are three major areas where disagreements still continue. These areas includes institutional eligibility and accountability, Title IX/Cleary and loan repayment.

The concerns about Title IX/Cleary are at the forefront of the Senate HELP Committee’s discussion about reauthorization. These final rules probably won’t be agreeable to both parties. Democrats are concerned about protecting the interest of the victims while Republicans are focused on providing protection to the accused. Thus, the Senate committee is having difficulty finding a balance between offering protections to both parties. Upper-level legislative staff are currently in dialogue to try to find common ground.

Concerns also exist about loan repayment. These include the opportunity for public service loan forgiveness, other types of loan forgiveness and the reduction of overall repayment plans.

Higher Education Act

With a short timeline available in the legislative process before the election cycle takes over, it’s becoming less likely that the reauthorization of the Higher Education Act will take place. Sen. Alexander, Sen. Murray and staff continue to hold weekly meetings as well as have discussions with members of their respective parties to see if they can come up with a comprehensive bill.

There are pieces of reauthorization that everyone can come to terms with because they are much needed and in the best needs of students. These areas include student loan interest rates, financial literacy, loan repayment and simplification of the FAFSA.

Sen. Alexander is focused on his burnishing his legacy by trying to pass revisions to the Higher Education Act. The question becomes whether he will be able to negotiate a bill that Democrats agree with or will end up crafting one that is specific to the Republican agenda. He also may focus on developing smaller bills that are bipartisan in nature that move smaller chunks through the legislative process. Discussions already have begun about alternate plans in case a comprehensive bill is not agreed upon.

In the House, Chairman Scott has completed five bipartisan hearings that he and ranking member Fox agreed to. The committee will have one more hearing on apprenticeships. There remains a question about whether the House would take up the Higher Education Act in different forms, such as the piecemeal version mentioned earlier. Some insiders suggest that Chairman Scott is only interested in taking up a comprehensive bill.

As we enter the second half of 2019, there is a lot of movement going on in the Congress -- and no assurance as to how things will play out. Netting will be surprised if reauthorization is completed this year. The Democrats probably won’t have time to put together a comprehensive bill unless they simply use the AIM Higher Act. However, that act has major issues from a scoring perspective and would need to be trimmed to make it fiscally palatable to Republicans.

Trying to find middle ground going into an election year makes it tough. However, history shows that this type of collaborative effort can happen in an election year.

Higher education—especially in areas such as student cost, student debt and academics--has changed significantly since the last authorization in 2008. Therefore, college students and the higher education system deserve a more timely authorization process.

Recommendations for Higher Education Leaders:

  • Keep an eye on what is happening on the regulatory front. This could especially impact the functions of the financial aid office, human resources office and law enforcement office.
  • Take the opportunity to make comments about proposed rules. Higher education leaders’ comments need to come from a holistic institutional perspective.
  • Watch for a Senate bill to reauthorize the Higher Education Act moving forward between July and the end of September. If legislation doesn’t start moving in September, the chance that Congress will pass legislation will start dwindling as the election cycle approaches.
  • Review the College Scorecard and the proposals in relation to it for the upcoming changes.

Bullet Points

  • The U.S. Department of Education continues to revise and reverse rules created during the Obama Administration.
  • The most recent revision involves gainful employment. This revision drops the reporting requirements. The department plans to include some of these deleted reporting elements in the College Scorecard.
  • The Borrower Defense to Repayment regulations have been approved to go forward. These are now with the Office of Management and Budget and should be published in the near future.
  • Three packages that were part of the most recent round of federal negotiation and rulemaking on accreditation and innovation were able to achieve consensus.
  • Major disagreements still are evident in the rule-making process for institutional eligibility and accountability, Title IX/Cleary and loan repayment.
  • With the election cycle on the horizon, it’s becoming less likely that Congress will complete the reauthorization of the Higher Education Act. Therefore, there may be an effort to offer piecemeal solutions to areas where Republicans and Democrats can find common ground. These areas include student loan interest rates, financial literacy, loan repayment and simplification of the FAFSA.

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