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Department of Education to Release Gainful Employment Rule Tomorrow Morning

Posted in Gainful Employment, Higher Education News, Higher Education Policy, Uncategorized

CONTRIBUTED BY
Dennis Cariello

Politico has just reported that the Department of Education will be releasing the gainful employment rule tomorrow morning.  From the reports, it appears that the rule is substantially similar to the one discussed at the December 13, 2013 negotiated rule making session.   The rule should appear on the Department’s website Friday morning.

Department of Education Sends Proposed Gainful Employment Rule to the Office of Management and Budget

Posted in Gainful Employment, Higher Education News, Higher Education Policy, Uncategorized

CONTRIBUTED BY
Dennis Cariello

As reported on the website for the Office of Management and Budget (OMB), on January 30, the Department of Education (Department) sent its version of the gainful employment (GE) rule to OMB (specifically, the Office of Information and Regulatory Affairs (OIRA)) for review.  Pursuant to Executive Order 12866, this review process typically lasts up to 90 days, with a possibility of a 30 day extension – although it is possible for this process to take longer.

For those that haven’t been following the ins and outs of the GE negotiated rulemaking, in late August/early September the Department proposed a “gainful employment” rule designed to impose a return on investment calculation for programs that are designed to lead to gainful employment in a recognized profession (namely, nearly all programs at proprietary schools, and certificate programs at nonprofit schools).  This proposal was very similar in form to the rule it published in 2011, containing debt-to-income and debt-to-discretionary income measures, but without the repayment rate that was invalidated by a judicial decision in June 2012.  In November, it greatly modified that proposal, including a programmatic cohort default rate — that is, applying the institutional cohort default rate regulations to each program — and added a repayment rate metric, which requires that the relevant cohort of borrowers (all students that left a program in their third and fourth years of repayment) have reduced the principal amount of the loans owed during the cohort period (the portfolio cannot be “negatively amortized”).  In December, however, the Department further revised the proposal, including eliminating the repayment rate metric.  For those interested, the Department maintains a website that has all the proposals from the Department and the negotiators, as well as additional data and analysis.

Given the fairly quick turnaround from the last session (December 16, 2013), my guess is the GE rule at OMB now is fairly consistent with the rule proposed prior to the December 16 negotiation session.  This would mean that a few of the December changes to the rule – (1) the lack of  a repayment rate; (2) a programmatic cohort default rate of 40% or more is no longer grounds for immediate loss of Title IV eligibility; (3) programs can avoid failing by providing students with institutional scholarship to reduce their debt burden; (4) programs are only charged with the debt incurred by students up to the level of tuition and fees charged – would likely be in this version.  It is unclear what the Department would do with other ideas expressed at the negotiation table, but for which there was a lack of data or time to evaluate.  One such proposal was exempting “exceptional performers” — schools with a three-year Cohort Default Rate below 10% — from having to comply with the rule.

Pursuant to Executive Order 12866 (as amednded by Executive Order 13563), OIRA must provide the public with “meaningful participation in the regulatory process.”  This typically means that persons or entities effected by a proposed rule may attempt to schedule time with OIRA to discuss the rule.  This can be a useful meeting, as OIRA typically reviews proposed regulations with a different perspective than the issuing agency.  However, a log of such meetings is publicly available (non-federal employee attendees are listed) and documents provided to OIRA can also be made available to the public.

Article on OCR’s Letter Regarding Rights of Disabled On Rights of Disabled Students to Participate in Extracurricular Activities

Posted in Athletics, Civil Rights & the Constitution, Department of Education, Higher Education News, Higher Education Policy

CONTRIBUTED BY
Dennis Cariello

A few months back, we discussed a dear colleague letter the Department of Education’s Office for Civil Rights published related to the rights of of disabled students to participate in extracurricular activities.  Subsequently, we had the opportunity to publish a longer article in Bloomberg/BNA Law Week.   As always, your comments are most welcome.

In the Tax Reform Crosshairs: The Advertising Deduction

Posted in Higher Education News, News from the Hill, Tax Issues

CONTRIBUTED BY
Dennis Cariello

Under current law, advertising costs are fully deductible as an ordinary business expense. As our DLA Piper colleagues Evan Migdail and Bruce Thompson write in a new client alert: “Both the House and Senate Tax Committee chairmen are considering proposals to limit the deduction for advertising expenses.”

As they report, Senate Finance Committee Chairman Max Baucus (D-Montana) has released a detailed discussion draft on business tax reform which includes a proposal to limit the advertising deduction to 50 percent, with the balance amortized over 5 years.  In that proposal (see page 104),  an “advertising expenditure” is defined (starting on page 105) as any expenditure paid or incurred for the development, creation or placement of advertising, or for any similar activity with respect to advertising. “Advertising” is defined as any message or other programming material which is broadcast or otherwise transmitted, published, displayed or distributed and which promotes or markets any trade or business, service, facility or product.  Importantly, “any amounts paid to employees and contractors for performing sales functions” are excluded from the definition of advertising.

Crucially, “House Ways and Means Committee Chairman Dave Camp (R-Michigan) is said to have a similar provision in his tax reform plan – which has yet to be released – limiting the deduction to 50 percent, with the balance amortized over 10 years.”  Given the apparent agreement on this point (at this time), this proposal must be treated as serious.

It remains to be seen, however, whether certain functions – such as online lead generation – will be classified as “advertising” or whether amounts paid for lead will be classified as “amounts paid to . . . contractors for performing sales functions.”

For more, please look at the client alert.

According to New NCES Study, Proprietary Higher Education Reduces Costs for Students by Over 10% Since 2007-08

Posted in Department of Education, Higher Education News, Uncategorized

CONTRIBUTED BY
Dennis Cariello

Yesterday, the National Center for Education Statistics released the 2011-2012 National Postsecondary Student Aid Study.  This report focuses on the average price of attendance paid by students to attend institutions of higher education (price of attendance includes tuition, fees, books and materials, housing, food, transportation, and personal expenses), and also specifies the “net price” (price of attendance, less grants) and the out-of pocket expenses (price of attendance, less grants and other aid, such as loans or work study).

There are a few findings of note, as we try to show below, which is derived from Tables 1-3 in the study:

2011-12 – Full Time Undergraduate Students

Institution Type

Public 2-year Public 4-year Private Nonprofit 4-year Private For-profit 2-year Private For-profit 4-year Private For-profit 2-year or more
Annual Price of Attendance $15,000 $23,200 $43,500 $29,700 $29,200 $29,200
Net Price $7,100 $14,300 $23,000 $18,600 $16,600 $17,100
Net “Out of Pocket” $6,000 $9,600 $15,000 $12,400 $9,000 $9,900

2007-08 – Full Time Undergraduate Students

Institution Type

Public 2-year Public 4-year Private Nonprofit 4-year Private For-profit 2-year or more
Annual Price of Attendance $13,600 $20,400 $38,800 $32,900
Net Price $6,400 $13,200 $22,300 $20,300
Net “Out of Pocket” $5,600 $8,800 $14,200 $11,500

From the chart below, what we see is that while higher education overall has increased the cost of attendance over the last four years, for-profit institutions have actually reduced the cost of attendance:

Institution Type

Public 2-year Public 4-year Private Nonprofit 4-year Private For-profit 2-year or more
2011-12 Annual Price of Attendance $  15,000.00 $  23,200.00  $  43,500.00  $  29,200.00
2007-08 Annual Price of Attendance $  13,600.00 $  20,400.00  $  38,800.00 $  32,900.00
Difference  $    1,400.00  $    2,800.00  $    4,700.00  $  (3,700.00)
Percentage Change

10.29%

13.73%

12.11%

-11.25%

2011-12 Net Price of Attendance  $    7,100.00  $  14,300.00  $  23,000.00 $  17,100.00
2007-08 Net Price of Attendance  $    6,400.00  $  13,200.00  $  22,300.00  $  20,300.00
Difference  $        700.00  $    1,100.00  $        700.00  $  (3,200.00)
Percentage Change

10.94%

8.33%

3.14%

-15.76%

Note, I have not considered students as a whole because part time students, which are disproportionally located at for-profit and 2-year public colleges, would have the effect of lowering the average and net price price.  So, by looking at full-time student, we get a fairly apples-to-apples comparison.

******

The reduction in cost of attendance at for-profit schools, relative to the industry, is fairly dramatic.  Looking at net price – which is fairer to private non-profits which commit substantial sums to institutional scholarship – we see a significant reduction in the cost gap between for-profit schools and public colleges.  In fact, on average, a four-year public college will only cost $2,300 less (net price) than one at a for-profit 4-year college.

There are, no doubt, reasons for all of this.  Declining state expenditures on higher education have forced public institutions to raise tuition.  On the other hand, proprietary schools, and to a lesser extent, private non-profit institutions, have had reasons to reduce price or commit to large institutional scholarships to attract students in the face of declining student demand.  It is, however, a positive story that proprietary institutions have responded to consumer demand and reduced price.  I do wonder how much further price would be lowered if the 90/10 rule were repealed.

Notes from the FSA Conference Day 1

Posted in Department of Education, Financial Aid (Loans & Grants), Higher Education News, Higher Education Policy

CONTRIBUTED BY
Patricia V. Edelson

As usual, the it is a well attended conference Federal Student Aid (FSA) Conference here in Las Vegas is well attended.  It is nice to catch up with so many friends from schools and the Department of Education.  It is also a great opportunity to here about the upcoming initiatives for FSA and what FSA thinks schools should be focusing on.

The first day of the conference opened with a General Session and welcome.  The presenters for this session were FSA COO Jim Runcie, Jeff Baker, and Lynn Mahaffie.   They provided various updates concerning Department of Education’s Title IV activities and initiatives.  They also mentioned that there will be an experimental site announcement in an upcoming federal register.  Also, FSA encouraged schools to adopt the Shopping Sheet that was introduced last year.  While it is still not a requirement except for military students, currently 19,000 schools have signed up to use it.

One hot topic was the impact of the unconstitutionality of the Defense of Marriage Act (DOMA) on student aid. As you may recall, last term, the Supreme Court overturned DOMA and, as a result, the federal government must recognize marriages between same sex couples for federal benefit purposes.  For aid purposes, this means that if a student (or parent of a dependent student) is legally married they would file the FASFA as married, regardless of gender. This is effective in the current year and appropriate language will be included in the 2014/2015 FAFSA. Students (or parents) who are in a same sex marriage, but who already filed their 2013/2014 FAFSA, but could have filed married at the time they filed, may now correct their ISIR and file married. They may correct marital status, but are not required to. New filers must file married and a DCL will be coming out early next week with guidance. “Legally married” applies regardless of State of current residence. Conversely, if parents aren’t married but living together they will be required to report both incomes.

New on the verification horizon, the Department has eliminated the verification group V2, which required verification of SNAP benefits and added a new Group V6 that will require verification of income in cases where income and household size are inconsistent.

The upcoming negotiated rulemaking sessions were also discussed, and special note was made of the upcoming sessions related to VAWA and the Clery Act regulations, as well as the use of third parties to disburse Title IV aid.

 

Supreme Court Declines to Hear Liberty University’s Challenge to Affordable Care Act Suit

Posted in First Amendment, Health Care, Higher Education News

CONTRIBUTED BY
Dennis Cariello

As reported by multiple sources on Monday, the U.S. Supreme Court  declined to wade into the constitutionality of the Affordable Care Act’s (ACA) employer mandate.  Liberty University, a Christian university in in Lynchburg, Virginia, challenged the law’s employer coverage requirements, individual mandate and contraception coverage requirements as violative of the commerce clause.  Of particular note was Liberty University’s argument that the ACA and its implementing regulations violated the university’s religious rights by forcing Liberty University and its officials to fund abortions and to provide contraceptives.  While a lower court upheld the law in Liberty’s case, the Supreme Court took two other cases, brought by the Hobby Lobby craft-store chain and Conestoga Wood Specialties, that focus specifically on the law’s contraception coverage requirement and these for-profit companies’ claim of religious exemption.

On December 3rd, House Subcommittee to Discuss Proposals to Strengthen Pell Grant Program

Posted in Financial Aid (Loans & Grants), Higher Education News, Higher Education Policy, News from the Hill

CONTRIBUTED BY
Dennis Cariello

On Tuesday, December 3rd at 10:00 a.m. in room 2175 of the Rayburn House Office Building, the Subcommittee on Higher Education and Workforce Training, chaired by Rep. Virginia Foxx (R-NC), will hold a hearing entitled, “Keeping College Within Reach: Strengthening Pell Grants for Future Generations.”  The hearing will be webcast for those not able to attend.

The witnesses for the hearing will be:

Mr. Justin Draeger
President and CEO
National Association of Student Financial Aid Administrators
Washington, D.C.

Dr. Jenna Ashley Robinson
Director of Outreach
John W. Pope Center for Higher Education Policy
Raleigh, North Carolina

Mr. Michael Dannenberg
Director of Higher Education and Education Finance Policy
The Education Trust
Washington, D.C.

Mr. Richard C. Heath
Director, Student Financial Services
Anne Arundel Community College
Arnold, Maryland

Case Notes: Supreme Court Declines to Hear University Free Speech Cases

Posted in Case Notes, First Amendment, Higher Education News, Litigation News

CONTRIBUTED BY
Kimberly Mitchell

The Supreme Court recently denied certification in two free speech cases involving decisions made by public universities, Dixon v. University of Toledo and Ed Ray v. OSU Student Alliance.

In Dixon, a former interim Associate Vice President for Human Resources at the University of Toledo petitioned the Court to determine whether the Sixth Circuit properly held that the  University did not violate her First Amendment rights when it fired her for publishing an opinion editorial on gay rights and the denial of certain health benefits to University employees in same-sex relationships.  Dixon argued that she wrote the editorial as a private citizen addressing a public concern and, therefore, the Sixth Circuit erred by upholding the University’s action under the “policymaker exception,” which favors the employer when a policymaking employee engages in speech on a policy issue related to his/her position.  The Supreme Court denied certification, leaving a split amongst the circuits over who qualifies as a policymaker for the purpose of resolving conflicts between a government employee’s free speech rights and a government employer’s right to terminate employment.

In Ed Ray, Oregon State University (OSU) petitioned the Court for review of the Ninth Circuit opinion holding that university officials may be individually liable for violating the constitutional rights of a group of student journalists.  In this case, unknown university employees confiscated news bins distributing a conservative student newspaper.  The Ninth Circuit held that the student journalists adequately pled that the University violated their Free Speech, Equal Protection and Due Process rights. The Court also held that the complaint properly tied theses violations to the four individual defendants, who were senior University officials, despite that the students did not know the identities of the employees who threw the news bins into the trash or who gave the order to confiscate the bins.  The University’s petition challenged whether a government official can be held liable under 42 U.S.C. § 1983 if he/she had knowledge of unlawful conduct or action, or whether the government official must have themselves engaged in some unlawful conduct or action.  The Supreme Court declined to clarify this issue, which originated from language in the Supreme Court’s pleading standard case, Ashcroft v. Iqbal, 556 U.S. 662 (2009).

Department of Education Announces Negotiators for Rulemaking Concerning the Violence Against Women Reauthorization Act of 2013

Posted in Clery Act, Department of Education, Higher Education News, Higher Education Policy

CONTRIBUTED BY
Dennis Cariello

Following up on our prior coverage of this rulemaking session, late last week, the U.S. Department of Education (Department) announced the negotiators for the rulemaking session seeking to “prepare proposed regulations to address the changes to the campus safety and security reporting requirements in the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, made by the Violence Against Women Reauthorization Act of 2013 (VAWA).”  The negotiations sessions, which start on January 13-14, 2014 (and continue on February 24-25, and then end on March 31-April 1), run from 9:00 a.m. to 5:00 p.m. and will be held at the Department’s office at 1990 K Street, N.W., Eighth Floor Conference Center, Washington, DC 20006.  Gail McLarnon was named the Department’s negotiator.

Additional information, including the original Federal Register Notice, can be found on the Department’s VAWA Negotiated Rulemaking web site.  This will be an interesting session and will attempt top answer a number of difficult questions.  My presentation on the changes required by VAWA tries to highlight a few of the more thorny topics.

 

Final Gainful Employment Rulemaking Session Scheduled for Friday, December 13

Posted in Department of Education, Education Data & Statistics, Gainful Employment, Higher Education News, Higher Education Policy

CONTRIBUTED BY
Dennis Cariello

Politico’s Libby Nelson, in today’s “Morning Education” email (and in a tweet on Black Friday) reports that the U.S. Department of Education “has scheduled its third session of negotiated rule-making on the ‘gainful employment’ rule for Dec. 13 from 9 a.m. to 5 p.m. at the Education Department’s 1990 K St. offices, according to an email sent to negotiators Friday.”  This is also the last day of the next NACIQI meeting (the Department’s advisory committee on accreditation).  In case you are curious, 1990 K Street is no where near 415 New Jersey Ave. NW. (where the NACIQI sessions will be held).

As you may recall from our past reporting, one of the purposes of this session is to review data on the anticipated effect of the proposed rules.  It will be interesting to see how these various rules shake out and if there are a number of programs that would pass the debt metrics proposed in September, but would fail the new measures proposed by the Department before the last session.

UPDATE (8:23 PM): The Federal Register has the pre-publication notice for the new session.  Nothing else of note in the notice.

Some Thoughts on the Latest Round of Gainful Employment Negotiated Rulemaking Part 2

Posted in Department of Education, Gainful Employment, Higher Education News, Higher Education Policy

CONTRIBUTED BY
Dennis Cariello

Something that seems clear after two rounds of negotiated rulemaking is the lack of trust those aligned with consumer advocates have for proprietary schools.  As I recall, one negotiator suggested they needed to think “deviously” when considering how a proprietary school would game the rules.  I understand these folks hear some very sad and angering stories from students that have been legitimately harmed – and we need to protect those students that are treated unfairly at any institution.  But, as one negotiator said, “the plural of anecdote is not data.”  The vast majority of schools are attempting, in good faith, to help their students improve their lives through education and, in fact, are doing a pretty good job providing students with the skills and education sought.  Even the NY Federal Reserve – in a report I will discuss in another post – noted that proprietary schools offering two-year degrees and certificates have completion rates that are “reasonably good” (57% graduate in 150% of normal time for two-year degrees, 66% graduate in 150% of normal time for degrees under two years).  Indeed, the proprietary school negotiators selected by the Department are sterling examples of my point.

The issue came to a head, I think, as related to Marc Jerome’s proposal to, in essence, be able to supplant student borrowing with institutional aid if that program has failed for one year to meet the debt-to-income or debt-to-discretionary income test.  As I see it, this is a very pro student proposal; in essence, he wants the ability to give away money to students to keep them from borrowing.  It would be done with the knowing consent of the students (they’d have to sign a document, presumably showing how much they could have borrowed and that they are not going to take out a loan for that amount and will instead get funds from the school).  The questioning however, was as intense as it’s been about anything else.  Concerns were expressed about letting a failing program have a “second bite at the apple,” and how schools would use this to game the rules – including finding ways to raise tuition and use this to reset the bar at the upper limit of the metric set by the Department.  It seemed, amidst these attempts to figure out how some school could leverage this proposal to ”game” the rule, that the proposal at issue was one in which an institution could request the ability to provide free money to students to lower student debt.  To the Department’s credit, it embraced this idea (John Kolotos called it the “most proactive” idea negotiators put forth related to student debt). It seems, however, everyone should rally around such a pro-student measure, notwithstanding their opposition to each other on other issues.

Some Thoughts on the Latest Round of Gainful Employment Negotiated Rulemaking Part 1

Posted in Department of Education, Gainful Employment, Higher Education News, Higher Education Policy

CONTRIBUTED BY
Dennis Cariello

I will apologize upfront for the length of this post.  Or that there will be multiple posts on this.  There’s just a lot to say after this latest session of gainful employment negotiated rulemaking.

For those of you that have missed the news, the Department of Education requested, and the negotiation committee agreed, to hold one more round of negotiations.  The sessions will last one or two days and happen somewhere between December 9-20.  If the goal is to achieve consensus around the proposal – or at least reach some agreement on some ideas – this is a good move.  I thought the Department made a mistake in not planning on holding three sessions in the first place.  While I understood the rationale – the Department has, after all, already held three sessions on this rule in the past, so everyone knows the issues – I thought not holding the last session failed to respect the normal process: the first session negotiators meet each other and talk philosophy; the second session they discuss actual proposals and coalesce; and the third session they negotiate over actual language.  Although many negotiators had a fairly solid grounding in the issues this time around, the process still remained the same, and wasn’t appreciably advanced by the Department’s release of proposed rule language prior to the first session.  I would, however, be remiss in not acknowledging that the Department’s dramatic revision to that first proposal prior to the second session also likely played a role in the failure to complete in two sessions.  By adding two new metrics, making schools comply with three of four of the proposed metrics, and not having data regarding how the two metrics would affect school programs, it may have been too much to expect negotiators to be in a position to vote on consensus this round.  Nonetheless, the Department deserves kudos for recognizing all of this and proposing to hold another session.

That said, I am curious how this final session will go.  Ostensibly, the purpose was to provide data to the negotiators on the effect of the new metrics.  What is unclear to me is whether the data will make any difference to the Department.  Indeed, the Department seemed to suggest that the main policy proposal (the four metrics) wasn’t going to change.  While we don’t have a transcript of the proceedings (the committee voted not to transcribe the proceedings on the first day of the first session), Ben Miller of the New America Foundation has done a live blogging of the sessions that squares with my recollection of the discussion:

Jones from Strayer says he appreciates the attempt to get data. He asks about the process going forward. He notes that some of the ideas the Department has put forward lies in the impact of the data. He asks if the terms of the rule appear to be set, what is the point of the data if there isn’t openness to using that data to find some critical underlying points. He says if the Department is going to have the data would it be used to revisit core components of the rule. Kolotos says it will give the data and we can discuss the metrics, but it must be done in one day and not have session after session. Jones says he in particular is concerned about the impact of complying with one of three metrics versus having to comply with all three metrics.

. . . .

Kolotos responds to Jones. He says he believes the Department put forward the right policy. The data should inform the policy, but it should not drive it. That seems to suggest that the policy should not be driven by the outcomes estimates but by what makes sense from a policy standpoint. (Italics in original).

I see this as an overreaction – perhaps an understandable one – to the court’s decision dealing with the last gainful employment rule.  As you may recall, the court in that case upheld the debt-to-income measures as the product of reasoned rulemaking but struck down the loan repayment metric.  While the court found that the Department based the debt metrics on “expert studies and industry practice,” which resulted in a “rational connection to the facts found tand the choice made,” the loan repayment metric was said to be based on an outcomes driven analysis:

The debt repayment standard, by contrast, was not based upon any facts at all. No expert study or industry standard suggested that the rate selected by the Department would appropriately measure whether a particular program adequately prepared its students. Instead, the Department simply explained that the chosen rate would identify the worst-performing quarter of programs. Why the bottom quarter? Because failing fewer programs would suggest that the test was not “meaningful” while failing more would make for too large a “subset of programs that could potentially lose eligibility.”  That this explanation could be used to justify any rate at all demonstrates its arbitrariness. If the Department had chosen to disqualify the bottom ten percent of programs, or the bottom half, it would have offered the same rationale: the rate chosen disqualified the percentage of programs that it was intended to disqualify, and to have disqualified fewer would have made the test too lenient while disqualifying more would have made the requirement too stringent. This is not reasoned decisionmaking. “As an expert agency, [the Department’s] job is to make rational and informed decisions on the record before it in order to achieve the principles set by Congress. Merely . . . picking a compromise figure is not rational decisionmaking.” In setting the debt repayment rate, the Department picked a palatable figure. Because the Department has not provided a reasonable explanation of that figure, the court must conclude that it was chosen arbitrarily.  (Decision, at page 31 (citations omitted).

As I read this case, the Department need not ignore what the data shows in coming up with the rule – the court only held that the data can’t be the sole basis for a rule.  Indeed, if a given rule would eliminate all or substantially all of a certain type of program, that should be a good reason to go back to the drawing board.  Now, I may be reading the Department incorrectly here; the folks I know at the Department are reasonable and would want that data so they could see the effect of the rule before they publish the rule.  I just hope the court’s decision hasn’t gotten the Department thinking otherwise.

The Department of Education Announces More Negotiated Rulemaking

Posted in Credit Hour, Department of Education, Financial Aid (Loans & Grants), Higher Education News, Higher Education Policy, State Authorization

CONTRIBUTED BY
Dennis Cariello

It will be a very busy year for the U.S. Department of Education (Department).  Already engaged in a controversial negotiated rulemaking on “gainful employment,” and having announced a rulemaking on the implementation of the Violence Against Women Reauthorization Act of 2013, the Department published a notice in the Federal Register of its Intention To Establish a negotiated rulemaking committee to discuss topics for “Program Integrity and Improvement.”  The committee meetings will be held at the Department’s offices at 1990 K Street NW., Eighth Floor Conference Center, Washington, DC 20006.  The committee will meet from 9am -5 pm on the following days:

  • Session 1: February 19-21, 2014
  • Session 2: March 26-28, 2014
  • Session 3: April 23-25, 2014

The “Program Integrity and Improvement” rulemaking will likely focus on six topics:

  • Cash management of funds provided under the title IV Federal Student Aid programs, including the use of debit cards and the handling of title IV credit balances.
  • State authorization for programs offered through distance education or correspondence education.
  • State authorization for foreign locations of institutions located in a State.
  • Clock to credit hour conversion.
  • The definition of “adverse credit” for borrowers in the Federal Direct PLUS Loan Program.
  • The application of the repeat coursework provisions to graduate and undergraduate programs.

The Department is seeking nominations for this committee.  All nominations should be received by December 20, 2013.  The nominees  should fill one of the following constituencies that “are significantly affected by the topics proposed for negotiations”:

  • Students.
  • Legal assistance organizations that represent students.
  • Consumer advocacy organizations.
  • State higher education executive officers.
  • State attorneys general and other appropriate State officials.
  • Business and industry.
  • Institutions of higher education eligible to receive Federal assistance under title III, Parts A, B, and F, and title V of the HEA, which include Historically Black Colleges and Universities, Hispanic-Serving Institutions, American Indian Tribally Controlled Colleges and Universities, Alaska Native and Native Hawaiian-Serving Institutions, Predominantly Black Institutions, and other institutions with a substantial enrollment of needy students as defined in title III of the HEA.
  • Two-year public institutions of higher education.
  • Four-year public institutions of higher education.
  • Private, non-profit institutions of higher education.
  • Private, for-profit institutions of higher education.
  • Regional accrediting agencies.
  • National accrediting agencies.
  • Specialized accrediting agencies.
  • Financial aid administrators at postsecondary institutions.
  • Business officers and bursars at postsecondary institutions.
  • Admissions officers at postsecondary institutions.
  • Institutional third-party servicers who perform functions related to the title IV Federal Student Aid programs (including collection agencies).
  • State approval agencies.
  • Lenders, community banks, and credit unions.

 

Senate Forms Task Force to Review Higher Ed Regulations and Reporting Requirements

Posted in Higher Education News, Higher Education Policy, News from the Hill

CONTRIBUTED BY
Dennis Cariello

In an statement earlier today, Senate education committee Ranking Member Senator Lamar Alexander (R-Tenn.), and members Barbara Mikulski (D-Md.), Richard Burr (R-N.C.), and Michael Bennet (D-Colo.) “announced the formation of a task force to examine burdens on institutions of higher education.”  The “Task Force on Government Regulation of Higher Education” will review federal regulations and reporting requirements affecting colleges and universities and “make recommendations to reduce and streamline regulations.”

The task force is to be co-chaired by Nicholas Zeppos, chancellor of Vanderbilt University, and William Kirwan, chancellor of the University System of Maryland.  It will comprise 14 college and university presidents and higher education experts. Also, the American Council on Education will provide organizational assistance.

Department of Education Publishes Change to NACIQI Schedule

Posted in Accreditor News, Department of Education, Higher Education News, Higher Education Policy

CONTRIBUTED BY
Dennis Cariello

Earlier today, the Department of Education published a notice in the Federal Register (78 FR 68832) announcing revisions to the agenda for the December 12-13, 2013 meeting of the National Advisory Committee on Institutional Quality and Integrity (NACIQI).  This is a follow up to meeting notices published on August 19, 2013 (78 FR 50401), and October 30, 2013 (78 FR 64929).

This notice removes the petition for initial recognition submitted by the Association of Institutions for Jewish Studies (AIJS) from the agenda.  In addition, the election of a NACIQI Chairperson and a Vice Chairperson will precede the Committee’s review of agencies scheduled for review.

As a reminder, the NACIQI meeting will be held on December 12-13, 2013, from 8 a.m. to 5:30 p.m. at the Liaison Capitol Hill Hotel, 415 New Jersey Ave. NW., Washington, DC 20001.  NACIQI will be considering the following actions:

Petitions for Continued Recognition Accrediting Agencies
1. Council on Accreditation of Nurse Anesthesia Educational Programs (COANAEP)
2. Council on Education for Public Health (CEPH)
3. Northwest Commission on Colleges and Universities (NWCCU) (regional accreditor – covers Alaska,
Idaho, Montana, Nevada, Oregon, Utah, and Washington)
4. Western Association of Schools and Colleges, Accrediting Commission for Community and Junior Colleges (WASC–ACCJC) (regional accredior – covers  associate degree-granting at schools in California,
Hawaii, the United States territories of Guam and American Samoa, the Republic of Palau, the Federated States of Micronesia, the Commonwealth of the Northern Mariana Islands, and the Republic of the Marshall Islands)

State Approval Agency for Nurse Education
1. North Dakota Board of Nursing (NDBN)

Petitions for Recognition Based on a Compliance Report
1. American Podiatric Medical Association (APMA)
2. Association for Clinical Pastoral Education, Inc. (ACPEI)
3. Commission on English Language Program Accreditation (CEA)
4. Council on Chiropractic Education (CCE)
5. Joint Review Committee on Education in Radiologic Technology (JRCERT)
6. Montessori Accreditation Council for Teacher Education (MACTE)

State Approval Agency for Nurse Education
1. New York State Board of Regents, State Education Department, Office of the Professions (Nursing Education) (NYBRN)

State Approval Agencies for Vocational Education
1. New York State Board of Regents, State Education Department, Office of the Professions (Public Postsecondary Vocational Education, Practical Nursing)
2. Oklahoma Board of Career and Technology Education (OBCTE)
3. Pennsylvania State Board of Vocational Education, Bureau of Career and Technical Education (PSVBE/BCTE)

President Obama Announces Intent to Nominate New Assistant Secretary for Postsecodnary Education

Posted in Department of Education, Higher Education News, Uncategorized

CONTRIBUTED BY
Dennis Cariello

As reported by the Chronicle of Higher Education, President Obama plans to nominate Ericka M. Miller as the U.S. Department of Education’s assistant secretary for postsecondary education.  As reported by the Chronicle, “Ms. Miller is now a vice president with the Education Trust. She has previously served as vice president and director of the search firm Isaacson, Miller, and as president and chief operating officer of the McKenzie Group, an education consultancy.”

 

 

Additional Information on the Government Shut Down from Federal Student Aid

Posted in Department of Education, Higher Education News, News from the Hill

CONTRIBUTED BY
Dennis Cariello

In our report on the budget showdown, I neglected to link to the letter from James Runcie, the COO of the Department of Education’s Office of Federal Student Aid (FSA) about the budget shutdown.  In short, much as we reported yesterday, FSA’s operations will largely continue for student and schools.  As there will be few administrative staff in DC or the regional offices, FSA officials won’t be holding an webinars or attending speaking engagements during the shut down.  Happily, as an attachment to the letter shows, most of FSA’s customer service contact centers will remain open.  The new Reach FSA voice-activated phone number (1-855-FSA-4-FAA or 1-855-372-4322) will also remain operational.

What the Budget Showdown Means for Higher Education

Posted in Department of Education, Financial Aid (Loans & Grants), Higher Education News, Higher Education Policy, News from the Hill

CONTRIBUTED BY
Dennis Cariello

Well, it’s September 30th and that means is the end of the Federal Government’s fiscal year.  Before anyone bites into the cake, however, Congress still needs to pass a new budget (or continuing resolution.  Otherwise, the government will shut down.  Happily, the Department of Education (Department) updated the playbook for when the government shuts down.

As an aside, as we are also heading to a standoff over raising the debt ceiling, I humbly suggest the Department (assuming it has staff to do) offer information on what would happen if Congress does not raise the debt ceiling (in case you are interested, the Congressional Research Service put out a number of helpful reports we highlighted earlier this year).  The lack of information when this happened two years ago caused confusion and worry among students, parents and schools over what would happen to loans and grants, among other things.

As for the shut down, the Department’s memo explains there will not be very many folks working at the Department during a shutdown:

the Department would furlough over 90 percent of its total staff level [the Department has 4,225 full and part-time employees] for the first week of such a lapse.  During this first week, we would maintain only those excepted functions related to the discharge of the duties of Presidentially-appointed, Senate-confirmed individuals; those employees charged with the protection of life and property; and, as appropriate,  the obligation, payment, and support of student financial aid as well as other authorized payments and obligations.

For a longer shutdown, “at most, a total of not more than 6 percent of the total staff would be called back” to perform “excepted activities to prevent significant damage to the underlying activity.”  In short, 212 employees will be working during the first week and, if the lapse lasts more than 1 week, 242 employees will work at some point during the shutdown [approximately 3,983 employees would be furloughed].

In higher education, loans and Pell grants will continue as normal.   Further, staff and contractors associated with these programs will continue to work, although “only skeletal program operations would continue under the ‘significant damage’ standard.”  While it’s not clear what level of loan servicing is provided for with skeletal program operations, the memo notes “student financial aid services should continue  in order to avoid the potential loss of federal assets and to maintain the delivery of student aid.”

Campus-Based aid programs, however, will not be so lucky.  Indeed, “FSA employees working in areas not directly related to Pell Grants or Direct Student Loans, such as the Campus-Based Programs of College Work-Study and Supplemental Educational Opportunity Grants, customer service activities, administrative functions not related to providing student aid to schools and students, and development of new programs or activities, would not be excepted.”  Thus, if you are awaiting funds from the government out of these programs, you will be out of luck.

In addition, as a general matter, grants awarded by the Department previously (not student aid) should continue as normal for the first week.  “For a lapse of more than a week, Department staff would be needed as excepted employees to monitor the contractors and resolve any issues.”  In addition, grants awarded by the National Institutes of Health and the National Science Foundation will also be affected.  Under contingency plans authored by the Department of Health and Human Services and the National Science Foundation, grantees working on existing grants could continue their work to the extent funds are available and grantees do not require assistance from agency staff.  Neither agency will take any actions on new grant applications or awards.

New CRS Report: Banning the Use of Racial Preferences in Higher Education

Posted in Civil Rights & the Constitution, Higher Education News, Higher Education Policy

CONTRIBUTED BY
Dennis Cariello

An interesting new report from the Congressional Research Service reviews
Schuette v. Coalition to Defend Affirmative Action, a case heading to the Supreme Court this upcoming 2013-2014 Term that will consider “whether it is constitutional for a state to ban such preferences in higher education.” As the report notes, this question is “unique” because typically cases have focused on whether institutions were allowed to use racial preferences in admissions decision.

For those that are unaware, Schuette involves “Proposal 2″, a Michigan state constitutional provision designed to prohibit preferential treatment on the basis of race, sex, color, ethnicity, or national origin in public employment, public education, or public contracting.  A federal appeals court ruled that Proposal 2’s ban on racial preferences in public education violates the equal protection clause of the United States Constitution. This decision was subsequently upheld in a divided ruling by the full court of appeals, sitting en banc, and the Supreme Court will review the case during the upcoming term.

Compliance Focus: New FSA Handbook Prohibits Discounts to Students Who Pay in Cash or Who Pay Before the Start of Class

Posted in Department of Education, Financial Aid (Loans & Grants), Higher Education News, Higher Education Policy

CONTRIBUTED BY
Dennis Cariello

As many of you know, the new Federal Student Aid Handbook were released this summer.  There are a number of new items in the handbook and I encourage you all to review it.  We will be discussing these new items in future posts (so make sure you do the reading, or else you won’t be able to participate!)

One new note that comes a bit out of the blue this year relates to tuition discounts: many of them are prohibited:

Charging variable tuition
Schools may not charge students who receive federal student aid a different tuition from those who don’t receive federal student aid for the same program. Moreover, giving a discount to students who pay in cash or who pay their tuition in full before the start of class is not allowed. This, of course, does not prevent schools from having different costs for other categories of students, such as having a different tuition for in-state and out-of-state students.

Volume Three of the Handbook, at 3-36.  Now, this comes from section 472(1) of the Higher Education Act which talks about “tuition and fees normally assessed a student carrying the same academic workload…”  Internally, the Department of Education has interpreted this to mean that all students–aided as well as unaided student–in the same program are charged the same tuition.  This is to prohibit schools from charging different tuition based on whether a student receives Title IV funding (and presumably charge those students more).  However, given the explicit language, schools should strongly consider ending discount programs covered by this note even if all students are eligible for the discount. Continue Reading

Negotiated Rulemaking Conference Call Today

Posted in Department of Education, Gainful Employment, Higher Education News, Higher Education Policy

CONTRIBUTED BY
Dennis Cariello

The Department of Education (Department) announced that the gainful employment negotiated rulemaking committee is holding a conference call today, Wednesday, September 25, 2013, from 1:00 p.m. to 3:00 p.m. Eastern Time to continue discussion on the topic of new gainful employment programs. This call will be open to the public for listening, and subject to a maximum of 200 callers. The Department asks that groups “dial in from one line to accommodate participation by as many members of the public as possible.”  Below is the conference line information:

Conference line: 877-610-1533
Participant code: 8001017

Based on the materials provided in the notice of the call, the call will be on the Department’s consideration and approval of new programs.  To that end, the Department asks:

  • Which new programs should be subject to the approval process?
  • What information should an institution seeking to establish a new program be required to submit to the Department?
  • What criteria should the Department use to ensure that its review of new program applications is meaningful and at the same time can be performed consistently?

 

Education and Workforce Subcommittee to Hold Hearing on Vocational Education

Posted in Higher Education News, K-12 News, News from the Hill, Skills Gap

CONTRIBUTED BY
Dennis Cariello

On Friday, September 20th at 10:00 a.m. in room 2175 of the Rayburn House Office building, the Subcommittee on Early Childhood, Elementary, and Secondary Education will hold a hearing entitled, “Preparing Today’s Students for Tomorrow’s Jobs: A Discussion on Career and Technical Education and Training Programs.” The hearing will explore ways the federal government can help support state and local initiatives to improve career and technical education.  The hearing will be webcast live.  The witnesses for the hearing are:

  • Alvin Bargas, President, Pelican Chapter Associated Builders & Contractors, Inc., Baton Rouge, LA
  • Dr. Sheila Harrity, Principal, Worcester Technical High School, Worcester, MA
  • John Fischer, Dep. Commissioner, Transformation & Innovation, VT Agency of Education, Montpelier, VT
  • Frank Britt, Chief Executive Officer, Penn Foster Inc., Scranton, PA