A lot has been happening up on the Hill that affects higher education. In his latest podcast episode, Dr. Drumm McNaughton catches up on the latest news with Tom Netting, president of TEN Government Strategies, who advocates before Congress, federal agencies, and state governments on behalf of private institutions of higher education and post-secondary education companies.

 

Tom discusses the parts of the infamous debt ceiling bill that are important to the higher ed community, the two-year cap on discretionary spending that will impact the Department of Education, the House and Senate voting in favor of disapproving the Biden administration's proposal for student debt cancellation, income-driven repayment changes being proposed at the regulatory level, and the return to the repayment, the Department’s reaction to the Biden administration’s Notice of Proposed Rulemaking, the Second Forum on NC-SARA, when the upcoming Neg Reg will likely take place, Title IX and short-term Pell eligibility updates, and the Department’s strong look at the definition of a third-party servicer.

 

Highlights

 

• The McCarthy-Biden compromise codifies student loan repayments resuming since Congress and the president have recognized that the pandemic is over. The bill proposes that 60 days after June 30, the student loan repayment process begins anew, including the requirement for interest to start accruing, for collection agencies to connect, and for servicers to reconnect with the borrowers. The Department is once again beginning to discuss with servicers how to implement contact with borrowers to reeducate and refresh their memory of these responsibilities. The transition won't start right on September 1. There'll be some lag time for borrowers to get back into the transition.

 

• The two-year cap on overall discretionary spending in the broader context of the McCarthy-Biden compromise will affect higher ed policy and likely complicate the ability to expand Pell Grants. Other spending programs will probably have to be reduced to expand Pell Grants. The two-year cap will worsen the Department of Education’s situation since it did not receive the money it requested in the fiscal year 2023 appropriations process for more staff.

 

• Over the last three to four weeks in May and into the first week of June, the House and the Senate voted in favor of disapproving the Biden administration's proposal in the actual joint resolution for student debt cancellation, income-driven repayment changes being proposed at the regulatory level and the return to the repayment. The Biden administration will undoubtedly veto the disapproval, and there won't be enough votes to override the veto. So the Biden administration will continue to pursue these endeavors. But the Supreme Court will also weigh in on this process and the two pieces of litigation it heard on February 28, sometime in June. The Supreme Court will decide on race equality and admissions this month. The Court will likely reject it.

 

• The Biden administration released a Notice of Proposed Rulemaking that addresses gainful employment, administrative capability, financial responsibility, certification procedures, and the ability to benefit.

 

• For gainful employment, the Department came up with a new metric, which they're calling an Earnings Premium Test or Earnings Premium Metric. This attempts to assess the earnings potential of individuals shortly after they graduate from programs below the associate's degree level and up to associate’s, baccalaureate, and master’s degree offerings to determine whether the earnings potential is comparable to or literally more than the average of individuals aged 24 to 35. Schools will have their eligibility for their programs based on this metric and the prior borrower defense to repayment metrics. From the school's perspective, the ability for a cohort going all the way to individuals age 34 versus an individual two to three years after graduation doesn't seem to be a direct corollary.

 

• The earnings potential and debt-to-earnings assessments will now be part of the Financial Value Transparency List. All programs at all institutions will start seeing publicly provided information on how their programs fare under both metrics. It will only impact the eligibility of those subject to the short-term program cap, meaning less than an associate's degree or state colleges, universities, and others, but all proprietary programs. The Department acknowledges it has four years of earnings and debt data for all institutions and their programs. The Department, this administration, and prior administrations have said that the way in which the definitions of an institution of higher education are structured in the law doesn’t suggest that that's the intent of Congress.

 

• NC-SARA is doing a policy revision of its entire set of standards, including distance education and enrollment criteria. In early January and into the first couple of months of this year, communities provided about 60 recommendations. NC-SARA is currently in forum two and phase two, where groups can respond to the 60 or so proposals. The deadline for that recently passed. NC-SARA’s goal is to have its policy revisions completed by the end of this year to go into effect next year.

 

• The Department recently questioned NC-SARA about its misrepresentation and aggressive recruiting, advertising, and marketing changes to the regulations that go into effect July 1 of this year to see if significant revisions need to be done or to have it dismantled.

 

• The Title IX discussions on the concerns about athletes’ eligibility and participation in sports have been delayed. What also hangs in the balance is the broader, comprehensive retooling and recasting of the regulations around Title IX, including all the VAWA regulations and all the issues related to sexual discrimination, such as the institutions’ responsibilities, the support services for and regulations protecting the rights and the concerns of the accuser and the accused.

 

• On June 9, new safeguard rules and regulatory changes under the Federal Trade Commission and the protection of personally identifiable information, cybersecurity, and the like will be enacted. They will require more substantive assessment routinely on an annual basis in relation to the Gramm-Leach-Bliley Act, the development of plans, and the development of more than just an individual responsible for this. It will be integrated into the very culture and core of all institutions that have any relation to federal dollars, including all institutions of higher education. This is a stepping stone to get to NIST 800-171.

 

• Higher ed needs to consider one bill on short-term Pell eligibility and the opportunity for individuals in blue-collar work to potentially have access to Pell Grants to meet the demand for skilled workers in fulfillment of the infrastructure bill.

 

• The Department is taking a strong look at the definition of a third-party servicer and proposed a Dear Colleague letter with changes to those regulations earlier in the year and then walked back to different timelines for implementation. The Department has some concerns with OEMs. How the Department attempted to define the third-party servicer may have included too many entities.

 

Read the transcript →

 

About Our Podcast Guest

Tom Netting

Having spent all of his professional career devoted to higher education policy oversight and implementation, Tom Netting has an extensive knowledge of the laws and regulations governing all aspects of higher education. His considerable background and experience have afforded him the opportunity to view the development and implementation of federal higher education and workforce development policy in their entirety – including issues related to higher education and workforce development, health care, veteran affairs policies, and the procurement of federal appropriations.

 

About the Host

 

Dr. Drumm McNaughton, the host of Changing Higher Ed®, is a consultant to higher ed institutions in the areas of governance, accreditation, strategy and change, and mergers. To learn more about his services and other thought leadership pieces, visit his firm’s website, https://changinghighered.com/.

 

The Change Leader’s Social Media Links

 

• LinkedIn: https://www.linkedin.com/in/drdrumm/
• Twitter: @thechangeldr
• Email: [email protected]

 

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