From Your Lobbyist: POTUS FY20 Budget, Cheating Scandal, Bill to Protect Student Borrowers
March 29, 2019
Week of March 25-29
DeVos Defends FY20 Budget at Hearings
The focal point of this week’s education news was Secretary of Education Betsy DeVos who made two trips to Capitol Hill to defend the President’s FY20 education budget. On Tuesday, Secretary DeVos testified before the House Labor HHS Education Appropriations Subcommittee and the reception from Democrats on the panel could be fairly characterized as hostile. Starting with Chair Rosa DeLauro (D-CT), who termed the President’s 10-12% education cuts as “cruel and reckless,” and continuing with full Appropriations Committee Chair Nita Lowey (D-NY), who divined President Trump’s overall message with this budget as “fund the wall with money from our children’s schools,” DeVos endured a rough two hours before the panel. In her testimony and in responses to the panel’s questions, DeVos gamely defended the budget cuts, including the elimination of all funding for the Special Olympics, as guided by the principle of “expanding educational freedom while demonstrating fiscal discipline.” Republicans on the panel applauded the budget’s focus on workforce investments, particularly in the context of aligning higher education more closely with the needs of business. In this context, last week’s Presidential Executive Order, which mandated that the Department’s College Scorecard include program-level data so that prospective students could learn how former students fared in terms of loan defaults and repayments based on their courses of study, received an implicit nod. Rep. Tom Graves (R-GA), who has two college-age daughters, used his time to acknowledge the importance of providing program level data about the return on investment for getting certain degrees. The Secretary also touted the Department’s efforts to modernize FAFSA, include programmatic data about whether a degree is worth the loan it costs, and various options for income driven repayment plans, which she cited as their “NextGen” approach to improving higher education. But not everyone cheered the Secretary on higher education issues; she faced tough questions regarding her controversial rescissions and rewrites of regulations governing sexual assault, borrower defense to repayment of student loans, and gainful employment. When it was over, Chair DeLauro and Ranking Member Tom Cole (R-OK) agreed that the proposed budget cuts would not become law.
Thursday found the Secretary sitting before the Senate Appropriations Subcommittee Committee, a slightly friendlier venue in that Senator Roy Blunt (R-MO) chairs that panel and a majority of panel members are Republicans. Senator Durbin (D-IL) went after her for the elimination of funding for the Special Olympics. In a bitter back and forth, the Secretary said to Durbin that “using disabled children to further a political narrative is shameful and disgusting.” [Note: Late on Thursday, President Trump announced that Special Olympics funding would be restored.] On higher education, Ranking Member Murray (D-WA) articulated her clear disdain for the proposed cuts to loan programs and PSLF that “literally take billions out of the pockets of student borrowers” while they are struggling amidst a crushing student debt crisis. She told DeVos that it is simply “unacceptable and unconstitutional” to willfully ignore Congress’ requests for answers on subjects like addressing campus sexual assault, student loan servicing, borrower protections, and a whole host of other inquiries as part of its oversight duties and demanded the Department to promptly answer the outstanding inquiries. Senator Blunt closed the hearing by letting the Committee know that while there are some good proposals in the Secretary’s budget, it can be expected that the levels in the education bill will probably look very similar to those in years’ past, which were enacted on a bipartisan basis.
Department of Ed Launches Investigation to Address Cheating Scandal
Another major education news story, the higher education cheating scandal that features allegations against celebrities Felicity Huffman and Lori Loughlin, became a Department of Education legal matter this week. The Department of Education launched an investigation of the schools involved to determine whether federal laws related to federal student aid programs had been transgressed. Reportedly, the letter to the Presidents of Yale, Stanford, the University of Southern California and other universities stated that the case raises “questions about whether your institution is fully meeting its obligations” under federal education laws. The potential ramifications of these letters are quite serious as schools found to have mismanaged federal student aid could be removed from federal programs. Also this week, Yale rescinded the admission of one student whose parents participated in the alleged scheme.
AYA Supports Bill to Protect Student Borrowers
Senators Hassan and Durbin recently introduced the PROTECT Students Act, which if passed into law would protect students and taxpayers from predatory higher education practices. The key provisions of the will would codify and strengthen the borrower defense and gainful employment rules, improve the 90/10 rule and incentive compensation protections, and add new safeguards against the fraudulent for-profit/nonprofit conversions. Additionally, the bill includes provisions that would: “Ensure that individual students, groups of students and state attorneys general can bring suit to enforce certain violations of the HEA. Ensure coordination of for-profit college oversight and enforcement activities between federal agencies, prohibit schools receiving student aid funds from using mandatory pre-dispute arbitration clauses and class action bans, and authorize both an Enforcement Unit and a complaint tracking system at the Department of Education.”
Recently, AYA signed onto a letter, along with dozens of other organizations, thanking the Senators for introducing a bill that “addresses some of the most pressing problems with college affordability by creating well-designed, complementary accountability policies that would hold colleges accountable for illegal activity, reduce the number of students in default and require career programs that routinely leave students with excessive debts, relative to their likely earnings, to improve or lose federal subsidies.”