Higher Ed Policy Roundup: Vol. 4 - Issue 23

On Tuesday, chairman of the Senate Committee on Health, Education, Labor, and Pensions (HELP), Lamar Alexander (R-TN), told CNBC’s Squawk Box that he would be open to providing colleges and universities with more money in order to have them re-open in the fall. This statement comes as the Senate prepares to begin negotiations on the next COVID-19 stimulus package. 

Late last week, National Public Radio published an article claiming that the U.S. Department of Education (ED) is making it more difficult for colleges and universities to provide aid to students during the COVID-19 pandemic. The article points to ED’s shelving of Obama-era professional judgment guidance, which allowed college administrators to reconsider financial aid packages without the fear of triggering an investigation. Without the protection provided by the guidance, the article claims that colleges and universities will be unwilling to revisit aid packages even with the growing evidence of need. 

On Monday, Democratic lawmakers sent a letter to ED’s Acting Inspector General asking for an investigation into possible violations of the Privacy Act of 1974. In the letter, the lawmakers claim that they are concerned that information from the Social Security Administration was illegally used to create the new borrower defense formula. The borrower defense rule establishes new standards and processes under which borrowers can have federal student loans discharged in cases of fraud or deception by an institution. Recall that a group of bipartisan lawmakers recently enrolled a Congressional Review Act (CRA) resolution of disapproval intended to block the rule, which the President subsequently vetoed. The House will vote today to attempt to override the veto.

A new whistleblower complaint filed by an Office of Federal Student Aid (FSA) employee alleges that ED planned to overhaul its website for students seeking to apply for borrower defense, but scrapped the proposal put forth by FSA because it provided borrowers with too much information. An ED spokesperson denies that the department did anything to thwart the development of a new borrower defense online application form. The new website is scheduled to be unveiled later this year,

Public service workers reach a class action settlement with one of the nation's largest student loan servicers over implementation of the Public Service Loan Forgiveness program.

Billionaire launches new lower cost loan to help ease the burden of private student loans for STEM majors at HBCUs.

The following bill(s) have been recently introduced for consideration by the 116^th Congress (2019-2020):

H.R. 7294 – COVID–19 Perkins Loan Relief Act [Rep. Katie Porter (D-CA-45)] would allow student borrowers with Perkins Loans to defer payments until October 2020, adding more parity to federal relief for student borrowers amid the coronavirus outbreak.

S. 4002 – Servicemember Student Loan Affordability Act [Sen. Dick Durbin (D-IL)] would allow servicemembers to consolidate or refinance the private or federal student loans they took out before entering the military, while retaining the six percent rate cap afforded through the Servicemembers Civil Relief Act.