This Week In Washington
On Thursday, the U.S. Department of Justice filed a Statement of Interest (similar to an amicus curiae brief) in the case of Students For Fair Admissions, Inc. v. President And Fellows Of Harvard College. The Justice Department argues that “Harvard has failed to show that it does not unlawfully discriminate against Asian Americans,” and that Harvard failed to show “how it limits its use of race to ensure that no illegal discrimination occurs.” The plaintiffs in the case allege Harvard racially discriminated against Asian-Americans in its admissions selection process by using a “personal rating” score. Harvard has denied any racial discrimination and has affirmatively argued that using race is not only permissible, but also an important tool to increase diversity on all college campuses.
On Monday, the Government Accountability Office (GAO) publicly released a report completed earlier this year entitled: “Federal Student Loans: Further Actions Needed to Implement Recommendations on Oversight of Loan Servicers.” The report is an update to Congress examining whether the U.S. Department of Education (ED) has made progress on GAO’s recommendations to improve federal student loan servicing. GAO found that ED had “implemented a more rigorous selection methodology for reviewing recorded calls” and “implemented a new call monitoring plan, which include[d] enhancements to help assess and improve the performance of loan servicers.” However, GAO said ED had not implemented four other recommendations it made, but that ED had committed to act in the future. The report did not speak to whether these newly implemented plans had actually improved ED’s oversight of student loan servicers or whether any action ED took produced measurable improvements in borrowers’ experience with their servicers.
The top federal student loan watchdog at the Consumer Financial Protection Bureau (CFPB) resigned in protest on Monday. In his resignation letter, Seth Frotman, the CFPB’s Student Loan Ombudsman, argued that the CFPB’s new leadership is working against the intent of Congress for the CFPB to protect students and families. Frotman said that “consumers no longer have a strong, independent Consumer Bureau on their side,” and that the “Bureau’s leadership are hurting families.” Specifically, Frotman argues the recent actions taken at the CFPB have been “undermining enforcement of the law,” “undermining the Bureau’s independence,” and “shielding bad actors from scrutiny.” Frotman had served at the CFPB since its inception seven years ago. It is unclear who, if anyone, will replace him in his role.
Yesterday, 45 Senate Democrats submitted formal comments to ED regarding the proposed borrower defense to repayment regulations, which would govern when and how schools would be held accountable for defrauding students. The comments detailed their concern about a number of issues and requested that ED withdraw the proposal. The Senators believe that the proposed rule, if implemented “will increase defaults, reduce educational quality, create inequities for borrowers, limit institutional accountability, exacerbate predatory behavior, and undermine student and taxpayer protections.” The American Council on Education, which represents nearly 1,800 public and private two-year and four-year institutions, also submitted comments in which they state that the proposed rule “would make asserting a successful claim functionally impossible” for borrowers. The comment period is now closed; in order for the final rule to go into effect by July 1, 2019, it must be published by November 1, 2018.
News You Can Use
A recent New America report, “Living on Credit? An Overview of Student Borrowing for Non-Tuition Expenses,” found, among other things, that the amount students are borrowing for non-tuition costs has remained fairly steady for decades, and “students who come from low-income families are more likely to borrow in excess of tuition.”
An in-depth profile of some student loan borrowers seeking forgiveness under the PSLF program outlines several problems with the administration of the forgiveness program.
New analysis of federal student aid data shows a spike in defaults after the cohort default rate tracking period ends, revealing that the student loan default problem is much worse than previously thought.
The following bill(s) have been recently introduced for consideration by the 115th Congress (2017-2018):
S. 3371 – Protecting Students from Worthless Degrees Act [Sen. Jeff Merkley (D-OR) / Sen. Dick Durbin (D-IL)] would mandate that all institutional programs meet any federal or state licensure and programmatic accreditation requirements that is necessary for graduates to enter their intended field of study, and would reinstate Gainful Employment certification requirements, which were recently proposed for elimination.