This Week In Washington
At a Center for American Progress event on Thursday, Senator Patty Murray (D-WA), the ranking member on the Senate education committee, spoke about her principles for reauthorizing the Higher Education Act (HEA). Her broad priorities for reauthorization are to improve affordability, hold schools accountable, expand access, and increase campus safety. Senator Murray’s remarks come on the heels of the Senate education committee’s chairman, Senator Lamar Alexander (R-TN)’s, opening salvo a few weeks ago outlining his three priorities for HEA reauthorization. Discussions about a path forward will continue in the coming months, and we will keep you abreast of any new developments.
Last week, the U.S. District Court for the District of Columbia issued its ruling in American Bar Association et al. v. United States Department of Education which found that the U.S. Department of Education (ED) had wrongly rejected some Public Service Loan Forgiveness (PSLF) applicants’ employment certification forms after initially telling the borrowers that their employment qualified for PSLF. Recall, ED had argued that borrowers could not rely on determinations by their loan servicers about PSLF eligibility because ED was the final arbiter. However, the judge agreed with the plaintiffs, saying that ED “acted arbitrarily and capriciously when the [ED] changed its interpretation of the PSLF regulation in two ways without displaying awareness of its changed position, providing a reasoned explanation for that decision, and taking into account the serious reliance interests affected.” The judge ordered ED to reconsider its denial letters sent to three of the four plaintiffs.
The judge also ruled that ED’s decision to implement a new requirement that non-501(c)(3) not-for-profit organizations have public service as its "primary purpose" violated the Administrative Procedure Act (APA). Judge Kelly reasoned that “[ED’s] adoption of the Primary Purpose standard constituted a change to how it interpreted and applied the PSLF regulation. . . [and] that change, at the least, required it to meet the minimum requirements for reasoned decisionmaking [sic] under the APA.” Thus, ED can no longer use that standard with those organizations until it complies with the APA.
Also last week, ED’s Office of Federal Student Aid awarded a five-year contract to Accenture Federal Services to oversee and manage ED’s new web portal that will handle federal student loans. Recall, this is part of ED’s Next Generation Financial Services Environment (Next-Gen) federal aid overhaul announced in late 2017. Under this new portal, borrowers will only have to access one website that will handle all facets of their student loans, unlike the current system which requires borrowers to visit individual servicers’ websites for each of their loans. Neither ED nor Accenture have said when this new portal will be implemented or available to borrowers.
News You Can Use
The Consumer Bankers Association, which represents private lenders, is calling on the Consumer Financial Protection Bureau and ED to provide an “improved federal student loan disclosure process” to give students a “clear view of the true cost of [federal loans].”
The New York Times profiled a borrower who received forgiveness under PSLF and had his credit score negatively impacted because of inaccurate credit reporting by his student loan servicer.
Rachel Fishman, Deputy Director of Research at New America, recounted her experience with servicing issues related to qualifying employment for PSLF, showing that even people who are steeped in policy knowledge are having difficulty with the program’s implementation.
Because some of your students likely plan to participate in PSLF, this is an excellent time to reach out to your Members of Congress so that when a potential reauthorization of the HEA comes around, they will understand your students’ and alumni’s needs and concerns.
AccessLex can help you #MakeTheCase for strong policies that benefit your schools and their students. Contact Your Representatives quickly and easily through our newest advocacy tool and check out our Advocacy Toolkit that contains information on critical policy issues and useful tips for effective advocacy.
No relevant student aid focused bills have been introduced for consideration by the 116th Congress (2019-2020) this week.