Obama Administration Steps Up Protections for Borrowers

In recent weeks the U.S. Department of Education has taken a number of steps to increase protections for student borrowers.

Earlier this month the Department announced new rules to simplify and strengthen existing student loan forgiveness regulations for student defrauded or deceived by a higher education institution.

In addition, the Department submitted recommendations to the National Advisory Committee on Institutional Quality and Integrity (NACIQI) regarding higher education accrediting agencies that are to be reviewed as part of the regular review process. Among the recommendations made by Department staff was the recommendations that the Accrediting Council for Independent Colleges and Schools, or ACICS, should no longer be recognized as an accreditor, and, at its recent spring meeting, NACIQI voted 10-3 in support of the recommendation not to re-recognize ACICS.  That recommendation now comes to the Department for a decision.

Finally the Department’s Office of Federal Student Aid (FSA) provided new performance data collection of key performance data on the federal student aid portfolio.  Among the key findings in the report: enrollment in plans such as Income-Based Repayment (IBR), Pay as You Earn (PAYE), and Revised Pay as You Earn (REPAYE) is increasing; hardship deferments, delinquencies, and new defaults are decreasing while income-driven repayment (IDR) enrollment has increased; and the delinquency rate has experienced year-over-year decreases.

In the coming weeks, FSA will release information about its institution oversight responsibilities, including data on institutions that paid fines over the past five fiscal years for violating laws and regulations and historical data about institutions required to submit a letter of credit to continue in federal student aid programs.

Second Chance Pell Grant Pilot Program

Last week, the U.S. Department of Education announced 67 colleges and universities selected for the Second Chance Pell Grant pilot program.

The program will allow eligible incarcerated students in federal and state penal institutions to receive federal Pell Grants and pursue postsecondary education and training with the goal of helping them get jobs and support their families when they are released.

Selected institutions will partner with over 100 federal and state penal institutions to enroll approximately 12,000 incarcerated students — likely to be released in five years — in education and training programs.

The vast majority of selected institutions are public two- and four-year institutions that will offer classroom-based instruction on-site at corrections facilities.  Others will offer online education or a hybrid of classroom/online instruction.  More than 10% are Minority-Serving Institutions (MSIs), and about 30% percent will offer prison-based education for the first time.

Increase in U.S. Educational Attainment

New data from the Lumina Foundation’s “A Stronger Nation 2016” report indicate that the percentage of working age Americans (ages 25-64) who hold high-quality credentials beyond high school reached 45.3% nationally in 2014. That is an increase of 5.3% from 2013. Nearly all of the increase resulted from the inclusion, for the first time, of certificates – often awarded by community and technical colleges – in the base calculation. According to Lumina, nearly 5% of Americans hold high-quality postsecondary certificates. Despite the sharp increase, these rates remain short of Lumina’s “Goal 2025” that 60% of Americans obtain a high-quality postsecondary degree or credential by 2025.

The report also lists Washington as ranking among the top five states in attainment of a postsecondary credential (51.6%) – up from 42% in 2008. The inclusion of certificates added 7% to Washington’s overall attainment rate. Washington ranks behind only Massachusetts, Colorado, Connecticut, and Minnesota.

Senate Fiscal Committee Approves Funding for Education

Last week, the U. S. Senate Appropriations Committee approved a bill that would reinstate year-round Pell Grants for low-income students and provide a $2 billion increase for the National Institutes of Health (NIH).

The 2017 appropriations bill for the U. S. Departments of Education, Labor and Health and Human Services is a mix of investments and reductions:

  • The Pell Grant maximum grant award is increased from $5,815 to $5,935.
  • Reinstates year-round Pell Grants.
  • The U.S. Department of Education budget was reduced by $220 million from the prior year.
  • Funding was maintained at the same level for TRIO, GEAR Up, Federal Work-Study programs, Adult Education State Grants and Technical Education State Grants.
  • The U.S. Department of Labor’s Workforce Innovation and Opportunity Act grant was reduced by $73,000.
  • Transfers $1.2 billion from the Pell Grant program to support other programs including increases in NIH funding, and Title I.
  • NIH funding is increased for research efforts related to cancer, Alzheimer’s and fighting the growing opioid abuse epidemic.

New Effort from Obama Administration Assists Those In the Criminal System

Late last week, the White House announced a “Fair Chance” higher education pledge, in which organizations, including companies and institutions of higher education make a pledge to help those who have been accused or convicted of crimes get a second chance at improving their lives and building their education and careers.

Institutions of higher education, in particular, will qualify for the Pledge by improving admissions processes, such as limiting questions or the use of information regarding an student’s criminal past and supporting the work of students and faculty members who teach in corrections institutions or help those in such institutions plan to continue their educations after their sentences.

To date over 100 organizations have made the Pledge ranging from Coca-Cola to Catholic Charities USA to Dave’s Killer Bread to Johns Hopkins Medical Center.