News: Federal Policy & Advocacy

NCAN Submits 3 Rounds of Comments on Proposed Rule Changes That Could Harm Students

Thursday, September 20, 2018  
Posted by: Carrie Warick, Director of Policy and Advocacy
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While Congress struggles to pass comprehensive education legislation, the U.S. Department of Education continues to move forward with its campaign to change regulations affecting higher education. Over the latter half of the summer, the department asked for public comment about proposed changes to the rules governing borrower defense to repayment and the gainful employment regulations. The department also asked for initial public comment regarding accreditation of higher education institutions and related financial aid eligibility.

NCAN submitted comments on all three topics, outlined below.

Borrower Defense to Repayment

At the end of August, NCAN submitted comments opposing the U.S. Department of Education’s proposed changes to a type of loan forgiveness called borrower defense to repayment, a key consumer protection for student loan recipients.

The proposed rule change would make it much more difficult for students to apply to have their loans discharged if an institution of higher education misled them.

In particular, NCAN’s comments focused on the proposed changes that would a) require students to apply for loan discharge individually, rather than as part of a group, and b) require students to be in default before they could submit an application for loan forgiveness. Both of these changes would make it far harder for students, particularly less-resourced low-income students, to apply for loan discharge. Requiring students to default on their loan before seeking help is particularly egregious because defaulting will harm students’ credit history. This could affect their ability to get a job or housing, cause wage garnishment, and/or cause a loss of security clearance, which is particularly harmful to veterans seeking jobs. 

Approximately 34,000 comments were submitted about this proposed rule change.

Gainful Employment

The gainful employment rule applies to institutions that provide sub-associate level certificates and for-profit institutions. During the Obama administration, after several rounds of a negotiated rule-making committee being unable to make an agreement, the department set a formula to measure whether students were gainfully employed by comparing their student debt and their earnings. Programs that did not meet the minimum standard were no longer eligible to receive federal financial aid.

Under the proposed change, there would be no measure or related consequence for leaving students with a large amount of debt relative to their earnings. Instead, the department would provide program-level earnings data for every program on the College Scorecard, a government database website.

NCAN strongly urged the department to keep the current rule as is. 

Approximately 14,000 comments were submitted about this proposed rule change.

Accreditation and Financial Aid Eligibility

NCAN’s comments for this call focused on two specific areas: requesting that FAFSA verification be added to the docket for discussion and responding to proposed changes that could make it more difficult for our students to pursue a high-quality education.

On the FAFSA verification front, NCAN thanks the many members, including staff from AchieveMpls, Advancing Academics, Alabama Possible, American Student Assistance, Bottom Line, College Bound St. Louis, College Now Greater Cleveland, College Possible (multiple locations), De La Salle Inc, Pathways to the Baccalaureate at NVCC, and uAspire, that assisted us in our efforts to put a spotlight on the barrier of FAFSA verification. NCAN requested that this topic be added to the upcoming committee agenda to discuss accreditation and financial aid eligibility.

Only 631 comments were received on this topic, meaning NCAN members’ verification comments will have impact and weight.

The second part of this round of comments focused on several proposed changes to the accreditation process that could be harmful to students. They include proposals that could:

  • Weaken standards for accreditors, opening the door for more bad actors to receive precious federal financial aid dollars.
  • Change state authorization rules that provide an assurance to online students that completion of their chosen postsecondary program will provide them the necessary credentials to sit for licensure exams in a state other than the one in which the institution is physically located.
  • Decrease the amount of “regular and substantive interaction” requited between students and live subject-matter experts.
  • Rewrite the credit hour rule to permit institutions to change the credits assigned per course, which allows them to receive more federal money for less time spent on education.
  • Expand the ability of institutions to outsource their educational programs to third-party entities that are not required to participate in the accreditation process. 

NCAN requested that these changes be reconsidered.

What is a rule, anyway?

A rule, or regulation, outlines how the U.S. Department of Education will administer or regulate certain programs, such as the TRIO programs, or initiatives, such as borrower defense to repayment loan forgiveness. Congress may pass laws directing the Department of Education (and other federal agencies and departments) to issue rules.

Rules may be determined through what’s called a negotiated rule-making process, in which a committee of representative stakeholders is brought together to discuss what a given rule should be. If the committee reaches consensus on all topics on its agenda, the recommendations are binding, and the rule is set. If the committee can’t reach consensus, the department is able to write the rule itself.