A Bipartisan Group of Senators Sent a Letter to ED Asking for a Delay on the Institutional Reporting Deadline for Gainful Employment (GE) and Financial Value Transparency Rules
On September 10, 2024, twenty senators sent a letter to the Department of Education calling for a delay of the institutional reporting deadline for gainful employment (GE) and financial value transparency (FVT) regulations until July 2025.
In March 2024, the Department announced a two-month extension of the GE and FVT reporting deadline, from July 31, 2024 to October 1, 2024. However, 20 senators, led by Tim Kaine (D-VA) and Roger Marshall (R-KS), now argue that ED’s two-month extension does not provide financial aid offices enough time to comply with an entirely new reporting framework, while also working to process financial aid.
The senators cited the rollout of the 2024-25 FAFSA as a continued challenge for aid offices to navigate. The letter specifically highlights major hurdles like the unavailability of batch corrections functionality for this FAFSA cycle, along with other technical issues that have caused significant delays for aid offices.
A copy of the press release, which includes the text of the letter, is found at:
House Republicans Send Letter to Special Counsel Urging Investigation into Potential Violation of the Hatch Act by Secretary of Education Cardona
On August 27, 2024, House Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC) and Congressman Keith Self (R-TX) recently sent a letter to Special Counsel Hampton Dellinger demanding an investigation into whether Secretary of Education Secretary Miguel Cardona and/or other U.S. Department of Education officials violated the Hatch Act. Chairwoman Foxx and Congressman Self pointed out that in recent communications to borrowers and the general public, Secretary Cardona blamed “Republican elected officials” for blocking the Saving on a Valuable Education (SAVE) Plan and encouraged the Special Counsel to open an investigation into the activities of the Secretary to determine whether he or other Department employees on his behalf, may have violated the Act. “[O]n or about July 12, 2024, Secretary Cardona emailed student loan borrowers from an account labeled ‘Secretary of Education Miguel Cardona noreply@studentaid.gov’ a message that appears to have been sent to aid the Democrat party and the Biden-Harris administration in the November 2024 elections,” the letter says. “Three times Secretary Cardona characterizes those challenging the Biden-Harris administration’s SAVE regulations as ‘Republican’ elected officials in an apparent effort to discredit them electorally.” The letter concludes by stating that these communications also raise the question of whether other employees in the Department who advised, drafted, or otherwise participated in the preparation of the email or the press release ran afoul of the Hatch Act.
A copy of the press release, which includes the text of the letter, is found at:
https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=411876.
FSA Issues Update to Financial Value Transparency and Gainful Employment Topics Page and FAQs
On September 5, 2024, Federal Student Aid (FSA) released an Electronic Announcement (GEN-24-02) announcing that it has updated its Financial Value Transparency and Gainful Employment Topics Page and FAQs. FSA added five new FAQs to the Reporting Section.
A copy of the updated Electronic Announcement is found at: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2024-04-05/financial-value-transparency-and-gainful-employment-topics-page-and-faqs-now-available-updated-sept-5-2024.
ED Releases Federal Register and DCL Regarding Verification Requirements for the 2025-2026 Award Year
On September 4, 2024, the Department of Education published a Federal Register Notice announcing the 2025–2026 Free Application for Federal Student Aid (FAFSA) verification items for applicants selected by the Department as well as the acceptable documentation for those items.
A Dear Colleague Letter (DCL) (GEN-24-10) summarizes and explains the changes in the verification process for the 2025–2026 award year. Additionally, at the end of this DCL, the Department has provided suggested text that an institution may use to fulfill its regulatory verification requirements.
The verification completion process for the 2025–2026 award year will largely be unchanged. The direct data exchange (FA-DDX) between the U.S. Department of Education and the Internal Revenue Service (IRS) will continue to import most U.S income and tax information to the FAFSA form. The federal tax information (FTI) that is transferred via the FA-DDX to the FAFSA form will continue to be considered verified for Title IV purposes. Therefore, institutions are not required to collect a Tax Return Transcript or a signed copy of the 2023 income tax return if FTI was successfully transferred. However, there are changes related to documentation requirements for victims of tax-related identity theft and verification of family size.
The Federal Register Notice is found at:
The DCL is found at: https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2024-09-04/2025-2026-award-year-fafsa-information-be-verified-and-acceptable-documentation#.
FSA Releases Prototype to Gain Deeper Understanding of 2025-2026 FAFSA
On September 3, 2024, Federal Student Aid (FSA) issued an Electronic Announcement (GEN-09-03) that the prototype for the Free Application for Federal Student Aid (FAFSA) was available. The prototype offers everyone an advance opportunity to gain a deeper understanding of the 2025–2026 FAFSA form user experience ahead of its release. The FAFSA prototype is not a complete replica of the 2025–2026 FAFSA form that will be available on fafsa.gov. Instead, it is a web-based design tool that allows users to navigate specific scenarios that many applicants will encounter on the live website, such as initiating a new application as a student or parent; or completing an in-progress application as a student, parent, or spouse. In the coming weeks, FSA will be adding common corrections scenarios, including missing critical data elements or signatures, and voluntary corrections. The Electronic Announcement also says that, when navigating a scenario, the prototype will advise users when particular actions must be taken and alert users that certain functionality is unavailable. The scenarios the prototype covers will not be exhaustive of all possible situations users may encounter while completing an actual 2025–2026 FAFSA form.
A copy of the Electronic Announcement is found at:
FSA Issues Announcement Recommending Institutions Pause Review of the Draft 2024 Completers Lists and Use of FVT/GE Reports as it Works Through Issues
On August 30, 2024, Federal Student Aid (FSA) updated its August 5, 2024 Electronic Announcement (GEN-24-07) announcing it has identified issues with the draft Completers Lists and FVT/GE Reports based upon feedback and questions raised by the community. FSA suggests institutions pause reviews of the draft Completers Lists and use of the FVT/GE Reports as FSA works to resolve these issues. FSA will notify the community with an update to this announcement once the issues have been resolved, and it will review the related reporting deadlines.
Under 34 C.F.R. §§ 668.402 and 668.403, the Department calculates debt-to-earnings (D/E) rates and earnings premium (EP) measures using the debt and earnings of students who completed the program during a specified cohort period. Depending on the number of students who completed the program, the cohort period will either be two years or four years. The draft 2024 FVT/GE Completers List identifies all relevant students who completed a GE and Eligible Non-GE program during the two-year cohort period (2017–18, 2018–19) or the four-year cohort period (2015–16, 2016–17, 2017–18, 2018–19) for the 2022 earnings year.
A copy of the updated Electronic Announcement is found at:
ED Makes Available 2025-2026 FAFSA Betas 2-4 Interest Form
On September 11, 2024, the Department of Education (ED) issued an Electronic Announcement (GENERAL-24-11) with the 2025-2026 FAFSAS Beta 2-4 interest form. Starting on September 11, 2024, community-based organizations (CBOs): high schools; districts representing multiple schools; country or state organizations; and institutions of higher education can submit an interest form to participate in Beta 2-4 for the 2025-2026 FAFSA cycle. The purpose of Beta 2-4 is to test the FAFSA form at a larger scale with a wide variety of users. CBOs may express interest in Beta 2 beginning in mid-October; Beta 3 beginning in early November; and Beta 4 beginning in mid-November. The deadline for submitting the interest form is September 20, 2024, at 3:00 PM EDT.
A copy of the Electronic Announcement is found at: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2024-09-11/availability-2025-26-fafsa-betas-2-4-interest-form.
FSA Releases Verification-Internal Revenue Service (IRS) Tax Returns Transcript Matrix
On August 29, 2024, Federal Student Aid (FSA) released an Electronic Announcement (GENERAL-24-108) that provided the 2024-2025 Verification-Internal Revenue Service (IRS) Tax Return Transcript Matrix for the verification of tax return information entered onto the 2024-2025 FAFSA.
A copy of the Electronic Announcement is found at: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2024-08-29/2024-25-fafsa-verification-internal-revenue-service-irs-tax-return-transcript-matrix.
FSA Issues Federal Register Notice Announcing the Direct Loan Interest Rates
On August 28, 2024, Federal Student Aid (FSA) announced in a Federal Register Notice the interest rates for Federal Direct Stafford/Ford Loans (Direct Subsidized Loans), Federal Direct Unsubsidized Stafford/Ford Loans (Direct Unsubsidized Loans), and Federal Direct PLUS Loans (Direct PLUS Loans) made under the William D. Ford Federal Direct Loan (Direct Loan) Program, with first disbursement dates on or after July 1, 2024, and before July 1, 2025. The interest rates are:
Loan Type Borrower Type Interest Rate
Direct Subsidized Loans Undergraduates 6.53%
Direct Unsubsidized Loans Undergraduates 6.53%
Direct Unsubsidized Loans Graduate and Professional Students 8.8%
Direct PLUS Loans Parents of Dependent Undergraduates 9.08%
Direct PLUS Loans Graduate and Professional Students 9.08%
A copy of the Electronic Announcement with the Federal Register Notice is found at:
Department of Education Announces Framework for 2025-2026 Testing Period for the 2025-2026 FAFSA and Interest Form for First Beta Period
On August 27, 2024, the Department of Education (ED) released a press release announcing the availability of the framework for the testing period it will use starting October 1, 2024, ahead of making the 2025–2026 Free Application for Federal Student Aid (FAFSA) available to all students and contributors on or before December 1, 2024. “The Department’s top priority remains ensuring the FAFSA form is stable and delivers a smooth and secure experience for families, schools, states, and other partners.”
During a series of beta tests, the Department will work with community-based organizations (CBOs), high schools, institutions of higher education, states, and limited groups of students and contributors to fill out and submit the form. Starting on August 27, 2024 through September 5, 2024, CBOs can submit a form to express interest in participating in the first beta, Beta 1, which will launch on October 1, 2024.
“We’re using the beta testing period to uncover and fix issues with the FAFSA form before the form is available to millions of students and their families,” said FAFSA Executive Advisor Jeremy Singer. “During this first beta test, we’re grateful that community-based organizations are willing to work with us to support students and contributors when they encounter issues. In the end, our collective efforts will benefit all students and their families in their pursuit of higher education.”
A copy of the press release is found at: https://www.ed.gov/news/press-releases/us-department-education-releases-framework-2025%E2%80%9326-fafsa-testing-period-and-interest-form-first-beta-period.
FSA Updates Regulatory Requirements for Financial Value Transparency and Gainful Employment
On August 26, 2024, Federal Student Aid (FSA) updated its Dear Colleague Letter (GEN-24-04) on regulatory requirements for financial value transparency and gainful employment to clarify which award years are used in calculating Debt-to-Earnings (D/E) rates in the second and subsequent rounds of calculations for programs using transitional reporting. The DCL states that for institutions using transitional reporting for the first six years that the regulations are in effect, to calculate D/E rates for the institution’s programs, the Department will use earnings for the students from the appropriate cohort period but will use debt information for different students from the most recently completed award years covered by transitional reporting. If a program has at least 30 completers in the two most recently completed award years (award years 2022-23 and 2023-24 in the first round of calculations), a two-year cohort will be used in median debt calculations. In subsequent calculation years, as reporting data covers more award years, if a program does not have at least 30 completers in the two most recently completed award years, any reporting data from the four most recently completed award years may be used.
A copy of the updated Electronic Announcement is found at:
FSA Updates its Electronic Announcement to Announce that Schools May Begin Reporting Financial Value Transparency and Gainful Employment (FVT/GE) Program Level Data Via the FVT/GE Programs Page
On August 26, 2026, Federal Student Aid (FSA) updated its Electronic Announcement (GEN-24-06) announcing that schools may now begin reporting Financial Value Transparency and Gainful Employment (FVT/GE) Program Level data via the FVT/GE Programs page on the NSLDS Professional Access website, which is one option for reporting FVT/GE data to NSLDS. Previously schools were able to report FVT/GE Program data via Spreadsheet Submittal on the web and Batch Submittal via SAIG. To view and add data on the FVT/GE Program webpage, an institution’s account must be enrolled for “Enrollment Update for NSLDS Online Services.”
A copy of the updated Electronic Announcement is found at:
FSA Announces Program Information for 2024 Virtual Federal Student Aid Training Conference
On August 13, 2024, Federal Student Aid (FSA) released an Electronic Announcement (GENERAL-24-101) providing program information for the 2024 Virtual Federal Student Aid Training Conference. It will be offered from December 3-6, 2024.
A copy of the Electronic Announcement is found at: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2024-08-13/2024-virtual-federal-student-aid-training-conference-program-information-now-available.
VA Releases Another Updated “School Certifying Official Handbook”
On August 30, 2024, another updated version of the School Certifying Official Handbook was updated on the GI Bill website. [See article below.] The change is to bring the VA into compliance with the Supreme Court case, Rudisill v. McDonough, where it was ruled that Veterans who complete tours of duty that cover different GI bill periods are now eligible for 48 months of educational benefits whereas before they were only eligible for 36 months of eligibility.
Veterans who have two or more qualifying periods of active duty, may now receive up to 48 months of entitlement if eligible for Post-9/11 GI Bill and either Montgomery GI Bill Active Duty (MGIB-AD) or Montgomery GI Bill Selected Reserve (MGIB-SR). Veterans who have two or more qualifying periods of active duty no longer have to relinquish a benefit, and their chapter 33 benefits will not be restricted to only the months of entitlement remaining under chapter 30 if they switch to chapter 33.
VA is working to update beneficiary records to reflect remaining entitlement without any beneficiary action required. VA will provide beneficiaries with instructions if they need to take any action.
VA Releases Updated “School Certifying Official Handbook”
On August 20, 2024, the U.S. Department of Veterans Affairs released the updated version of the School Certifying Official Handbook, which includes a number of updates:
The New Sections to the SOC Handbook are:
- Schedule of Expenditures of Federal Awards (SEFA): The SEFA is a financial statement that lists an organization’s federal assistance expenditures for a fiscal year and is a required supplemental schedule for organizations that are subject to the Single Audit Act.
- Conservation of Entitlement: If a student asks to be certified for fewer applicable credits that he/she takes to conserve entitlement, a SOC can certify fewer credits than actually taken.
Three of the Significant Changes are:
- 85/15 section: Included is guidance on the 35% exemption from the 85/15 ratio reporting. A school may request a 35% exemption if the total number of VA beneficiaries at the school is less than or equal to 35% of the total number of the total student enrollment. The SOC Handbook clarifies: “An accredited school with a 35% Exemption is not required to calculate, maintain, or periodically report 85/15 calculations to VA.”
- Reductions and Withdrawals section: Added are the following changes:
- For terms beginning on or after January 1, 2025: All changes in credit hours must be reported to VA regardless of impact on training time. This is necessary to facilitate automated processing of certain benefit types.
- For terms that began on or after January 1, 2024: If credit hours increase and an amended certification is required, you should report the increase effective the first day of the term (or the first day of the course if the course begins more than 7 calendar days after the start of the academic term).
- Submitting Enrollment Certifications – Original Applications: Modified to provide that schools ensure that the student has applied for VA benefits prior to submitting any enrollment certifications to VA and a reminder that schools should certify all 00000 enrollment periods as requested by the student and VA will determine the date of eligibility.
IRS Issues Guidance to Implement Matching Contributions Made on Qualified Student Loan Payments under the SECURE 2.0 Act
The Internal Revenue Service (IRS) issued guidance with respect to matching contributions made on account of qualified student loan payments under the SECURE 2.0 Act. (Notice 2024-63) Section 221(d)(1) of the Internal Revenue Code (the Code) defines a qualified education loan as “any indebtedness incurred by a taxpayer solely to pay qualified higher education expenses, subject to the conditions of section 221(d)(1)(A)-(C), which provide that the qualified higher education expenses must be: (i) incurred on behalf of the taxpayer, the taxpayer’s spouse, or any dependent of the taxpayer as of the time the indebtedness was incurred, (ii) paid or incurred within a reasonable period of time before or after the indebtedness is incurred, and (iii) attributable to education furnished during a period during which the recipient was an eligible student.”
Section 110 of the SECURE 2.0 Act allows employers to make matching contributions on account of employees’ qualified student loan payments (QSLPs) under 401(k) plans, 403(b) plans, SIMPLE Individual Retirement Account plans, and governmental 457(b) plans. It applies to contributions made for plan years beginning after December 31, 2024. The notice provides guidance on discrete issues under the SECURE 2.0 Act to assist plan sponsors in implementing QSLP match programs and answer questions on QSLP matches, employer certification of QSLPs, reasonable procedures for QSLP matches, and QSLP actual deferral percentage testing. For plan years beginning before January 1, 2025, a plan sponsor may rely on a good faith, reasonable interpretation of the provision.
A copy of the guidance is found at: https://www.irs.gov/pub/irs-drop/n-24-63.pdf.
Missouri and Six Other State AGs File Lawsuit Against Department of Education’s NPRM on Federal Student Loan Forgiveness; U.S. District Court Issues Temporary Restraining Order Blocking ED from Implementing its Student Loan Forgiveness Plan
On September 3, 2024, Missouri Attorney General (AG) Andrew Bailey, along with the AGs of Alabama, Arkansas, Florida, Georgia, North Dakota, and Ohio, filed a lawsuit in the U.S. District Court for the Southern District of Georgia, Brunswick Division, challenging the U.S. Department of Education’s Notice of Proposed Rulemaking (NPRM) providing waivers of federal student loan debt. The States say that, through a compulsory process at the end of August, they learned the Secretary of Education plans to implement a new, third federal student loan forgiveness plan without publication and has been planning to do so since May. The lawsuit says that the Secretary is unlawfully trying to mass cancel hundreds of billions of dollars of loans and has quietly instructed its federal student loan servicers to immediately begin cancellation as early as September 3rd or September 7th.
Less than 48 hours later, a U.S. District Court for the Southern District of Georgia Brunswick Division issued a temporary restraining order blocking ED from implementing its final rules on student loan forgiveness, which were released in April for public comment.
Supreme Court Denies Emergency Motion to Vacate Court of Appeals for the Eighth Circuit Injunction Blocking the Implementation of the SAVE Plan
On August 28, 2024, the U.S. Supreme Court denied the emergency request filed by the U.S. Department of Justice (DOJ) urging the court to vacate the injunction issued by the U.S. Court of Appeals for the Eighth Circuit blocking the U.S. Department of Education from implementing the Saving on a Valuable Education (SAVE) Plan. In a one sentence unsigned decision, the court said that it “expects that the Court of Appeals will render its decision with appropriate dispatch.” Previously the DOJ had asked the high court to vacate the injunction, arguing it was “overbroad” and that, under the Higher Education Act, the Department has statutory authority to set the parameters of income-contingent repayment plans just as it has for three decades. On the other hand, the plaintiff states have countered that the SAVE Plan was not authorized by Congress, citing a Supreme Court case from last year that struck down the proposed federal student loan forgiveness program. They have also suggested that the program would be expensive, costing $475 billion. Following the Supreme Court’s decision, it is likely that the appeals courts will rule on whether the program can stand.
On August 16, 2024, following the decision issued by the U.S. Court of Appeals for the Eighth Circuit, the Department of Education issued a statement to borrowers explaining that a federal court has issued a stay preventing the Department from operating the SAVE Plan. “This page will be updated as additional guidance and information becomes available. Please note that information related to income-driven repayment plans, including the SAVE Plan, may not be accurate at this time.”
A copy of the statement is found at: https://studentaid.gov/announcements-events/save-court-actions.
Supreme Court Denies ED’s Petition to Lift Injunctions that Prohibit ED from Enforcing the New Title IX Regulations
On August 16, 2024, the Supreme Court denied an emergency request from the Department of Justice to enforce updates to a federal rule that bars sex-based discrimination in education. The decision halts the Title IX rule that would have extended Title IX to include expanded protections for LGBTQ+ students for those states and schools that challenged the rule.
The 5-4 decision rejected a request to allow some parts of the rule, largely those not related to gender identity, to go into effect in states where challenges that address transgender issues are playing out in lower courts. The Supreme Court’s decision does not ultimately decide whether the new Title IX rule is legal or not. That issue must still work its way through the federal courts.
- “On this limited record in its emergency applications, the Government has not provided this Court a sufficient basis to disturb the lower courts’ interim conclusions that the three provisions found likely to be unlawful are intertwined with and affect other provisions of the rule,” the unsigned court order reads.
- Justice Sonia Sotomayor, who dissented, wrote: “By blocking the Government from enforcing scores of regulations that respondents never challenged and that bear no apparent relationship to respondents’ alleged injuries, the lower courts went beyond their authority to remedy the discrete harms alleged here.
The cases, brought by Republican attorneys general in 26 states, which have been granted an injunction preventing the Department from enforcing the Title IX rule were based on the opinion that the Department of Education lacked the legal authority to expand prohibited sex-based discrimination under Title IX to include discrimination based on gender identity.
GAO Releases Report Finding Only Half of the Borrowers are in Repayment
On July 29, 2024, the U.S. Government Accountability Office (GAO) released a report, entitled, “Federal Student Loans: Preliminary Observations on Borrower Repayment Practices after the Payment Pause (Report),” which was addressed to Ranking Member of the Senate Committee on Health, Education, Labor and Pensions (HELP) Bill Cassidy, MD (R-LA) and Chairman of the House Education and the Workforce Committee Virginia Foxx (R-NC). The report found that about half of the borrowers were current in their repayment (17.8 million), while almost 30 percent of borrowers were past due on their payments. The remaining borrowers were not expected to make payments because their loans were in deferment (10 percent) or in forbearance (7 percent).
Following the release of the report, Chairman Foxx and Ranking Member Cassidy released press releases on the GAO report, which said:
“The majority of borrowers don’t believe they need to pay back the loans they knowingly took on, and who can blame them after years of false hope and illegal schemes from the Biden-Harris administration?”
A copy of the press release is found at:
https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=411854.
Ranking Member Cassidy said: “These borrowers are racking up interest with missed payments while waiting for the false promise of widespread debt ‘cancellation’ this administration has no legal authority to deliver.”
A copy of the press release is found at:
NCES Releases Report Showing Number of Colleges and Universities Shrunk Last Year
On August 21, 2024, the U.S. Department of Education’s National Center for Education Statistics (NCES) released a new report titled, “The Total Number of Higher Education Institutions Decreases by 2 Percent,” which found the number of Title IV institutions – those eligible to participate in federal financial aid programs – fell from 5,918 in the 2022–2023 academic year to 5,819 in the 2023–24 academic year, a net loss of 99 colleges and universities or almost 2 percent. The report found that the four-year public sector was the only sector to see an increase in institutions – that increase included 16 institutions that were two-year in 2022–2023 and became four-year for 2023–24. Of the total number of colleges and universities, 2,691 were classified as four-year institutions, 1,496 were two-year institutions, and 1,632 were less-than-two-year institutions. The report also showed around 2.5 million high school students were enrolled in college courses for credit during the 2022–2023 academic year, and shed light on tuition and fees and unduplicated enrollment head counts in 2023–2024.
A copy of the press release on the report is found at: