House Democrats Send Letter to Secretary of Education Raising Concerns about Challenges with the FAFSA
On June 7, 2024, House Democrats sent a letter to Secretary of Education Miguel Cardona expressing concerns about several issues with the rollout of the FAFSA. The letter commended the Department of Education for its effort to increasing FAFSA completion and the guidance issued on April 30, 2024 and May 20, 2024 addressing barriers for students whose parents or spouses do not have a Social Security Number (SSN). However, the House Democrats said that the guidance may prove difficult for students to understand and utilize as students and their family members are understandably hesitant to submit sensitive identity verification documents to FSA. In addition, the House Democrats urged the Department to identify individuals who have been unable to obtain their FSA ID and immediately assist them with accessing the May 20, 2024 technical fix. A number of additional requests were made of the Secretary of Education including making every effort under its existing programs and authority to connect students with resources that can help make up for the aid they may have missed in states that award financial aid on a first-come, first-serve basis.
A copy of the press release, which includes a copy of the letter, is found at:
Ranking Member Cassidy and Chairwoman Foxx Slam Biden Administration for Illegally Obstructing a Federal Investigation into the Botched FAFSA Rollout
On June 3, 2024, Ranking Member of the Senate Health, Education, Labor, and Pensions (HELP) Committee Bill Cassidy M.D. (R-LA) and Chairwoman of the House Education and the Workforce Committee Virginia Foxx (R-NC) sent a letter to Secretary of Education Miguel Cardona blasting him for illegally obstructing the Government Accountability Office’s (GAO) investigation into the administration’s failure to implement the new FAFSA. Previously, Cassidy and Foxx made multiple requests to GAO to investigate the Department of Education’s botched FAFSA rollout.
In a press release, Senator Cassidy and Congresswoman Foxx claim that from the time GAO began its investigation earlier this year, the Department has failed repeatedly to provide requested information to GAO as required by law. According to GAO, investigators met with the Department “numerous times” and offered accommodations to allow the Department to gather the documents relevant to the investigation. Despite this, GAO “still [has] not received many of the requested items.” Further, GAO stated that these delays “have impacted [GAO’s] progress on the work and [its] ability to meet [its] expected timeframe for issuance [of its findings] this summer ahead of the fall FAFSA cycle.”
A copy of the press release, which includes a copy of the letter, is found at:
Lawmakers Urge ED to Withdraw Latest Attempt to Transfer Student Loan Debt to Taxpayers
On May 20, 2024, Senator Bill Cassidy, M.D. (R-LA), Ranking Member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, and Congresswoman Virginia Foxx (R-NC), Chairwoman of the House Education and the Workforce Committee, and 129 lawmakers is urging the Department of Education to withdraw its latest attempt to transfer student loan debt onto American taxpayers. The Department’s Notice of Proposed Rulemaking (NPRM) will cost Americans an additional $147 billion and bring the total student loan debt transferred to taxpayers to as much as $1 trillion. The letter sent to Secretary of Education Miguel Cardona said:
“The latest Notice of Proposed Rule Making (NPRM) proposed by your Department of Education (Department) on April 17, 2024, represents the latest in a string of reckless attempts to transfer as much as $1 trillion of student loan debt from those who willingly borrowed to those who did not or have already repaid their loans.” The letter went on to say: “In addition to the fiscally irresponsible nature of this backdoor attempt to enact ‘free’ college, the administration continues to use borrowers as political pawns knowing full well these proposed actions are illegal. The Supreme Court has made it abundantly clear that there is zero authority to write-off federal student loans en masse last June when the Department’s ‘Plan A’ was ruled unconstitutional.”
A copy of the press release, which includes the text of the letter, is found at:
https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=410587.
Ranking Member Bobby Scott Expresses Support for the NPRM on Federal Student Loan Forgiveness
On May 16, 2024, Ranking Member of the House Education and the Workforce Committee Bobby Scott (D-VA) sent a letter to Secretary of Education Miguel Cardona expressing support for the Notice of Proposed Rulemaking (NPRM) on federal student loan forgiveness. Ranking Member Scott said that this rule will give the most vulnerable borrowers in our country increased access to economic mobility and that it will be particularly impactful for borrowers more likely to have higher amounts of federal student loan debt, including borrowers of color.
Ranking Member Scott said: “Congressional Republicans continue to advance policies that would destabilize our higher education system and harm students struggling to afford college through legislation such as their College Cost Reduction Act, which attempts to raise the cost of attending college for students and families by restricting access to federal student aid and eliminating affordable loan repayment plans.
A copy of the press release, which includes the text of the letter, is found at:
FSA Releases Updated Instructions for the Electronic Submission of Annual Financial and Compliance Audit Statements
On June 10, 2024, Federal Student Aid (FSA) released an Electronic Announcement (GEN-24-70) with updated instructions for the electronic submission of annual financial and compliance audit statements, including the 90/10 revenue footnote for proprietary institutions with fiscal years that begin on or after January 1, 2023. The Electronic Announcement also applies to proprietary institutions that have gone through, or are in the process of a change of ownership to become a nonprofit or public institution and are required to report the 90/10 revenue calculation.
On October 28, 2022, the final regulations amending the 90/10 revenue reporting requirements and calculation were published in the Federal Register with an effective date of July 1, 2023. In order to accommodate the updated 90/10 regulations in eZ-Audit, extensive development updates are required, which are currently in process and will not be ready with an Audit Due Date of June 30, 2024. Instead, FSA will require this specific cohort of institutions to submit their Annual Submissions through the Document Center available on the Common Origination and Disbursement (COD) website in order to meet the submission deadline.
A copy of the Electronic Announcement is found at: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2024-06-10/updated-instructions-electronic-submission-annual-financial-and-compliance-audit-statements-proprietary-institutions#.
Secretary Cardona Outlines Steps Department is Taking to Improve FSA
On May 30, 2024, Secretary of Education Miguel Cardona outlined in a letter to the FSA staff comprehensive steps the Department is taking to improve Federal Student Aid (FSA) for students, families, borrowers, and schools. The steps are designed to address the botched rollout of the FAFSA, which has caused many questions stemming from concern by both Democrats and Republicans with the House Committee on Education and the Workforce hosting two hearings. Specifically, The Secretary said that the steps the Department is taking is:
- Searching for a new Chief Operating Officer (COO) for the FSA.
- Conducting a full-scale review of FSA’s current and historical organization.
- Hired an independent consulting firm to make recommendations to the COO and the Secretary on ways to improve the design, structure, and processes within FSA, with a focus on building an updated organizational structure and workflow.
- Reviewing contracts and acquisition procedures to ensure contracts are appropriately structured to hold vendors accountable for meeting key deadlines, achieving desired outcomes, and providing the best value to the agency and protecting taxpayers’ resources.
- The Department is also restructuring senior leader protocols to increase accountability.
- The Department will also create a new IT innovation team empowered to lead information technology design to support the digital transformation of the organization.
- Seeking input from the Office of the Inspector General (OIG) and engaging Members of Congress.
- Continuing our robust research efforts to parents, students, colleges, and community organizations and conduct listening sessions with them this summer.
A copy of the blog post, which includes the full letter to staff, is found at:
https://blog.ed.gov/2024/05/secretary-cardona-outlines-steps-modernized-fsa/.
Frequently Asked Questions Now Available on Financial Responsibility and Certification Procedures
On May 20, 2024, the Office of Postsecondary Education (OPE) released an Electronic Announcement (GEN-24-61) addressing frequently asked questions on financial responsibility and certification procedures. Final regulations, which included these provisions were published on October 31, 2023, and go into effect on July 1, 2024.
A copy of the Electronic Announcement with links to the two sets of frequently asked questions is found at:
Department of Education Approves Additional $7.7 Billion in Student Debt Relief for 160,000 Borrowers
On May 22, 2024, the Department of Education announced the approval of $7.7 billion in additional student loan forgiveness for 160,500 borrowers. The discharges are for three categories of borrowers:
- $5.2 billion for 66,900 borrowers through fixes to the Public Service Loan Forgiveness (PSLF) Program.
- $613 million for 54,300 borrowers who signed up for the Saving on a Valuable Education (SAVE) Plan.
- $1.9 billion for 39,200 borrowers through administrative adjustments to Income Driven Repayment (IDR) payment counts.
A copy of the press release is found at: https://www.ed.gov/news/press-releases/biden-harris-administration-announces-additional-77-billion-approved-student-debt-relief-160000-borrowers.
Biden-Harris Administration Allows Borrowers More Time to Consolidate Loans to Get Credit for Progress Toward Loan Forgiveness Programs
On May 15, 2024, the Biden-Harris Administration announced an update on the timing of the payment count adjustment. The administrative fix ensures borrowers get proper credit for progress borrowers made toward income-driven repayment (IDR) forgiveness and Public Service Loan Forgiveness (PSLF). The payment count adjustment is likely to be fully implemented in September 2024, which will allow borrowers with Direct Loans or Federal Family Education Loan (FFEL) Program loans held by the Department of Education will see a full and accurate count of their progress toward loan forgiveness. Because of the updated timeline, borrowers with non-federally held FFEL loans who apply to consolidate by June 30th can still benefit from the payment count adjustment. The prior consolidation deadline was April 30th.
Under Secretary of Education James Kvaal said: “The Department is working swiftly to ensure borrowers get credit for every month they’ve rightfully earned toward forgiveness.”
A copy of the press release is found at: https://www.ed.gov/news/press-releases/biden-harris-administration-allows-borrowers-more-time-consolidate-loans-get-credit-progress-toward-loan-forgiveness-programs.
ED Announces Completion of Processing of ISIRs Affected by Federal Processing System or IRS Direct Data Exchange Issues
On May 17, 2024, Federal Student Aid (FSA) announced that it has completed reprocessing ISIRs affected by identified Federal Processing System or IRS Direct Data Exchange issues. As a result, schools are advised to no longer use previously provided data files that identified potential impacted records due to the issues.
A copy of the Electronic Announcement (GEN-24-60) is found at:
FSA Provides Summary of Upcoming Changes to Financial Responsibility, Administrative Capability, Certification Procedures, and Ability-to-Benefit Rules
On May 16, 2024, the Department of Education issued a Dear Colleague Letter (DCL) (GEN-24-07) regarding the implementation of the final rule published on October 31, 2023, regarding financial responsibility, administrative capability, certification procedures, and ability-to-benefit (ATB) rules. The DCL provides a summary of the requirements that the Department is implementing for the 2024-2025 award year. These regulations go into effect on July 1, 2024.
A copy of the DCL is found at: https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2024-05-16/implementation-regulations-related-financial-responsibility-administrative-capability-certification-procedures-and-ability-benefit-atb.
FSA Reminds All Nonprofit and Public Institutions that their Single Audit Reports must be Submitted to the Department of Education
On May 15, 2024, Federal Student Aid (FSA) released an Electronic Announcement (GEN-24-57) reminding all nonprofit and public institutions that they must submit their Single Audit Reports to the Department of Education. Institutions under the Single Audit Act have an audit submission deadline of the earlier of 30 calendar days after the date of the auditor’s report or nine months after the end of the audit period.
The Electronic Announcement also stated that the Department revised the submission deadline for proprietary and foreign institutions to the earlier of 30 calendar days after the date of the auditor’s reports or six months after the last day of the institution’s fiscal year to more closely reflect the audit submission requirements for institutions submitting audits under the Single Audit Act.
A copy of the Electronic Announcement is found at: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2024-05-15/audit-submission-requirements-institutions-under-single-audit-act.
FSA Announces Interest Rates for Direct Loans First Disbursed between July 1, 2024, and June 30, 2025
On May 14, 2024, Federal Student Aid (FSA) released an Electronic Announcement (DL-24-03) announcing the interest rates for Direct Loans first disbursed between July 1, 2024, and June 30, 2025.
- Direct Subsidized and Unsubsidized Loans for Undergraduate Students 53%
- Direct Unsubsidized Loans for Graduate and Professional Students 8.08%
- Direct PLUS Loans 9.08%
A copy of the Electronic Announcement is found at: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2024-05-14/interest-rates-direct-loans-first-disbursed-between-july-1-2024-and-june-30-2025#.
Veterans Benefits Administration Announces the Official Release of the School Certifying Official (SCO) Resource Matrix
On May 11, 2024, the Veterans Benefits Administration announced the official release of the School Certifying Official (SCO) Resource Matrix. Included in the new tool is:
- Access to the SCO Handbook and Training Portal;
- Links to frequently accessed tools, such as Yellow Ribbon Tool, WEAMS and the GI Bill Comparison Tool; and
- Access to Veterans Readiness and Employment (Chapter 31) resources.
The Resource Matrix is found at: https://www.va.gov/school-administrators/.
Included in the Resource Matrix is the link to frequently asked questions on 85/15, which is found at: https://benefits.va.gov/gibill/85_15_faqs.asp.
CFPB Announces Lawsuit Against PHEAA for Pursuing Borrowers for Loans Discharged in Bankruptcy
On May 31, 2024, the Consumer Financial Protection Bureau (CFPB) announced that it had filed a lawsuit against the Pennsylvania Higher Education Assistance Agency (PHEAA) for illegally collecting on student loans that have been discharged in bankruptcy and sending false information about consumers to credit reporting companies. In its announcement, the CFPB said that PHEAA services a range of private student loans, including those that have strict discharge requirements in bankruptcy and non-qualified loans that are routinely discharged. The CFPB said that nevertheless, when a consumer with private student loans receives a bankruptcy discharge, the company’s practice is to treat all of that consumer’s education-related loans as not discharged, unless it receives an explicit court order or other express direction from the loan owner. The CFPB alleges that PHEAA’s practices violate the Consumer Financial Protection Act and the Fair Credit Reporting Act’s implementing regulation. The lawsuit asks the court to order PHEAA to stop the conduct, provide redress to borrowers it has harmed, and pay a civil penalty.
A copy of the CFPB press release is found at: https://www.consumerfinance.gov/about-us/newsroom/cfpb-sues-student-loan-servicer-pheaa-for-pursuing-borrowers-for-loans-discharged-in-bankruptcy/.
CFPB Announces Action Against Western Benefits Group for Charging Advance Fees for Student Debt Relief
On May 20, 2024, the Consumer Financial Protection Bureau (CFPB) announced that it had taken action against Western Benefits Group for charging illegal advance fees for student loan debt relief services and misrepresenting to consumers that advance fees would go toward paying down their loans. The CFPB found Western Benefits Group also misrepresented that it was affiliated with and endorsed by the Department of Education, and that the company would help consumers consolidate student loans, lower their monthly student loan payments, or obtain loan consolidation. The CFPB said that it was ordering Western Benefits Group to permanently cease operations, paying a $400,000 penalty, and rescind all existing agreements with consumers.
A copy of the CFPB press release is found at:
New School Releases Report Showing 2.2 Million Older Americans Have Student Loan Debt
On May 29, 2024, the New School’s Schwartz Center for Economic Policy released a report titled, “How Student Loan Debt Impedes Retirement and Financial Security for Older Workers,” which found that 2.2 million individuals above the age of 55 have federal and private student loan debt, which is impeding their retirement plans. Based on data from the Federal Reserve’s 2022 Survey of Consumer Finance, around 43 percent of borrowers in that age range (55 and over) are in middle-income brackets. The average debt owed by older Americans who make less than $54,600 is around $58,000. The report concluded that older Americans can take years to finish paying their student loans, and more than 14 percent do not even have a degree to show for their debt. Further, the report stated: “Three policies would help minimize the negative impacts of student debt on retirement savings: student loan forgiveness, income-based repayments – key components of the SAVE Plan – and preventing garnishment of Social Security benefits to repay student loans.”
A copy of the report is found at: