What Can we Expect for Higher Education under the Trump Administration?
On November 5, 2024, voters across the country elected Donald J. Trump as the 47th President of the United States. To date, a possible Secretary of Education has not been named, but many believe that the second Trump Administration is likely to lead to renewed scrutiny of colleges and universities over high profile campus issues around diversity, equity, and campus protests. Higher education policy was not a focus of President Trump’s first term, but during the campaign the President-elect vowed to root out alleged left-wing ideological bias that threatens free speech.
While President-elect Trump talked about eliminating the Department of Education during his campaign, it is unlikely to happen since it would require congressional action. Republicans have tried during its existence of almost 50 years and the Department has survived multiple Republican administrations. More importantly, the Department’s main functions of funneling money for education to the states, maintaining curricular standards, and lending money to college students are broadly popular with voters.
President-elect Trump said he would use the accreditation process as his “secret weapon” to force ideological changes on college campuses. He has echoed Republican criticisms against how colleges have handled campus protests. His campaign platform promises were to “deport pro-Hamas radicals and make our college campuses safe and patriotic again.” As of June, the Department of Education’s Office of Civil Rights had more than 100 pending Title VI investigations that were opened since the latest Israel-Hamas war broke out. Title VI requires federally funded colleges to prevent discrimination on race, color and national origin.
The Trump Administration will likely bring about major changes to higher education regulations, including rules that threaten to cut off federal student aid access to poor-performing institutions. President-elect Trump also vowed to roll back protections for transgender students under the Biden Administration’s new Title IX rule on Day 1 of his presidency. Under the first Trump Administration, the Department of Education rolled back the Obama-era gainful employment rule in 2019, with then Secretary of Education Betsy DeVos saying it unfairly singled out for-profit colleges. The first Trump Administration also released its own version of borrower defense rules that made it harder for students to prove they have been defrauded and get debt relief. These actions offer a roadmap for what his second term could look like.
Senate Republicans Name Bill Cassidy to Serve as then Next Chair of the Senate HELP Committee
On November 14, 2024, Senate Republicans named Senator Bill Cassidy, MD (R-LA) to serve as the next Chair of the Senate Health, Education, Labor, and Pensions Committee when the Republicans take the majority in January. Senator served as the Ranking Member of the HELP Committee. Senator Cassidy said: “I am excited to work closely with President Trump and my Republican colleagues to implement a Pro-America agenda and deliver real solutions for Louisiana and American families.
A copy of the Senator’s press release is found at:
Chairwoman Foxx Expresses Concern that ED is Considering Rescinding Guidance on Third-Party Servicers
On November 7, 2024, House Education and the Workforce Committee Chairman Virginia Foxx (R-NC) sent a letter to Secretary of Education Miguel Cardona expressing her concerns that the Department of Education is contemplating rescinding Dear Colleague Letter GEN-11-05 that describes how colleges and universities may enter into contracts with third-party servicers (TPS) that offer bundled services, such as online courseware, marketing, and retention services for students. Chairman Foxx said that the higher education community was relieved in April 2023 when the Department responded to the public outcry and withdrew TPS guidance that would have cracked down on online program managers.
Chairwoman Foxx said it “appears the Biden-Harris Administration is planning to radically regulate online education and other services before the Trump Administration takes office, this is unacceptable.” She went on to say that “[e]liminating or revising the guidance now would obliterate a decades old, foundational principle of public-private ed tech partnerships that has worked.” Chairman Foxx urged the Secretary to avoid any changes to this guidance without working with Congress to clarify the law “lest institutions be left in the dark about their compliance and responsibilities.”
A copy of the press release, which includes the text of the letter, is found at:
https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=412033.
Senate Democrats Send Letter to DOJ and ED in Support of Process to Make it Easier for Borrowers to Discharge their Federal Student Loans in Bankruptcy
On October 28, 2024, Senators Elizabeth Warren (D-MA), Dick Durbin (D-IL), Sheldon Whitehouse (D-RI), and Raphael Warnock (D-GA) sent a letter to the Department of Justice (DOJ) and the Department of Education (ED) in support of their progress in making it easier for borrowers who are struggling financially to discharge their federal student loans in bankruptcy. In November 2022, the DOJ and ED released guidance to DOJ attorneys that sought to streamline the process of discharging student loans in bankruptcy. The letter stated that courts generally accepted the guidance offered by the DOJ.
The letter states: “ED and DOJ deserve praise for the complete turnaround of student loan bankruptcy outcomes, and you should continue to build on the successes of the streamlined guidance so that more borrowers with crushing student loan debt can find relief.” The letter concludes by urging the DOJ and ED to continue to expand awareness of the guidance.
A copy of the press release, which includes the text of the letter, is found at:
https://www.warren.senate.gov/newsroom/press-releases/warren-durbin-whitehouse-warnock-push-doj-ed-for-expanded-outreach-on-discharging-student-loan-debt-in-bankruptcy.
Department of Education and Agriculture Department Announce Joint Agreement on Student Access to SNAP Benefits
On November 7, 2024, the Department of Education’s Office of Student Aid (FSA) and the Agriculture Department’s Food and Nutrition Service (FNS) announced the signing of a joint agreement to strengthen college student access to the Supplemental Nutrition Assistance Program (SNAP). The agreement’s goal is to increase awareness of SNAP among college students as recent data shows millions of eligible students falling through the cracks. Emails will be sent to low-income students who may be eligible for SNAP. They will also work with institutions of higher education to help them provide clear guidance to students on SNAP eligibility and application processes.
A copy of the announcement is found at: https://www.ed.gov/about/news/press-release/new-partnership-between-us-departments-of-agriculture-and-education-expand-snap-awareness-and-access-eligible-college-students.
ED Offers Supplemental Training Resource for the FVT GE Process
On November 6, 2024, the Department of Education offered a supplemental training resource for the Financial Value Transparency and Gainful Employment (FVT GE) process. This resource offers additional assistance and guidance for complying with the FVT/GE reporting requirements and review of the FVT/GE Completers Lists via the National Student Loan Data System (NSLDS). This new supplemental training resource should be used alongside the NSLDS FVT/GE User Guide.
A copy of the notice is found at: https://fsapartners.ed.gov/knowledge-center/library/nslds-user-resources/2024-11-06/nslds-financial-value-transparency-and-gainful-employment-fvt-ge-supplemental-training-resource.
Previously, on November 1, 2024, Federal Student Aid (FSA) released an Electronic Announcement updating an Electronic Announcement of April 12, 2024 (GE-24-04) stating that the FVT/GE Program Enrollment Detail Report (SHDPE1) has been updated and is now available on the NSLDS Professional Access website to assist schools with the FVT/GE reporting requirements.
A copy of the Electronic Announcement is found at: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2024-04-12/nslds-professional-access-nslds-financial-value-transparency-and-gainful-employment-reports-updated-nov-1-2024.
FSA Reminds Institutions of Disclosures of all Related Party Transactions in Audited Financial Statements
On October 31, 2024, Federal Student Aid (FSA) issued an Electronic Announcement (GENERAL-24-127) reminding institutions of the longstanding requirement to disclose all related party transactions in audited financial statements and explaining how institutions can comply with these requirements given recent guidance provided by the American Institute of Certified Public Accountants (AICPA) to auditors. It also describes the actions the Department will take concerning the disclosure of related party transactions identified by the auditor as unaudited and not covered by the auditor’s opinion on the financial statements.
The Electronic Announcement said it has heard from some institutions who have expressed concerns about their ability to comply with the Department’s new regulations for related party transactions. The Department indicated that it is clarifying that an institution is responsible for disclosing all related party transactions of which it is aware.
The Electronic Announcement states: “Institutions are required to have an adequate system of internal controls under the administrative capability standards at 34 C.F.R. 668.16(c). An effective system of internal controls increases the likelihood that an entity will achieve its objectives which would include compliance with the Department’s related party relationship and transaction disclosure requirement.”
A copy of the Electronic Announcement is found at: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2024-10-31/disclosure-related-party-transactions-financial-statements#.
FSA Announces the Availability of Resources to Assist with Preparation for the 2025-2026 FAFSA
On October 30, 2024, Federal Student Aid (FSA) released an Electronic Announcement (GENERAL-24-125) that includes information about new and updated resources for institutions, state aid agencies, software vendors, supporting organizations, and students and families as they begin their preparations for the 2025-2026 FAFSA cycle. It also includes information about recent technical fixes to the FAFSA form and system. The Department is on track to make the 2025-2026 FAFSA form broadly available by December 1, 2024.
A copy of the Electronic Announcement is found at: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2024-10-30/resources-assist-preparation-2025-26-fafsa-cycle#.
FSA Updates FAQs for FVT/GE Regulations
On October 29, 2024, Federal Student Aid (FSA) released an Electronic Announcement (GE-24-02), which announced the availability of three updates to the Frequently Asked Questions (FAQs) Reporting Section on the Financial Value Transparency and Gainful Employment Topics Page.
A copy of the 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-october-29-2024.
ED Publishes NPRM to Authorize Debt Relief to Almost Eight Million Borrowers Experiencing Financial Hardship
On October 25, 2024, the Department of Education released a press release that announced the next step in its efforts to provide student debt relief by releasing a draft of a Notice of Proposed Rulemaking (NPRM) proposing loan forgiveness for approximately 8 million borrowers experiencing financial hardships. If these rules are finalized as proposed, the Secretary of Education could waive up to the entire outstanding balance of a student loan when the Department determines a financial hardship is likely to impair the borrower’s ability to fully repay the loan or render the costs of continued collection of the loan unjustified. The NPRM identifies fifteen indicators that may substantiate hardship. Such financial burdens could include unexpected medical bills, or high child-care costs, significant expenses related to caring for loved ones with chronic illnesses, or devastating economic circumstances from the impacts of a natural disaster. Also included as a factor is the “type and level of institution attended” and the rationale for this indicator is that “students who attended for-profit institutions are more likely to default.”
Secretary of Education Miguel Cardona said: “For far too long, our broken student loan system has made it too hard for borrowers experiencing heartbreaking and financially devastating hardships to access relief, and it’s not right. The rules proposed by the Biden-Harris Administration today would provide hope to millions of struggling Americans whose challenges may make them eligible for student debt relief. President Biden, Vice President Harris, and I will not stop fighting to deliver student loan debt relief and create a fairer, more just, and affordable student loan system for all borrowers.”
A copy of the press release is found at: https://www.ed.gov/about/news/press-release/biden-harris-administration-releases-proposed-rules-authorize-debt-relief.
The NPRM, which was published in the Federal Register on October 31, 2024, is found at:
https://www.federalregister.gov/documents/2024/10/31/2024-25067/student-debt-relief-based-on-hardship-for-the-william-d-ford-federal-direct-loan-program-direct. Comments are due December 2, 2024. The Department expects to finalize regulations in 2025.
Senator Bill Cassidy, M.D. (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, blasted the “newest Biden–Harris scheme” to transfer student debt onto American taxpayers. “Specifically, this new policy attempts to empower the Biden-Harris administration to unilaterally cancel student debt for borrowers who have faced a “hardship,” with no clear restrictions on what constitutes a hardship. This latest debt transfer is part of the administration’s new student loan proposals, which are estimated to cost taxpayers up to $750 billion.”
A copy of the Senator’s press release is found at:
https://www.help.senate.gov/ranking/newsroom/press/ranking-member-cassidy-blasts-latest-biden-harris-student-loan-scheme.
House Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC) released a statement that said: “Surprise, surprise, we’re eleven days out from an election, and the Biden-Harris administration announces another sham plan to shift responsibility for paying for college from those who took out loans to those who didn’t. The latest attempt to bribe voters is the hallmark of a desperate administration that’s squandered the chance to make meaningful, lasting reform when it comes to college costs. Biden, Harris, and Cardona ought to be ashamed of themselves.”
A copy of the Congresswoman’s press release is found at:
https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=412020.
ED Publishes Blog Saying Early Data Indicates More Students Poised to Receive Federal Financial Aid in the 2024-2025 Award Year
On October 22, 2024, Department of Education Under Secretary James Kvaal published a blog stating that early data indicates that 3 percent more students are poised to receive federal financial aid this year compared to last year at this time. Ten percent more students are on track to receive Pell Grants, including 3 percent more high school seniors. Under Secretary Kvaal said that the number of originations each institution makes has been a leading indicator of enrollment patterns among students who are likely to have received federal aid. He went onto say that the Department of Education data indicates that over the last six years, the vast majority of originations resulted in the disbursement of aid. Under Secretary Kvaal concluded that if this trend continues, and if disbursements track with enrollments as they have in the past, the agency expects more students to enroll in college with federal financial aid during the 2024-2025 award year than in the 2023-2024 award year.
A copy of the blog post is found at: https://sites.ed.gov/ous/2024/10/early-data-indicate-more-students-are-on-track-to-receive-federal-financial-aid-this-year/.
ED Announces Additional $4.5 Billion in Public Service Loan Forgiveness
On October 17, 2024, the Department of Education announced in a press release that it had approved about $4.5 billion in additional loan forgiveness for over 60,000 borrowers who work in public service. The relief is the result of significant fixes that the Department made to the Public Service Loan Forgiveness (PSLF) Programs. The total loan forgiveness approved by the Department is over $74 billion for over one million borrowers through PSLF.
Secretary of Education Miguel Cardona said: “Before President Biden and Vice President Harris entered the White House, the Public Service Loan Forgiveness Program was so riddled by dysfunction that just 7,000 Americans ever qualified and countless public servants were trapped making payments on debts that should have been forgiven.”
“From day one, the Biden-Harris administration made fixing this broken program a top priority, and today, I’m tremendously proud that over one million teachers, nurses, social workers, veterans, and other public servants have received life changing loan forgiveness.”
A copy of the press release is found at: https://www.ed.gov/about/news/press-release/biden-harris-administration-approves-additional-45-billion-student-debt.
ED Announces Launch of Second Beta Testing of 2025-2026 FAFSA
On October 15, 2024, the Department of Education released a press release to announce the launch of the second beta testing for the 2025-2026 FAFSA. The Department stated that during the first stage of testing, hundreds of students across the country successfully submitted their FAFSA form and were able to make corrections to the FAFSA form, the Department was able to process the FAFSA forms, and institutions were able to retrieve records sent to them. The Department indicated that it did not uncover any critical bugs and was able to improve the usability of the FAFSA form. Beta 2 testing includes 16 organizations, half of which are institutions of higher education that will ask their current students to submit the FAFSA form as returning students for the 2025-2026 cycle, which will mark the first time returning students will take part in beta testing. These institutions will also begin downloading and testing ISIRs to the extent their financial aid systems are able to do so.
A copy of the press release is found at: https://www.ed.gov/about/news/press-release/us-department-of-education-announces-successful-beta-1-testing-2025-26.
ED Releases Blog Post on Next Steps as Borrowers Return to Repayment
On October 9, 2024, the Department of Education released a blog post on next steps as borrowers return to repayment. The blog post stated that Congress voted to end the payment pause on federal student loans in June 2023, but the Department created a 12-month “on-ramp” to prevent the worst consequences of missed, late, or partial payments, including defaults. However, as the on-ramp has ended, many borrowers continue to struggle with student loan debts they cannot afford. The blog post stated that these borrowers should know that the Department is required to report late or missing payments for most borrowers to the national credit reporting agencies in January 2025, and their loans will enter default, which will trigger mandatory collections and other consequences in late 2025. “This means that for most borrowers, delinquent payments are not reported until early January at the soonest.”
The blog post identified some actions borrowers can take to help return them to repayment or manage monthly payments, which include:
• Applying for loan forgiveness.
• Considering changing repayment plans to reduce monthly payments.
• Borrowers who apply for an income-driven repayment (IDR) plan will first be placed into a processing forbearance for up to 60 days if their servicer needs additional time to process their application. This forbearance means that borrowers will not need to make payments, but their interest will accrue.
• Borrowers who have applied for SAVE or whose applications have not been processed within 60 days will then be moved from the processing forbearance into a general forbearance during which they are not required to make payments and interest does not accrue.
• Requesting forbearance or deferment if a student cannot afford any payments and do not qualify for “zero dollar” payments under IDR plans. Although interest may accrue, forbearance and deferment protect borrowers from penalties due to missed payments.
ED expects servicers to resume processing certain non-SAVE IDR applications that were paused following court orders.
A copy of the blog post is found out: https://blog.ed.gov/2024/10/whats-next-as-borrowers-return-to-repayment/.
GAO Releases New Report on Borrower Defense to Repayment
On October 24, 2024, the Government Accountability Office (GAO) released a new report titled, “Department of Education: Student Loan Relief in Cases of College Misconduct” (GAO-24-106530), which examined the Department of Education’s borrower defense to repayment process. The report found that that, as of April 30, 2024, the Department had discharged a cumulative total of $17.2 billion in federal student loans for 974,820 borrowers under borrower defense to repayment.
Based on regulations published in 1995 and 2016, the Department determines if a borrower qualifies for loan relief under two pathways. The first pathway requires the Department to evaluate individual borrower defense applications by following a multi-step process to determine if a borrower’s claim of a college’s misconduct is credible. The second pathway requires the Department to provide debt relief for a group of borrowers who attended a specific college, campus, or program during a specific time, even if they did not submit applications.
GAO reported that the Department had received a cumulative total of 888,430 borrower defense applications filed by individual borrowers as of April 30, 2024. All borrowers with approved applications received full discharge of outstanding loan(s) to attend the college and a refund of payments made to the Department. The Department approved group discharges for seven colleges as of April 30, 2024. GAO found for six of the seven colleges that the most common type of misconduct was misrepresentation of its graduates’ employment prospects, including placement rates or expected earnings.
A copy of the report is found at:
https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=412020.
GAO Releases Report Finding ED Communicated with Borrowers on Resuming Payments
On October 10, 2024, the Government Accountability Office (GAO) released a new report titled, “Federal Student Loans: How Education Has Communicated with Borrowers About Resuming Payments.” (GAO-25-107111) The report found that the Department of Education made significant outreach attempts to student loan borrowers ahead of the full return to repayments. The GAO found that it had been reaching out to borrowers since July 2023 about resuming student loan payments and the availability of temporary relief through emails, letters, text messages, its website, and social media platforms.
Other key findings of the GAO report include:
• Temporary relief for borrowers who miss payments. The Department instituted a 12-month “on-ramp” period from October 1, 2023 to September 30, 2024 during which borrowers could temporarily avoid negative consequences for late or missed payments. During the “on-ramp” period, loan servicers did not report borrowers to credit bureaus and their loans would not be considered delinquent if they missed payments.
• Temporary relief for borrowers with defaulted loans. The Department established “Fresh Start,” a temporary program available from April 6, 2022 to October 2, 2024 that allowed borrowers with defaulted loans who signed up for “Fresh Start” to get their loans out of default and restore them to good standing. Students were advised that if they did not sign up for the program, there would be negative effects, such as restarting collections on their loan(s).
• In June 2024, the Department began to implement a plan for communicating with borrowers about the end of both the temporary “on-ramp” period and “Fresh Start” program.
A copy of the GAO report is found at: https://www.gao.gov/products/gao-25-107111.
U.S. Court of Appeals for the Ninth Circuit Rules For-Profit Colleges Lack Standing to Challenge ED’s Sweet Settlement
On November 5, 2024, the U.S. Court of Appeals for the Ninth Circuit ruled that a group of for-profit colleges, Lincoln Educational Services Corporation, Everglades College, Inc., and American National University, which challenged a legal settlement canceling $6 billion in federal student loan debt, lacked standing to challenge the Sweet settlement from taking effect. The for-profit colleges argued that the Department of Education did not have the authority to cancel loans and that the Sweet settlement approved in November 2022 violated their due process rights and damaged the colleges’ reputation of the colleges included in the settlement. A district court judge rejected the colleges’ challenge in February 2023, and they appealed to the Ninth Circuit.
ACE Sends Letter to Secretary Cardona Raising Concerns with FVT/GE Reporting Requirement Deadline
On November 12, 2024, the American Council on Education (ACE), along with other higher education associations, sent a letter to Secretary of Education Miguel Cardona continuing to raise concerns with the reporting requirements under the financial value transparency (FVT) and gainful employment (GE) regulations. The letter said that the Department of Education announced a further delay in the reporting requirement deadline from October 1, 2024 to January 15, 2025, and the institutions are thankful for the additional time. However, institutions are still struggling to meet the new deadline. “For most institutions, meeting this deadline would result in errors simply due to the time constraints placed on them by the Department.
The letter identifies five key points, which render compliance a major challenge:
• The Department’s prior guidance to the FVT and GE Supplemental Training has been unclear and left many unanswered questions.
• Due to lack of clear guidance, institutions continue to be confused about the relationship between the completers lists and program- and student level reporting requirements.
• Although the Department has reserved the authority to add reporting requirements through a Federal Register notice in Section 668.408(a)(4), ED is encouraged not to utilize this authority because it will cause further confusion and create additional hurdles for institutions.
• Section 668.406 of the regulations share that institutions will receive their debt-to-earnings (D/E) rates; earnings premium measures; determination of whether a program is passing or failing these metrics; whether an institution needs to provide an acknowledgement to students for FVT or a warning to students for a GE program; and whether the program could become ineligible for Title IV funding from the Department. This will not be turned around in a matter of days but rather take several months (at a minimum) to conclude. ACE asks for further clarification on the Department’s anticipated process and timing is needed.
• The massive size and administrative complexity of the new reporting requirements pose challenges across higher education, particularly given that they primarily fall on staff most directly impacted by problems with the 2024-2025 FAFSA, the delay in the 2025-2026 FAFSA, and issues with the completers lists, though this multi-faceted regulation requires engagement by a wide range of campus offices. However, the challenges are most pronounced at under-resourced institutions where administrators commonly are responsible for multiple areas of operations and compliance. ACE urged ED to provide resources to all institutions that lack the capacity to complete on time to ensure compliance.
A copy of the letter is included in a press release found at:
https://www.aau.edu/key-issues/aau-associations-seek-clarification-regarding-fvtge-reporting-requirements