Thanks | Wins for Defrauded Students and Taxpayers, Other News

Thank You for Giving!
Important Wins for Defrauded Students and Taxpayers
TICAS Recommendations to President-elect Trump
Implementation of Gainful Employment Regulation
Average Student Debt for New College Grads Up 4% to $30,100
Voices from the FAFSA Frontlines Reveal Complexity and Costs of “Verification” Paperwork Affecting Millions of Low-Income Students

 

Thank You for Giving!

From all of us at TICAS, thanks so much to everyone who made a year-end donation to help support our work in 2017! We're incredibly grateful for your engagement and support as we fight to make financial aid work better for students and families and reduce the burden of student debt, especially for those with the greatest need.


Important Wins for Defrauded Students and Taxpayers

Debt relief for more defrauded students. The U.S. Department of Education announced progress on debt relief last week that will change the lives of thousands of defrauded students. One major step forward is that former students of the predatory American Career Institute in Massachusetts will get the full, automatic federal loan discharges they deserve. TICAS and our allies have led the call for automatic relief when the Department knows students have been defrauded, and this is the first time it’s been granted.  The Department has also started approving discharge applications from former ITT Technical Institute students, and it has approved more discharges for former Corinthian Colleges students based on fraudulent practices at those now-closed schools, as we have urged.

Final borrower defense and college accountability rules. The Department issued final regulations at the end of October that include huge wins for students and taxpayers. They make it much harder for schools that commit fraud to hide it, making them less likely to defraud in the first place. Schools receiving federal student aid will be severely limited in their ability to use pre-dispute arbitration clauses and class action waivers to evade accountability, and the final rules help ensure that students at closed schools know their options and that their loans are automatically discharged if they don’t continue their studies. Throughout the rulemaking process, TICAS performed critical analyses, spearheaded coalition comments and letters, and helped lead an outreach campaign that resulted in more than 45,000 people across the country expressing support for a strong final rule.

Restored Pell Grant eligibility. The Department also announced that it is resetting Pell Grant eligibility for students at schools that closed before they completed their studies, a need first identified by TICAS that garnered influential bipartisan support. Those helped will include more than 28,000 Pell Grant recipients affected by the closures of ITT Technical Institutes and Corinthian Colleges.

More defrauded students need relief, and new rules must be implemented to help prevent more fraud.  Thousands of former students of Corinthian, ITT, and other predatory schools are still struggling with debts that should be cancelled. We have called on the incoming Trump Administration to promptly discharge their federal loans and implement the new borrower defense and college accountability regulations. There has always been broad and bipartisan support for providing relief for defrauded students. We commend Senate Republicans for not targeting these regulations for repeal under the Congressional Review Act and urge House leadership to do the same.  Preventing waste, fraud, and abuse of taxpayer dollars and protecting students and veterans should remain bipartisan issues.

Read our statement on the Department’s latest loan relief announcement

Read our statement on the final borrower defense and college accountability rules


TICAS Recommendations to President-elect Trump

Last month TICAS sent a memo to President-elect Donald Trump laying out our recommendations for addressing college affordability and student debt, issues of concern broadly shared by citizens and policymakers on both sides of the aisle.

Although much is unknown about the incoming administration’s higher education agenda, the president-elect has called for the following reforms, and our memo includes specific ways his administration can achieve these objectives:

  • Streamline the federal student loan repayment plans and improve income-driven repayment;
  • Stop the government profits from student loans;
  • Reduce the influence of Wall Street and other wealthy special interests; and
  • Establish effective accountability from colleges that receive federal funding.

The memo also includes recommendations on issues where there is broad bipartisan support for change, including improving student loan counseling and consumer information on college costs and outcomes so students and families can make informed decisions about where to enroll.

Read the memo


Implementation of Gainful Employment Regulation

Last week, the Department of Education released the first official debt-to-earnings rates for career education programs under the ‘gainful employment’ regulation, as well as a new disclosure template that will make it easier for students to tell which career education programs deliver and which don’t.  All career education programs at public, for-profit, and non-profit colleges will have to clearly disclose the earnings of their graduates and whether programs meet state licensure requirements as well as their cost, typical debt levels, and completion and job placement rates. Failing programs that are consistently leaving graduates with debts they can’t repay will now have to warn current and prospective students that the program will lose eligibility for aid next year if it doesn’t improve.  

While the for-profit college industry and its allies in Congress continue to call for delay or repeal of the gainful employment regulation, the data released last week underscore the need for the regulation and its continued implementation to protect both students and taxpayers.

Read our statement


Average Student Debt for New College Grads Up 4% to $30,100

TICAS’ 11th annual report on the debt of new college graduates, Student Debt & the Class of 2015, found debt continues to rise. At public and nonprofit colleges in 2015, 7 in 10 graduating seniors had loans. Their average debt was $30,100: up 4% compared to the class of 2014. About a fifth of 2015 graduates’ debt was in private (nonfederal) loans, which are typically more costly and lack the consumer protections and repayment options that come with federal loans. Our findings have been cited in hundreds of news stories around the country! Here are a few samples: The New York Times, CNN Money, Chicago Tribune, Washington Post, Atlanta Journal-Constitution, Wall Street Journal, and Cleveland Plain Dealer.

Read the report and press release
View interactive map with debt levels for all 50 states and more than 1,000 individual colleges
 

Voices from the FAFSA Frontlines Reveal Complexity and Costs of “Verification” Paperwork Affecting Millions of Low-Income Students

In 2014-15, the U.S. Department of Education required colleges to ask 5.3 million students – more than 1 in 4 aid applicants – for additional “verification” paperwork after they filed the FAFSA. Our latest report, On the Sidelines of Simplification: Stories of Navigating the FAFSA Verification Process, exposes how this often-overlooked part of the federal student aid process delays aid and enrollment for low-income students, consuming the time of college access and financial aid professionals and frustrating their efforts to help students afford and succeed in college.

TICAS collaborated with the National Association of Financial Aid Administrators (NASFAA) and National College Access Network (NCAN) to conduct focus groups and survey aid administrators about the impact of verification. Of more than 600 aid administrators who responded to the survey, 80% agree that verification is hard for students and families to navigate, and 71% say it places unnecessary burdens on low-income students. The report also features the direct voices and experiences of NCAN and NASFAA members across the country, such as:

It is a barrier to education. I can attest to the fact that some students never start school because they are selected [for verification] and don’t know how much aid they have, and think that they can’t afford school.  – Financial Aid Administrator

They get to a point where they have to make a payment and they don’t have the money to make a payment and their financial aid isn’t processed yet, and so they end up being dropped from their courses. – College Access Professional

“With broad bipartisan interest in FAFSA simplification, understanding the challenges verification creates for both schools and students today is essential for policymakers to avoid creating unintended roadblocks tomorrow,” said Jessica Thompson, TICAS’ policy and research director. TICAS released the report at a Capitol Hill event co-hosted with NCAN and NASFAA and attended by congressional staff from both sides of the aisle. We’re grateful to the expert panelists, many of whom work directly with low-income students and families through this final step of the FAFSA process: Zenia Henderson (CollegeTracks), Kevin Jensen (SUNY Oneonta), Laura Keane (uAspire), Stephen Payne (NASFAA), Carrie Warick (NCAN), and Kyle Williams (College Access Foundation). The report and event were made possible by a grant from the Federal Financial Aid Advocacy Fund.

Read the report and press release