Last week, a broad set of speakers including students, student loan borrowers, advocates, institutional leaders, and lobbyists provided their thoughts on the ambitious set of priorities the U.S. Department of Education (ED) proposed to include as part of its upcoming negotiated rulemaking (neg reg) process. Through six open comment periods, ED officials heard a full range of opinions on issues from gainful employment and borrower defense to the need to reform income-driven repayment and repair the broken Public Service Loan Forgiveness program.
On Monday, Acting Assistant Secretary for Postsecondary Education Michelle Asha Cooper framed the neg reg process by noting, “one of the Department’s primary responsibilities is to serve students and borrowers. To do this well, it means we must continuously examine our policies and our practices associated with college access, retention, completion, and a host of affordability issues, including student loan debt repayment and default.” This focus on students, borrowers, and advancing educational equity framed all three days of comments.
TICAS Vice President Kate Tromble—one of the earliest scheduled speakers—set the tone, suggesting equity required ED to address three top priorities for action as soon as possible:
- Design and implement an effective gainful employment rule.
- Overhaul the disastrous 2019 borrower defense to repayment rule while creating an efficient and fair process that will help clear the backlog of claims from defrauded borrowers.
- Fix problems with income-driven repayment.
As the week went on, a growing list of speakers made similar comments – echoing Dr. Cooper on the need for more student voices at the table – including advocates for student veterans. All too often, for-profit colleges see student veterans and their GI Bill benefits as “dollar signs in uniform.” That’s why veterans and their advocates spoke in favor of stronger accountability measures to rein in the worst abuses in the sector. They called on the Department to move forward as quickly as possible on closing the 90/10 loophole that incentivizes for-profit colleges to aggressively recruit veterans, draw down their GI Bill benefits, and leave them with credentials that are unlikely to meet the lofty expectations shared in promotional materials.
Borrowers defrauded by for-profit colleges as long as 10 years ago – some of whom are members of the class action Sweet case – as well as current students, veterans, veteran-serving organizations, and other advocates also made strong arguments for a revised borrower defense rule. The Higher Education Act includes this provision to clear student loan balances of borrowers victimized by predatory, fraudulent institutions. The previous administration revised the rule in ways that make it virtually impossible for borrowers to receive full relief. Now ED has a chance to put a working rule in place that provides a pathway to full relief under the law.
The Department can do so while simultaneously addressing the tens of thousands of claims that have piled up on its desk, with some defrauded borrowers waiting years for decisions on their claims.
Other speakers noted significant problems with income-driven repayment (IDR) and the Public Service Loan Forgiveness (PSLF) program. Borrowers report challenges enrolling and staying enrolled in IDR and PSLF. Additional problems with IDR include setting truly affordable monthly payments; questionable conduct among servicers; and a lack of real relief after a reasonable number of payments. Many public service employees have experienced frustration navigating the complexities of PSLF, which should enable qualifying borrowers to discharge the remainder of their eligible loans after making 120 monthly payments.
Numerous speakers urged ED officials to address key issues not mentioned in the original neg reg notice. Among these issues, state authorization of distance learning and accreditation emerged as the most urgent. On Wednesday, Dr. Marshall Anthony, Jr. of the Center for American Progress recommended more rigorous recognition and periodic review processes; increasing expectations for how accrediting agencies approve, review, and monitor colleges –including when they change owners or tax status; and requiring accreditors to act sooner when identifying problems at postsecondary institutions.
Predictably, for-profit college leaders and lobbyists used the comment periods to claim that regulations like gainful employment and borrower defense unfairly target their sector and their business models. But the facts remained stubborn. The for-profit college sector has a history that is now well-documented in cases brought by bipartisan groups of state attorneys general and other federal consumer regulators of engaging in deceptive and aggressive recruiting tactics that lure students into their programs. When previously implemented, the gainful employment rule successfully led to the closure of problematic for-profit programs, protecting student and taxpayer interests.
As ED considers the input received throughout last week, it should also heed the advice of speakers on topics not to include in its negotiated rulemaking process. For example, numerous advocates – including alumni of higher education in prison programs – urged the Department to move forward with implementation of restoring Pell Grant eligibility for incarcerated students as soon as possible.
Once formal negotiations get underway later this year, the quality of outcomes from the upcoming neg reg process will depend on the people who do the negotiating. As numerous speakers noted throughout the week, the negotiations must include substantial – and not just token – representation of students and borrowers most affected by the resulting regulations. Student and borrower negotiators must reflect the diverse population of today’s students, including students with disabilities, student veterans, and Black and Latinx borrowers who disproportionately shoulder the heaviest student debt burdens.
The Education Department is responsible for advancing and protecting the interests of students, especially in ways that tackle the inequities persistent in higher education. Negotiated rulemaking is an important opportunity to course-correct across many policy areas and establish fair, functioning rules to help ensure more students can realize their educational dreams.