Another Major Servicer of Federal Student Loans Quits the Business

By The New England Council

DC Shuttle …

Hearings & Markups of Interest

(Due to current limited access to the U.S. Capitol complex, the general public is encouraged to view these hearings via live stream.)

The U.S. House Education and Labor Committee will hold a hearing on Homecoming: The Historical Roots and Continued Contributions of HBCUs on Wednesday, Oct. 6 at 12 p.m.

The Senate Health, Education, Labor & Pensions Committee will hold a hearing on the nominations of Lisa Gomez to be the assistant secretary for employee benefits security at the Department of Labor, and Jose Javier Rodriguez to be the assistant secretary for employment and training at the Department of Labor on Thursday, Oct. 7 at 10 a.m.

Navient Ends Federal Student Loan Servicing, Transfers 5.6 Million Accounts. One of the most prominent student loan service companies, Navient, transferred 5.6 million accounts to Maximus. The Washington Post reports that lawmakers and consumer groups have accused loan service companies of mishandling accounts. Federal Student Aid (FSA) Chief Operating Officer Rich Cordray stated that the department has been closely watching the negotiations between the two loan servicing companies. He said, “We remain committed to making sure that our federal student loan servicing agreements provide more accountability, meaningful performance measures, and better service for borrowers. FSA looks forward to working with servicers committed to fulfilling these requirements as they do the important work to service more than 40 million federal student loans.” Navient is the second major federal student loan servicer recently to ask to get out of the business after FedLoan said in July that it would exit, the New York Times reports.

NLRB States College Athletes are Employees. National Labor Relations Board General Counsel Jennifer Abruzzo issued a memo on the “Employee Status of Players at Academic Institutes.” The memo stated that “student-athletes” would be considered employees under the National Labor Relations Act, giving them the ability to unionize, among other protections. “Players at Academic Institutions perform services for institutions in return for compensation and subject to their control. Thus, the broad language of Section 2(3) of the Act, the policies underlying the NLRA, Board law, and the common law fully support the conclusion that certain Players at Academic Institutions are statutory employees, who have the right to act collectively to improve their terms and conditions of employment,” stated Abruzzo. She also criticized the term “student-athletes” stating that it “misclassifies players at academic institutes” and removed their capacity as employees.

New Report Analyzes Cost to States of Free Community College. America College Promise, the U.S. House Education and Labor Committee’s proposal that would allow for free community college, was recently analyzed by SHEEO in a new report. On average, states will need to increase investment in higher education by 12% in order to opt in to the program, according to a summary by Inside Higher Ed. The results concluded that as many as 12 states would have to increase their funding of the project by 15%, seven states by 25%, four, including New Hampshire, by over 40%, and Vermont by 142%, by the start of the 2023-24 school year. The analysis also estimated that 985 state owned institutions, which serve 9.4 million students across all states, and 13 institutions within the U.S. territories, serving 17,000 students, would be eligible for the program. The SHEEO report outlined multiple findings when looking at the data, which analyzed the effectiveness and financial draw of the program.

Preserving DACA. The Biden administration released a proposed rule that would re-create the Deferred Action for Childhood Arrivals (DACA) program through a formal regulation. The administration has been fighting to preserve DACA in an effort to fight the ruling in July that declared the program unlawful. The President’s Alliance states that there are probably around 427,345 undocumented students in higher education and fewer than half are eligible for DACA. The rule proposal outlined the need for a legislative solution to combat a judge’s ruling in July.

Senate Committee Holds Hearing on School Reopening During Covid-19. The U.S. Senate Committee on Health, Education, Labor & Pensions had a hearing to check on the progress of reopening schools. The committee checked in on the most advanced forms of dealing with the pandemic within the classroom. The hearing discussed the effectiveness of the “test-to-stay” approach, which lets asymptomatic students remain in school with a negative Covid test rather than quarantine if in close contact. Sen. Susan Collins (R-Maine) stated, “I think all of us can agree that students suffer when they’re not in school. In order to avoid another year of learning loss, emotional turmoil and behavioral problems, some school districts are implementing a test-to-stay approach … If our goal is to keep schools open, it seems to me that we should be looking at the science. Yet, despite the evidence, CDC [the Centers fro Disease Control] has said that at this time, they do not recommend or endorse a test-to-stay program, even though the consequences are that thousands of students in this country are once again not in school because of quarantine.”

We publish the DC Shuttle each week Congress is in session featuring higher ed news from Washington collected by the New England Council, of which NEBHE is a member. This edition is drawn from the Higher Education Update in the Council’s Weekly Washington Report of Oct. 4, 2021. For more information, please visit:


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