Canceling Debt for Students Whose Colleges Shut Down

By The New England Council

DC Shuttle …

Education Department Announces Cancellation of Debt for Students of Closed Colleges. The U.S. Department of Education announced that it plans to expunge the federal student loans of borrowers whose colleges closed while they were attending. The department said it will cancel the loans of about 15,000 borrowers who qualified for loan discharges, but who haven’t yet applied. Those student loans total approximately $150 million. Education Secretary Betsy DeVos had fought to stop the practice, which is included in Obama-era “borrower defense to repayment” regulations. A federal judge in September ruled that DeVos’s efforts to stop the 2016 regulations from taking effect were illegal. Department officials said they would begin notifying borrowers by email. Earlier in the week, Senators Dianne Feinstein (D-CA) and Kamala Harris (D-CA) asked the Education Department to send “closed school” discharge applications to affected students. Read the letter here.

Farm Bill Includes HBCU Provisions. The farm bill passed by Congress last week included some provisions affecting the finances of historically black colleges and universities (HBCUs), with the intention that they will see millions in new funding. The bill reverses an old provision that mandated 1890 land-grant universities, including HBCUs, could only carry over a small chunk of their extension funding if it wasn’t used in a calendar year. The schools have been able to carry over only 20% of the funding. The rule didn’t apply to predominantly white land-grants. The bill also includes a provision encouraging states to match funding. States are required to match federal funding for land-grant universities, but many HBCUs have not gotten full funding. The bill requires states to report to Congress how much funding they’re providing to both historically black land-grants and their predominantly white peers. The bill also provides $10 million a year to establish research centers on at least three HBCU campuses with specific focuses, such as food security, with the secretary of agriculture to choose the campuses. The bill also includes about $40 million in mandatory funding for new scholarships at each of the 1890 land-grant universities, meaning each will have about $2 million in new funding for scholarships over the next five years.

Legislation Introduced to Address GI Bill Payment Issues. A bipartisan group of senators introduced legislation that would address ongoing problems at the Department of Veterans Affairs (VA)  that have underpaid some student veterans their GI Bill benefits. The bill would require the VA to create a “Tiger Team” of specialists at the agency who would come up with a plan to fix the problem. The plan would be submitted to Congress and the VA would be required to implement it. The legislation is sponsored by Senators John Boozman (R-AK), Brian Schatz (D-HI), Jon Tester (D-MT), Richard Blumenthal (D-CT), Thom Tillis (R-NC), and Jerry Moran (R-KA). The senators said they may try to pass the bill this year. Representatives Tulsi Gabbard (D-HI) and Brian Mast (R-FL) joined fellow military veterans at a Capitol Hill press conference called by the Iraq and Afghanistan Veterans of America group to discuss the issue. At the same event, attendees said they were hopeful that as early as this week, the Senate would take up legislation, S. 3130, co-sponsored by Senators Elizabeth Warren (D-MA) and John Boozman (R-AK) that would prohibit colleges from collecting a late fee or requiring GI Bill users to take out additional loans because of delayed payments. Language from the bill was included in bipartisan veteran’s legislation, S. 2248, approved by the House last Monday. Also last week, Sen. Mike Enzi (R-WY), chair of the Senate Budget Committee, wrote a letter to VA Secretary Robert Wilkie asking how much his agency expects to spend to change how it calculates payments.

Education Department and CFPB Criticized for Unreleased Report. The Consumer Financial Protection Bureau (CFPB) report examining the fees students charged by financial service providers that partner with colleges has come under scrutiny. While the CFPB did the analysis months ago, the Hill reports that the Education Department did not release it until forced to under the Freedom of Information Act. The report found that some students pay higher fees for accounts created through agreements with colleges.

Democrats Criticize Decision on For-Profit College Accreditor. A group of congressional Democrats led by Sen. Elizabeth Warren (D-MA) wrote a letter demanding details about a report that led Education Secretary DeVos to reinstate a controversial for-profit college accreditor. The 10-page letter outlines Democrats’ findings from an examination of endorsements that the Trump administration said other accrediting organizations made in favor of the Accrediting Council for Independent Colleges and Schools. They asked the department to turn over a wide-ranging trove of documents relating to its decision. Read more in Education Dive and the Framingham Source.

We publish the DC Shuttle each week 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 Dec. 17, 2018. For more information, please visit:


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