States and Feds Battle Over Who Regulates Student Loan Servicers

DC Shuttle …

States Move Legislation on Student Loan Servicers. States have continued to move legislation regarding student loan servicing, despite the fact that the Trump administration says it should be handled by the federal government, and not state governments. The administration sought to put an end to states’ regulation of the companies that collect federal student loans. U.S. Education Secretary Betsy DeVos in March issued guidance saying that federal law preempts efforts by states to regulate the companies. The Massachusetts state Senate earlier this month passed legislation that would more tightly regulate student loan servicers operating in the state. The bill, sponsored by Democratic state Sen. Eric Lesser, a former Obama White House aide, won Republican support and passed on a 36 to 0 vote. A companion bill is awaiting action in the Massachusetts House. In Washington state, Gov. Jay Inslee, a Democrat, signed into law a bill to regulate student loan servicers operating in the state. The bill was backed by Attorney General Bob Ferguson, who is suing Navient, alleging unfair and deceptive practices. State lawmakers in Colorado last week introduced legislation for the first time to tighten oversight of student loan servicers. A Colorado House panel on Thursday held a hearing on the bill, which is being sponsored by two Democratic lawmakers but also has the support of the state’s Republican attorney general, Cynthia Coffman.

Hearing on Education Budget. The House Appropriations Committee held a hearing to discuss fiscal 2019 spending on issues including education. The committee heard from Mamie Voight, vice president of policy research at the Institute for Higher Education Policy, who urged lawmakers to protect and strengthen the Pell Grant by increasing the maximum amount by $175 and indexing it to inflation. Voight also spoke in favor of funding for year-round Pell Grants and against reducing funding from the programs’ reserves. The committee also heard from Nicholas Matthews of the National Council for Community and Education Partnerships.  He encouraged the committee to fund the Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP) grant program.

Senate Will Vote on Deputy Secretary of Education. The Senate reached an agreement on the debate over President Trump’s nominee to be the deputy secretary at the Education Department. Majority Leader Mitch McConnell (R-Ky) won unanimous consent from the Senate to set 10 hours of debate on the nomination of Mick Zais to be deputy secretary of education. The agreement calls for 10 hours of debate on Zais’ nomination “at a time to be determined by the Majority Leader in consultation with the Democratic leader.” Zais, a retired Army brigadier general and former superintendent of South Carolina schools, won approval from the Senate Committee on Health, Education, Labor and Pensions (HELP) on a voice vote in January. The White House first announced the nomination of Zais in October.

Education Department to Release For-Profit Accreditor Assessment. The U.S. Education Department is planning to publicly release a report outlining the initial findings made by career department staff last month as they considered whether to reinstate the Accrediting Council of Independent Colleges and Schools (ACICS). The assessment will be released “in full” under the Freedom of Information Act. Secretary DeVos restored the federal powers of the Accrediting Council of Independent Colleges and Schools last month in response to a federal judge’s ruling that the Obama administration illegally failed to consider relevant evidence in its 2016 decision to terminate the accreditor. DeVos has said she’ll make a decision on the fate of ACICS after the accreditor submits additional materials later this spring. The draft staff analysis of ACICS will show the extent to which career department officials believed that the accreditor met federal standards as of last month.

Report Suggests Test-Optional Admissions Increase Minority Enrollment. Colleges with test-optional admissions policies saw a rise in applications from underrepresented minorities, and two-thirds saw that rise in applications lead to a boost in enrollment for those students, according to a new report by the National Association for College Admission Counseling.

Connecticut Community College Consolidation Plan Rejected by Accreditor. The New England Association of Schools and Colleges, the accrediting agency known as NEASC, rejected a plan to consolidate administrative functions at Connecticut’s community colleges to save millions of dollars, raising the possibility of higher tuition or closing a campus, Hartford Business reports.

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 April 30, 2018. For more information, please visit:


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