DC Shuttle …
DeVos Testifies Over Department’s New Borrower Defense Rules. U.S. Education Secretary Betsy DeVos testified at a House Education and Labor Committee hearing to answer questions about her handling of a program meant to provide debt relief to federal student loan borrowers defrauded by for-profit colleges. The secretary’s appearance came days after the Education Department revealed its updated formula for processing debt-relief claims made under the statue known as “borrower defense to repayment.” The most significant change involves using a sliding scale based on a borrower’s wages to determine loan forgiveness. While the House Republicans defended DeVos’s authority to provide partial loan forgiveness, Democrats argued the new formula to be inherently unethical and unfair to the defrauded borrowers. DeVos continued to reiterate that she had inherited “a broken system from the Obama administration” that caused her department to design borrower defense rules and loan relief from the ground up. However, memos reported by NPR this week showed that the past administration’s education officials had recommended former Corinthian Colleges and ITT Tech students, who make up the majority of defrauded students applying for loan relief, receive total loan relief as the schools provided no substantive value to the students. Read more in The Washington Post and Politico.
Congress Finalizes Bill to Restore Funding for Minority Serving Institutions, Streamline FAFSA. The House and Senate both passed a bipartisan amended bill to permanently restore $255 million of funding to minority serving institutions (MSIs) and simplify the FAFSA. Last week, the Senate introduced an amendment to the FUTURE Act that proposed paying for the MSI funding through savings from simplifying the FAFSA and reducing paperwork for borrowers on income-driven repayment plans. After working with Senate HELP Committee Chair Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA), the House passed changes to the bill on a 319 to 96 vote, which was followed by a Senate passage under unanimous consent. The legislation will now head to President Trump, who indicated that he was prepared to sign the previous version of the bill that passed the Senate last week. Read more in The New York Times and Education Dive.
FTC Reaches $191M Settlement with University of Phoenix in Marketing Lawsuit. The University of Phoenix, and its parent company Apollo Education Group, agreed to a $191 million settlement in a lawsuit brought by the Federal Trade Commission (FTC) accusing the for-profit school of misleading students with false advertising. The lawsuit alleged that the university created deceptive ads that led students to believe major companies worked with the school to create job opportunities for graduates. As a part of the settlement, the university will pay the FTC $50 million and cancel $141 million in student debt. Read more in Education Dive and The Washington Post.
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. 16, 2019. For more information, please visit: www.newenglandcouncil.com.
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