1. Title IV of the HEA Regulatory Developments and Emerging Issues
Education: The New Federalism! Spring Forum 2017
May 10-12, 2017
Title IV of the HEA Regulatory Developments and Emerging Issues
Karen Laverdiere, Esq.

2. Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Agenda
Gainful Employment (Program Integrity Rules)
Cash Management Regulations
Experimental Sites
Student Loans
Application Process
Borrower Defenses
State Authorization
Student Loan Servicing
Perkins Loan Program
Emerging Issues
Title IV Funding
Questions
FWS
SEOG
Pell Grants
Funding
Dual Enrollment
Year Round Pell
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3. Gainful Employment: Background/History
Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Gainful Employment: Background/History
Initially proposed in 2010
Most requirements vacated June 30, 2012 by US District Court; left limited disclosure requirements in tact
Final regulations published 10/31/14; included
Reporting for prior years by 7/31/15
New, expanded, disclosure requirements 1/1/17
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4. Gainful Employment: Recent Developments/Future of GE
Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Gainful Employment: Recent Developments/Future of GE
Delayed expanded disclosure requirements from January 2017 to April 2017
New administration further delayed new disclosure requirements to July 1, 2017
Date to appeal the GE debt-to-earnings ratio also extended to July 1, 2017
Additional time provided for Department to review all of the GE regulations and their implementation
Unclear as to what position new administration will take
May see rollback of some or all of the GE requirements
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5. Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Student Loans
Borrower defenses have been in regulation since 1995 – but rarely used, old definition:
Any “act or omission of the school attended by the student that would give rise to a cause of action against the school under applicable State law.’’
New definition:
A defense to repayment of amounts owed to the Secretary on a Direct Loan, in whole or in part; and a right to recover amounts previously collected by the Secretary on the Direct Loan, in whole or in part.”
Borrower Defenses
Repayment
Loan Servicing
Perkins Loan Program
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6. Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Student Loans
Prior administration directive:
Barred student loan guaranty agencies (GAs) from adding on fees to defaulted loans. Allowed borrower to get out of default and rehabilitate their credit.
Current administration:
Rescinded directive and GAs are now allowed to assess up to 16% in fees on student loans, that may or may not be in relation to actual cost
Borrower Defenses
Repayment
Loan Servicing
Perkins Loan Program
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7. Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Student Loans
Current administration withdrew three policy memos
Intent was to create one loan servicing platform for all students to use, regardless of servicer
Also called for expanded oversight of loan servicers
These memos focused on improving student loan servicing for borrowers, and changed the way ED determines which third-party servicers would participate in a new servicing platform
Removes certain consumer protections
Borrower Defenses
Repayment
Loan Servicing
Perkins Loan Program
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8. Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Student Loans
Current Perkins Loan program extended with the Federal Perkins Loan Program Extension (FPLPE) Act of 2015
Prior to this extension, there were grandfathering rules which allowed schools to make loans to certain students after 9/30/2015 through 2020
Extended the authority to make loans until 9/30/2017, but removed grandfathering provision
FPLPE added additional disclosures and awarding requirements
Prevents any further extensions
Borrower Defenses
Repayment
Loan Servicing
Perkins Loan Program
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9. Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Title IV Funding
In general, looking at a decrease in overall funding for FY2018 and going forward
Financial aid is discretionary funding and is subject to funding each year
Current Pell Grant surplus is $10.8 billion; seeks to cut $3.9 billion of the surplus
Budget eliminates SEOG funding and calls for significant cuts to Federal Work Study along with directing funds to students who significantly need funding
Proposed expanding Pell eligibility to year around
Proposed expanding Pell to dual enrollment students
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10. Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Cash Management
Recent Developments
Allows students to freely choose how they want to receive their financial aid funds
Are provided neutral and objective information regarding payment options
Removes excessive fees charged to access funds, through debit and pre-paid cards; ensure fee-free access to funds
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11. State Authorization: Previous
Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
State Authorization: Previous
State authorization is a longstanding requirement
Requires institutions to be authorized in the state in which they are located as a condition for eligibility to receive Title IV Federal student aid.  There was no such requirement for online programs
While all higher education institutions must have state authorization in the states in which they are physically located, there were no federal regulations for distance education providers in states where the institutions are not located
Previously regulated on this in 2010, but federal appeals court struck down the distance education portion in 2011
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12. State Authorization: Current
Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
State Authorization: Current
Final regulations published in December 2016 clarify state authorization requirements for institutions offering distance education programs; effective July 1, 2018
Now, institutions offering distance education programs in other states, must be authorized by that state if the state requires it
Also requires the school to document the complaint process for each state regarding distance education programs
Requires certain disclosures
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13. Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Experimental Sites
Experimental sites authority gives ED the ability to grant waivers from federal statutory requirements to study the effect of potential policies 
More than a dozen implemented between 2011 and 2017
Trump administration has ended four of these experiments:
Unsubsidized loan limit experiment
Students with bachelor’s degrees allowed to enroll in career and vocational program and receive Pell
Pell eligibility for programs shorter than the statutorty length
FWS program allowing payment of FWS funds to students who serve as peer counselors for high school students
New administration may implement additional experiements
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14. Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Application Process
Implemented as a result of a September 13, 2017 Presidential Executive Order Beginning with the year, FAFSA began using prior-prior-year tax information; 2015 income information used for two years Allowed for expanded use of the IRS Data Retrieval Tool Created one-time issues regarding conflicting information Allowed ED to move up FAFSA filing date to begin on October 1 Allows schools to communicate with potential students earlier
Prior-Prior-Year
IRS Data Retrieval Tool
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15. Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Application Process
Moving the FAFSA filing date and base year income allowed for more expanded use of the IRS Data Retrieval Tool Allows parents/students to transfer income information directly from the IRS, decreasing the number of students selected for verification In March, the tool was disabled due to security concerns by the IRS and Department of Education Likely will not be available until October 2017, for the FAFSA
Prior-Prior-Year
IRS Data Retrieval Tool
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16. Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Emerging Issues
Presidential order regarding reducing regulations (1/30/17)
Policy of alleviating unnecessary regulatory burdens
When an agency proposes a new regulation, it must identify two regulations to be repealed
Any new incremental cost of a new regulations, must be offset by the reduction of cost of the two repealed regulations
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17. Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Resources
USDE Dear Colleague Letter GEN /30/2015
USDE GE Electronic Announcement 39, 101, 103, 105
Federal Register Vol 81 No 116 Page 39330
USDE Dear Colleague Letter GEN /17/16
USDE Dear Colleague Letter GEN /30/15
USDE Dear Colleague Letter GEN /17/11
Federal Register Vol 81 No 243 Page 92232
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18. Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Questions?
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19. Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Disclaimer
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