By Owen Daugherty and Hugh T. Ferguson, NASFAA Staff Reporters
During the final week’s session of the Department of Education’s (ED) negotiated rulemaking, the committee dove into its updated agenda, with facilitators outlining that members would be asked to participate in 12 consensus checks throughout the week on issues ranging from loan discharge to Public Service Loan Forgiveness (PSLF).
During Monday’s session the committee went through the logistics of consensus checks, in which facilitators provided details as to how the committee would proceed with the week’s discussion.
Facilitators reiterated that the intent of the committee was to engage in good faith and strive for group problem-solving — and that instead of previous temperature checks, this week’s consensus checks would only be met if no thumbs were recorded as down, which would indicate that a member had serious reservations.
If any member recorded an objectionable reservation to ED’s revised language, they would then be required to explain their position as well as highlight what changes to the language could garner their endorsement.
Kicking off the week’s issue papers was the total and permanent disability issue paper. ED highlighted that the paper’s major substantive change concerned language that includes “disability onset date at least five years prior to application.” On this issue, ED also indicated that they had not confirmed whether auto-discharge was available.
The paper also had a number of conforming changes related to the Perkins Loan program, as well as Federal Family Education Loans (FFEL) and some minor technical tweaks to certification.
Throughout the discussion of the issue paper, committee members largely thanked ED for the changes and highlighted a few minor technical and style corrections that were addressed.
“I think the changes that the department has made in the [total and permanent disability issue paper] are going to do huge things for the borrowers that we’ve worked with,” said Persis Yu, a negotiator representing legal assistance organizations that serve students and borrowers. “In particular, eliminating the monitoring period, which I realize is a week one issue, but was a very big barrier for many of the people to actually see the relief.”
Yu also thanked ED for incorporating more technical changes, including the allowance of signatures by a wider range of medical professionals.
“That is going to have a huge impact,” Yu said. “We are very appreciative of that along with the automation because as with all things just carrying forward the themes automating as much as possible is hugely important.”
Ultimately, members reached consensus on the total and permanent disability discharge issue paper.
The committee then entered into a caucus meeting before transitioning to its second agenda item: the closed school discharge issue paper.
ED detailed substantive changes to the paper, which has significant deletions in the text having to do with concerns raised about the availability of closed school discharge for borrowers who enroll in "comparable programs" at another school. Per the proposed text, the only condition remaining that would bar a borrower from receiving a closed school discharge is completion of a teach-out agreement.
Jessica Barry of The Modern College of Design in Kettering, Ohio, representing proprietary institutions, had significant concerns with the definition of a closed school and expressed concern that the discontinuation of programs could then be damaging to smaller institutions that only offer a limited number of programs.
Following a lunch break, the committee returned and proceeded to take a consensus vote on the closed school discharge issue paper. Everyone was in agreement on the topic except for Barry, meaning consensus was not reached. Mediators indicated they would revisit this topic at the end of negotiations, if time permits.
Josh Rovenger, a negotiator on behalf of the legal assistance organizations that aid borrowers, urged ED to treat this issue as one with broad support from the committee aside from the for-profit sector, and urged ED to craft final regulatory language similar to what the committee voted on.
The committee then briefly discussed the issue paper that focuses on eliminating interest capitalization. There was broad agreement on this topic in both the last session of rulemaking in November and on Monday. With no concerns raised regarding the language, the committee moved straight to a vote, which yielded no dissent among negotiators that non-statutory interest capitalization should be eliminated.
The committee then moved to the issue paper on false certification discharge. Jennifer Hong, a negotiator on behalf of the department, reminded the committee that there was previous agreement on the proposed rule.
However, Rovenger said his legal aid constituency held concerns that the proposed language regarding group discharges was not included in the final rule and asked for language that allows borrowers to submit group applications for debt relief to be included.
Rovenger also raised a concern with language putting the onus on a borrower when they enroll to report that they don’t have a high school diploma or the equivalent, arguing that many may not know they need a high school diploma to be eligible for federal student loans. Instead, it should be the school's responsibility to check eligibility, he argued.
Daniel Barkowitz, director of financial aid at Valencia College and a NASFAA member, pushed back, saying that changing the language would then place the onus on the financial aid office to collect proof of high school graduation, in turn setting up the potential for conflicting guidance after ED announced that institutions are no longer required to verify high school completion for financial aid purposes.
Regarding Rovenger’s concerns over group discharge, Hong said the language as written does not prohibit group discharge and that they can include additional guidance on how students can go through the process of a group discharge.
When it came time to take a consensus vote on false certification discharge, Rovenger asked for it to be delayed, again urging for language around group discharge to be included. He said without the regulatory language in the final rule, it will be harder to compel ED to respond to group discharge claims when administrations change over.
Ultimately, the committee voted, but did not reach consensus, as Rovenger voted against the proposed language. He said he would change his vote should language around group discharge be added later.
Before the committee moved on to discussing in earnest the issue paper on income-driven repayment plans (IDR), Yu noted significant dissatisfaction with ED’s proposal and said the proposed language seems to be “tinkering around the edges” of IDR without addressing the root causes of issues with the program. She expressed concern that this topic would have to be revisited yet again in a handful of years.
The non-federal negotiators then went into a lengthy caucus to discuss the proposal. Upon returning, Hong outlined the IDR proposal from ED, noting that the department is focusing on undergraduate borrowers specifically and lowering payments.
Bethany Lilly, a negotiator for individuals with disabilities or groups representing them, said the committee appreciated ED’s changes to the language from the previous session, but added there are still major gaps between the current proposal and what negotiators hope the final language will be.
The committee will reconvene Tuesday morning and take up the topic of IDR.
Jill Desjean, a policy analyst at NASFAA, was encouraged by the committee’s work in its final session on affordability and student loans.
“It was welcomed to see consensus reached on total and permanent disability loan discharge as well as on interest capitalization,” said Jill Desjean, a policy analyst at NASFAA. “However, ED's proposal for a new income driven repayment plan was somewhat disappointing in the context of the bold suggestions negotiators put out during previous rulemaking sessions. I look forward to continuing discussions."
Publication Date: 12/7/2021
Frederick G | 12/7/2021 11:37:36 PM
I have been watching NegReg since October. It's extremely disappointing to see the position taken by lead administration negotiator Jennifer Hong when it comes to IDR and graduate loans. Persis Yu and Josh Rovenger have carefully explained how addressing overburdened graduates is the exact same as providing Ed’s modest relief for undergraduate borrowers, but Ms. Hong makes these blithe responses that "they" (graduate borrowers) don't deserve this relief and are "taken care of elsewhere". It is clear that she is being guided by the trope, or maybe personal experience, that graduate degrees launch all their holders into an upper middle class life.
Yu, Rovenger, and several other committee members point out that, especially for minority and disadvantaged professionals, the graduate degree is necessary to be treated with equal weight. Rich families can simply buy the graduate level for their young adult children.
Ms. Hong seems deliberately to be crafting an education "cliff", where undergraduates get some supposed "relief" (over 20 years!), but the minute someone takes out a graduate loan, the gate to that relief is closed. This echoes the ham-handed rollout of the ACA (so-called "Obamacare"), where one dollar over the 400% threshold of modified income meant the beneficiary had to pay back thousands or tens of thousands of premium tax credit (so-called "subsidies".) Congress finally put in a currently temporary fix to that in the CARES Act, and President Biden proposes this be permanent.
Ed Dept has spent 40 years chasing higher ed debt with more zealousness than the IRS does real taxes.
Everyone realizes that these forever loans are simply a surtax on people who go on to higher ed, where the same education was provided at minimal cost by the public up to the mid 20th century (up until Reagan). "Repayment" was done through the progressive rate structure of the ordinary tax system.
Peter G | 12/7/2021 2:47:01 PM
I appreciate Daniel Barkowitz's comments on transcripts - it would be problematic to have one set of federal guidance after-the-fact that conflicts with other guidance, especially for any policy like discharge that is effectively retroactive.
The other piece I think is important comes from a broader student advocacy lens than Legal Aid is going to have from where they sit downstream. From an access lens, there are significant populations of students for whom acquiring a high school transcript is a real and significant barrier, whether in a timely fashion or at all in some cases.
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