Amid two landmark decisions from the U.S. Supreme Court (SCOTUS) on President Joe Biden’s student debt cancellation plan and institutions’ race-conscious admissions policies, NASFAA staff on Friday afternoon gave insight to attendees on what these decisions mean, as well as a look into the political landscape in Washington, D.C.
The session was led by NASFAA President and CEO Justin Draeger, who said the goal of the session was to tell attendees what’s happening in D.C. and to help them think strategically about their aid office. Draeger then highlighted his five takeaways from the court’s decision barring institutions from using race-conscious admissions policies. Primarily, Draeger said, it will take time to answer questions, specifically how this decision will impact financial aid offices.
He added that this SCOTUS decision will spur a lot of additional legal cases in state jurisdictions and there will be residual impacts. He also encouraged attendees to be doing a risk assessment, including examining their scholarship programs, notifying their legal counsel, and staying in contact with their institution’s president. Last, he urged attendees to not overreact.
“Let's make sure that we are taking measured approaches and adhering to the values that each of our institutions hopefully adhere to, which is we understand that regardless of what the Supreme Court says, there are and continue to be racial gaps in educational opportunity, access, and outcomes,” Draeger said. “And I imagine that each of our institutions takes seriously its responsibility to bridge those divides, and we are going to be looking at our admissions policies and ways that we can continue to adhere to those values.”
Draeger noted that NASFAA members interested in learning more about the decision on race-conscious admissions policies and how it will impact aid offices can tune in to a webinar on the topic on Wednesday, July 19, at 3:00 p.m. ET.
Draeger then turned to the latest updates on the court’s decision earlier that day overturning Biden’s student loan debt relief plan, which would cancel up to $20,000 in student loan debt for eligible borrowers. Reacting to the decision, Draeger said he hopes Friday’s decision will lead to a bipartisan approach to student loan reform.
“If anything, hopefully, what we can start to do is bring some sort of conclusion to this so that we can begin to do something we haven't been able to do for the last year, which is start to have a conversation about student loan reform,” Draeger said. “That is not a conversation we have been able to have because all of the focus is on student loan debt relief.”
In response to the decision overturning the student debt cancellation plan, the Biden administration later on Friday revealed its next steps, including its new income-driven repayment plan, the “Saving on A Valuable Education (SAVE)” plan. Jill Desjean, NASFAA’s senior policy analyst, said on Friday that the SAVE plan is a modification of the current REPAYE plan, and listed some of the notable findings of the unofficial final regulation that the Department of Education (ED) released on Friday.
Additionally, in Friday’s announcement of next steps, the Biden administration said it will attempt to implement student debt cancellation under authority granted in the Higher Education Act (HEA) and through a negotiated rulemaking session. ED also shared that it will provide a 12-month “on-ramp” for borrowers resuming repayment, during which time interest would still accrue on student loan balances, but a borrower would not enter into default status if they miss a payment.
Looking at the bigger picture of the political landscape, Rachel Gentry Rotunda, NASFAA’s director of government relations, outlined the budget and appropriations process and how it relates to higher education funding. She noted that it could be challenging to seek more funding for higher education programs amid Biden’s student debt cancellation efforts, which could cost between $440 billion to $600 billion over the next 10 years if implemented.
“We're not getting into the merits of what the administration has proposed, but the political reality is that $500 billion has really changed the view of education funding amongst the Republican party,” Rotunda said. “We have certainly heard Republican lawmakers and their staff saying they’re going to be seeing a lot of potential cuts, or at least lack funding, for higher education. This is all happening at the same time that the administration is proposing a $500 billion price tag that didn't come with any kind of congressional direction.”
Karen McCarthy, NASFAA’s vice president of public policy and federal relations, also touched on the process and history of negotiated rulemaking and reauthorization of the HEA, which was last updated in 2008. McCarthy noted that the HEA reauthorization process generally takes about four to six years, but after over a decade without reauthorization, negotiated rulemaking has in a way substituted for that process.
“We have not had reauthorization, but we have had lots and lots of negotiated rulemaking on almost an annual basis, if you recall, so you're not imagining it,” McCarthy said. “It is coming at you on a more regular, almost annual basis, which is a lot more than it has in the past.”
Draeger closed out the session, noting the constantly changing regulatory environment. He said aid administrators must now get used to this new reality, and even suggested aid offices form a team to monitor and implement new regulations on an ongoing basis.
“This quaint idea of a reauthorization, I don't think we're going to talk about that anymore in NASFAA updates,” Draeger said. “It's a nice little thing to keep mentioning, but so many years have gone by. How many decades have to go by before we just stop talking about this? It's not on the horizon. This is the new reality. It is a constant regulatory environment. It will change with every administration.”
Publication Date: 7/1/2023