What Will Happen to Biden-Era Regulations Under a Trump Administration?
By Jill Desjean, Director of Policy Analysis
Any presidential transition brings a shift in executive branch priorities. This January will be no different. With the presidential election behind us and Donald Trump assuming office this January, NASFAA’s members are understandably wondering what will happen to the many regulatory initiatives pursued by the Biden administration over the past four years. While there is no official word on Trump’s plans for these regulations, we can share the potential paths he can follow and, in some cases, assume Trump’s course of action based on his last term and statements he has made while campaigning.
Final Rules
The Biden administration managed to finalize a slew of new regulations over the course of his term, including gainful employment & financial value transparency (GE/FVT), the SAVE repayment plan, and borrower defense to repayment, among others. The Trump administration could choose to rescind any of those regulations, which requires the Department of Education (ED) to follow the Administrative Procedure Act’s notice and comment process.
We saw this occur during Trump’s first term with the gainful employment rules that were finalized during the Obama administration, so it would be fair to assume a similar fate for the latest round of GE/FVT rules.
Unfortunately for postsecondary institutions who are working now to comply with the institutional reporting requirements associated with that rule, the January 15 deadline falls under the current administration’s purview. NASFAA, along with several other higher education associations, has communicated the challenges institutions still face with respect to meeting that deadline, however, it still remains in effect.
The SAVE plan is currently on hold awaiting a court decision on its legality following lawsuits filed by several states opposing the plan. If the courts determine the plan is illegal, the Trump administration is unlikely to appeal that decision and the SAVE plan would be eliminated. If the court upholds the SAVE plan, Trump would have to follow the process to rescind the rule if he wished to eliminate it.
Proposed Rules
Several rules negotiated during the Biden administration remain in a proposed rule status as of today, including student loan debt relief, changes to Return of Title IV Funds (R2T4), distance education, and TRIO programs. If final rules are issued prior to the inauguration, they could still be rescinded by Congress via the Congressional Review Act (CRA), which gives Congress 60 days from publication of the final rule to vote on a joint resolution of approval to invalidate the final rules. It is not clear whether there is an appetite to dismantle any of those rules, but with Republican control of the White House and narrow majorities in both chambers of Congress, they will have the ability to utilize the CRA, which only requires a simple majority vote in each respective chamber.
If proposed rules are not finalized before Trump takes office, he can move forward with publishing final rules or opt to abandon the rules by taking no action to make them final.
For student loan debt relief, most of the provisions were released as proposed rules in April of 2024 but the Biden administration is currently blocked by a court order from releasing final rules or implementing any part of the provisions released for public comment in April. The courts would need to lift that prohibition before Trump takes office for the Biden administration to be able to take final action on those provisions.
Proposed rules for the final piece of the student loan debt relief rulemaking session—the waiver for financial hardship—were released on October 30 and are currently open for public comment until December 2.
In order for the financial hardship waiver provisions to become final, ED would have to review and respond to all comments received and issue a final rule. If not done by the Biden administration prior to the inauguration, this is not an area the Trump administration is likely to pursue, so his administration would presumably abandon the rule in the proposed rule phase. Even if finalized prior to Trump taking office, the rule would then be subject to the Congressional Review Act, or the Trump administration could rescind these rules through the notice and comment process.
R2T4, distance education, and TRIO final rules had to be finalized by November 1, 2024 in order to become effective July 1, 2025. Because ED missed that November deadline, if Trump decides to finalize these the earliest they could be effective would be July 1, 2026. And, again, Trump can abandon these rules at the proposed stage so they never become effective.
Pending Rules
Topics negotiated during the 2023-24 rulemaking session that never saw proposed rules issued include cash management, accreditation, and state authorization, none of which met consensus during negotiations. As with proposed rules that are not finalized before the inauguration, the Trump administration can move forward with issuing a proposed rule for these topics followed by a notice and comment period and then issue final rules, or it can take no action at all, meaning those rules will never become effective.
The Biden administration also recently indicated it is in the process of drafting rules to accommodate borrowers interested in applying for the PAYE or ICR plans. Those plans were sunsetted as of July 1, 2024 as part of the SAVE regulations, but now that the SAVE plan is facing legal challenges ED is interested in making those plans once again available to borrowers. ED will be working on a tight timeline to issue these rules but, if finalized before Trump takes office in January, they could still be overturned via the aforementioned avenues. Otherwise, in the case ED does not release a final rule, Trump could just never publish these rules.
ED’s Spring 2024 Unified Agenda of Regulatory and Deregulatory Actions, which states federal agencies’ long- and short-term planned regulatory and deregulatory actions also included third-party servicers, documentation of foreign gifts and contracts, PSLF employer eligibility, and cybersecurity standards for institutions of higher education. Whether the new administration will pursue any of these actions is unknown as of now, although it is worth noting that the Biden administration recently indicated in a status report on a lawsuit filed by 2U, LLC et al. vs Secretary of Education Miguel Cardona that it plans to rescind its 2023 Dear Colleague Letter on third-party servicers by November 18, 2024, although as of now we have not seen action on this. Read Today’s News for the latest on regulatory changes.
Publication Date: 11/26/2024
Nedi G | 11/26/2024 3:17:57 PM
While this is all speculative at this point, I think David S. may unfortunately be 100% right. The movie is the movie. Only way some version of the GE/FVT persists is if this piece moves to Department of Labor and Lori wants to keep it. Otherwise, you can be sure that Linda will body slam it.
David S | 11/26/2024 12:20:37 PM
Thank you for your assurance to the American consumer, Jeff.
https://truthout.org/articles/trump-is-poised-to-dismantle-the-consumer-financial-protection-bureau/
Jeff A | 11/26/2024 12:1:57 PM
Certain portions of the BDR rules are making the rounds in the courts, including SCOTUS, and has been paused indefinitely. The GE portion of GE/FVT has two court challenges pending. Couldn't ED/DoJ just agree with the challenges and encourage the court to shoot them down, rather than going through a neg reg? Maybe the APA would need to be done eventually, but seems like the parties in those cases could agree not to enforce the regs in the interim.
No David S, you are going to see better protections for consumers by the end of this four years. Rather than allowing regs that only hold 5% of higher education accountable, you are going to see the extremely narrow and horribly faulty FVT metrics greatly expanded to include the outcomes metrics consumers really care about, by program. Students need to better understand where their opportunities are, and employers need graduates that better align with their needs.
Peter G | 11/26/2024 11:47:17 AM
While it's hard to predict with certainty, this ED administration worked to shift GE into FVT/GE precisely because the FVT component is intended to have bipartisan appeal.
In the same way the DeVos administration revamped the college scorecard, I could see them leaning into the aspects of this they like while perhaps altering or just stripping the GE components.
Personally I'd like to see FVT thoughtfully merged with (and replace some of) NSLDS reporting, but that would a) take Congressional action, and b) take time to actually craft something better that is probably too much to hope for.
David S | 11/26/2024 11:32:53 AM
It's not like we haven't seen this movie before. Everything that protects consumers, including any regulatory action to forgive debt and/or make it more affordable to pay, will be scrapped. And anyone who thinks that the likely elimination of GE and FVT will be because the Trump Administration has heard our calls for regulatory relief loud and clear and wants to lessen the administrative burden on colleges hasn't been paying much attention to what the incoming administration has been saying about colleges.
But that's all based on the movie we already saw. The sequel may add the elimination of accreditation, deportation of international students and a significant increase in denied student visa applications, threats of rescinding tax-exempt status, attempts to seize (disguised as "taxing") endowments in the name of ending whatever anyone wants to call "wokeness" (as demonstrated by DEI initiatives, just as one example)...and that's not even getting started on what will happen to financial aid.
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