Jon Fansmith: Hello, and welcome to dotEDU. In this episode of our monthly interactive recording, Terry Hartle and Sarah Spreitzer join me to talk about the new Congress, what’s happening in the courts, and the huge regulatory agenda at the Department of Education. As always, we appreciate your questions and suggestions for show ideas, and you can share those with us at podcast@acenet.edu. That’s podcast@acenet.edu. Now, enjoy the conversation.
Hello, and welcome to today’s Public Policy Pop-Up. Thank you for joining us on what’s looking like a very busy Tuesday at least here at the ACE side. I am Jon Fansmith in Government Relations at ACE, and today I am joined by not just Terry Hartle, ACE senior vice president for Government and Public Affairs, but also by our other excellent ACE colleague, Sarah Spreitzer. Today we are going to take a look at what the new Congress might mean for higher education legislation, and then we’re going to spend a lot of time on where most of the action will be this year: on the regulatory side. So, first start off… Hey, Terry and Sarah, how are you guys doing?
Terry Hartle: Doing well, thanks, Jon.
Sarah Spreitzer: Great. Happy New Year to both of you.
Jon Fansmith: Oh, thank you. Happy New Year. Quick reminder for people participating: if you are listening live, please send any questions in through the chat function and we’ll do our best to address as many as we can. We’ve all received a number in advance, so we will, as always, try to get through as many questions as we possibly can.
But before we start with the questions, Terry, we have a new Congress. We have a duly elected speaker of the House, we have committee leaders being seated, we have committee memberships being filled out. You want to tell everybody who’s participating here a little bit about what this Congress looks like and what that might mean?
Terry Hartle: Well, you’re absolutely right, Jon. We do have a new Congress, and of course the title of this session is What the New Congress Has in Store for Higher Education. So we absolutely, positively have to start by talking about Congress. Unfortunately, there’s not a lot to say about Congress because the conventional wisdom in DC is that there’s not really much chance that they will get very many things accomplished this year. The Republicans are quite divided among their own caucus. Democrats are probably going to be unified in the House against anything that the Republicans want to do. The Senate seems to be a little bit more even-keeled than the House right now, but right now the concern is that the House isn’t going to be able to agree on anything that they’ll be able to pass.
We saw this earlier this week. One of the things that the House Republican majority wanted to lead with was legislation on immigration, particularly the southern border, but they discovered that they could not produce a bill that would get majority support in their caucus to enable them to move it to the floor. Because they don’t think they can count on any Democratic support on immigration issues, they need almost every Republican to be in agreement in how they would proceed, and they’re not at a point where they’ve got legislation that they can take forward. Despite the fact that almost every Republican running for election in the last fall argued that the southern border was out of control.
The issue is just simply, can the House move any legislation? If they’re able to move legislation, will that legislation get any traction in the Senate? And if it gets traction in the Senate, is it something that the Biden administration is going to be willing to sign into law? So most people in Washington think this is going to be an “investigation Congress.” There will be lots of hearings, lots of effort to cast blame for things at the Biden administration, lots of effort to appeal to the Republican base in the House. But in terms of accomplishments, nobody is really expecting very much.
Indeed, Jon, you and I were talking with Sarah before we went live with the webcast about the debt ceiling and the spending bills to keep the federal government operating. It’s likely that we will hit the debt ceiling sometime between May and July. Nobody’s sure when, but what we’ve noticed is that every day we’ve got stories in the newspapers about whether or not Congress will extend the debt ceiling. So six months, roughly, before we get there, there’s more news stories about it than we’ve ever seen before this far out. So what do you think, Jon? Debt ceiling and spending, are they going to get it done?
Jon Fansmith: I mean, this is such an interesting one, right? Because we talk about what are they going to accomplish. And a lot of things, frankly, I mean you went through it, Terry, the odds of passing legislation by choice: very long. It’s going to be hard to find consensus that could meet the Senate’s standards, the House’s standards, and pass the Biden administration’s muster.
But there are a couple things they have to do, right, have to do by the normal standards of running a government. And those two things are raise the debt ceiling this year and fund the government. Two things that if you don’t, there are very, very big and meaningful impacts. If you don’t fund the government, the government shuts down. That gets felt in a myriad of ways across the country.
Debt ceiling is probably the one, as you point out, everyone’s talking about because there’s not a clear path forward here, and the ramifications of not raising the debt ceiling, nobody knows. We’ve never not done it. We’ve never defaulted on our debts. But the expectation broadly is if we do, it’s going to send the global economy into collapse. If the United States is not seen as a worthy creditor, a lot of the world financial system is built upon that, and the ramifications could be serious, very serious.
Those negotiations you talked about that got Kevin McCarthy into the speaker position, a lot of them were about spending. Some of them were specifically about the debt ceiling, that the House Freedom Caucus in particular wanted equivalent cuts in spending as the price for raising the debt ceiling. If you are talking about trillions of dollars, which is generally what a debt ceiling increase looks like, and spending cuts, that is something that would be intolerable to the Biden administration, intolerable to congressional Democrats, intolerable to a lot of moderate Democrats who aren’t going to want to see the kinds of cuts to Medicare and Social Security that would necessitate.
So, yes, absolutely, we have come up against this before. There’s been lots of standoffs. But the narrow margins, it makes it a lot more risky, which, again, is why so many people are talking about this. Ultimately, we can all make our predictions. We’ve never defaulted before. The administration might have to move a little towards some spending cuts. Conservatives might have to move to lowering the amount of what they might expect. But at this point, everyone’s talking because everyone’s a little bit scared about what might happen, and we’re not talking too far down the road, maybe six months.
So as they work all that through, though, Sarah, the committees have been announced, the leaders have been announced. Some of the people who are going to be making the decisions about how to move forward on this, we now have a sense of who’s going to be setting policy in different areas. Can you tell people watching a little bit more about what we now know?
Sarah Spreitzer: Yeah, thanks, Jon. And this will be like the day-to-day business on some of the issues that we deal with a lot, like higher education policy and issues like that. And it’s taken them a little while to actually name chairs and ranking members. And I think even in the Senate, they haven’t actually named committee members officially on the Dem side.
But from what we know, Virginia Foxx from North Carolina will be the chairwoman of the now-called Education and Workforce Committee. She was previously the ranking member. And the ranking member will now be Bobby Scott from Virginia, who was previously the chairman. And Virginia Foxx and Bobby Scott have tended to have a very good working relationship, I think, for a Republican and a Democrat. But given the partisan divides and what we know is on the Republican agenda for this Congress, I think it will be very difficult to move bipartisan legislation within that committee. The Republican committees seem very focused on oversight, and so I would expect that we would see hearings in which Secretary Cardona will be called up to talk about the Biden student loan forgiveness plan, other regulatory issues that they’re going to want to dive in more deeply.
But then on the Senate side, we actually have two fairly new people for the higher education world. Obviously Senator Murray stepped down from the chairmanship of the Health, Education, Labor and Pensions Committee to take a seat on Appropriations. And so that committee is now going to be chaired by Bernie Sanders, an Independent from Vermont who caucuses with the Democrats, and Senator Sanders’ priorities really land squarely in healthcare, universal healthcare. I think he’ll be very interested in taking that up as chairman of that committee. I think on the education side, he has focused on college access, free college plans, and he will be joined on the committee by Senator Cassidy from Louisiana, who also was not in a previous leadership position on HELP and I think will be also interested in looking at some of the healthcare issues.
So for the HELP committee, higher education may take a back seat. I think on the House side, I think Chairwoman Foxx will be very interested in some of the oversight issues.
Jon Fansmith: And Terry, we have covered the fact that it is very unlikely we’ll see major substantive legislation in the higher education space coming out of this Congress. Certainly we’re going to talk in a little bit about regulations because there’s a big agenda there at the Department of Education, some of the other agencies, that will impact higher education. But the third branch of government, we don’t often talk about the third branch of government, but the next few months are going to be very consequential for institutions of higher education based on three different issues before the Supreme Court. Can you talk a little bit about that?
Terry Hartle: Sure. There are two major cases. I think everybody is aware of these cases pending before the Supreme Court. The first one is the case dealing with race as one part of a holistic college and university admissions process. The Supreme Court has heard the cases involving the University of North Carolina and Harvard. We do not expect a decision from the court until May or June. This will be one of the things that’ll be the last decisions announced.
Obviously, the implications here could be enormously far-reaching. Some people think it will have its primary impact on highly selective institutions where there are far more candidates for admission than there are seats available. But as our colleague Pete McDonough was pointing out to us this morning, depending on where they go with the decision, it could also affect a lot more colleges and universities than we might anticipate. So one of the big questions, of courses is what will the court decide about the continuation of the use of race in admissions? And the second question is how far will the decision go? How far-reaching is it going to be and how many other institutions that might not immediately suspect they would be affected by this may in fact find themselves facing this as a controversy?
The second issue involving the Supreme Court deals with the future of President Biden’s student loan forgiveness plan. This is the universal plan across the board giving up to $20,000 in loan forgiveness to people who got a Pell Grant, $10,000 for others up to $125,000 income. The court will actually hear this case at the end of February, so about five weeks from now. The Biden administration has submitted its original response to the plaintiffs. The plaintiffs are going to respond, and then the Biden administration some time toward the middle of February will submit its final response to the court.
There are two questions here. First question is does anyone really have standing to file a suit? And one of the issues the Biden administration’s raised in their response to the plaintiffs is that nobody has standing, and therefore the suit has to fall. If the court rules that someone has standing, the next question is what do they do about the plan?
Historically, courts have given great deference to administrative agencies to implement law. This is sometimes referred to as the Chevron doctrine because of a case that occurred before the Supreme Court decades ago in which the case said the judgment of the administrative agencies gets great deference when we look at whether or not the law permits something. The Supreme Court has been narrowing the Chevron doctrine in recent years. And the thinking is that if the court rules against the Biden administration, they will be further narrowing the Chevron doctrine so that agencies will only be allowed to do things that are much more clearly permitted by the legislation.
So this is not just a case dealing with issues related to student loan forgiveness; it’s a case that could have significant implications for executive branch agencies across the board and what they’ll be able to do through the regulatory process. So we’re going to have to wait and see. We probably won’t see a decision in the student loan case right away. The administration has announced that at least until June 30th, we are still in the student loan repayment pause. We will see what happens to the pause once the court rules on student loan repayment. So stay tuned on both fronts.
Jon Fansmith: Before you move on, we did have a question that is directly related to this, and it’s one of my favorite kind of questions to ask you and Sarah. On a scale of one to 10, what do you think the likelihood is that the Biden administration’s loan forgiveness program will be upheld by the courts? I’ll let you think about that longer. Sarah, I’m going to put you on the spot. What do you think? Give us a number, one to 10.
Sarah Spreitzer: Negative 10. But I’m very pessimistic, and I’m not a court watcher, but I would say nonexistent.
Jon Fansmith: Alright, Terry.
Terry Hartle: Well, to me, it’s just much harder to judge because I think the key issue here is standing. If the court rules that somebody has standing, I think they strike it down, but it’s not clear that the court will rule anyone has standing. So I’m much more in the middle. I think it’s likely that they will give someone standing and likely that we will see a narrowing of the Chevron doctrine. So I agree with Sarah, but not quite so enthusiastically.
Jon Fansmith: And for the record, I’d put it around three for much of your same point, Terry. I think standing is the big one, but I think they would love to strike this down, so they might be a little more flexible on how they interpret standing here. But sorry, I cut you off too because there was one more issue before the courts that we’re paying a lot of attention to.
Terry Hartle: You mean besides the student loans and the Harvard UNC cases.
Jon Fansmith: And I should have been more clear, not before the Supreme Court, because I know we’re talking about that. But the federal courts are looking at the DACA program and there’s been some action there in the last few months that we are tracking closely.
Terry Hartle: Yeah, the DACA decision is now back before the trial court in Texas. The trial court judge is going to make a decision about whether or not DACA is a permissible program. It will of course be immediately appealed, whatever the court decides in Texas. We’re expecting a decision at some point. There’s of course no telling when we will see it. But I think one thing that, as you say, is very possible is that DACA will be in the news very suddenly sometime in the next six months. We’re just waiting to see what the court decides and how that plays out moving forward.
Sarah Spreitzer: And I would just add to that, Terry, I don’t think that we will actually see any legislation move forward in such a divided Congress until there is likely a court decision, unfortunately. And what we saw the Supreme Court do the last time is they actually allowed for a six-month wind-down of the program so it wasn’t a sudden issue. And then during that time, obviously, there was an appeal. So it’s uncertain. It’s still a lot of uncertainty for our DACA recipients, but I just don’t see anything happening until the actual court decision by the Supreme Court.
Terry Hartle: I think that’s probably exactly right, well said. I think we just celebrated the Chinese New Year, guys, and it is the year of the rabbit. In Washington, it’s going to be the year of regulation. And regulation is much harder for our campus colleagues to follow because it’s much more intricate. It’s in the weeds. It’s not always as clear what’s happening. The media doesn’t cover it in the same way. But we’ve been talking amongst ourselves about the huge array of regulatory things that are in front of us, and we’ve divided it in our conversations between things that are absolutely going to happen and things that might happen.
And I think what we’ve seen as the administration across agencies has been laying out its regulatory plans for the coming year, it really looks like they have an insatiable appetite. But what they don’t have is a limitless number of people to prepare and implement regulations. So the question is not how much are they saying they’re going to do; the question is how much can they get done given the limitations that they have on them of staff and other resources?
Now, one thing we think is going to happen for sure are the Title IX regulations. Sexual assault is a very big deal to the Biden administration. They published a notice of proposed rulemaking last year. They received boxcars full of comments that they are analyzing. They will review the comments, they will make some modifications to the regulations in light of the comments, and they will publish final regulations that will then take effect at some point for colleges and universities.
This does not involve the master calendar. So in theory, the Department of Education could issue regulations in July and say they will take effect in September. That’s our worst nightmare because of all the changes that will be likely in campus policies and procedures. The issue here for the department is quite simply how fast can they read the comments and make modifications as required and how quickly can they get the sign off on the regulations in the White House and at the Office of Management and Budget. But Title IX is one thing that I think is very likely to happen. Jon, another thing-
Jon Fansmith: I’ll interrupt you for one second, Terry.
Terry Hartle: Yup.
Jon Fansmith: Just before we move on, because you mentioned Title IX is not under the master calendar, so it can move at any time. Just, we pointed out regulations can be hard and tricky to follow. Talk a little bit about the timing, what the master calendar, what you mean by that.
Terry Hartle: Sure. Sorry. Washington inside baseball. Under the Higher Education Act, regulations affecting Title IV federal student aid programs have to be published by November 1st of any calendar year if they are to take effect on July 1st of the next calendar year. Schools are given a great deal of time to make changes in policies and procedures with respect to Title IV student aid. But that master calendar does not apply to Title IX, doesn’t apply to all the other titles of the Higher Education Act. Therefore, the agency can try to insist on very fast implementation of regulations. This was exactly what the Trump administration did when they published their regulations in 2020. They gave campuses very little time to set up the new regulatory policies and procedures that were required. That could happen again.
One of the key arguments in our comments to the department was that campuses needed a reasonable period of time to make the significant changes given how complex, detailed, and far-reaching the sexual assault regulations would be on every campus. So worst-case scenario: we get regulations in June or July, they take effect in September. That’s just a hypothetical. The best-case scenario is the department gives campuses, say, six months to prepare to implement the new regulations. That’s one of the things we will look at when the regulations are published.
The department has said they want to have the regulations published by spring. That means they want to have them take effect in the fall. Whether they can actually do all the work and get the regulations published by spring is an open question. Jon, one other thing: FAFSA implementation. This too is going to happen, but we don’t know how smooth it’s going to be. There are lots of rumors about it. This is legislation that was enacted in December, I think, of 2020. The Department of Education has been under pressure to implement it. They’re still under pressure to implement it, but it’s a very challenging regulatory assignment. Do you want to talk about FAFSA?
Jon Fansmith: Yeah, and this is one you could talk about for a while and I’ll do my best to keep it to the highlights. But, as you pointed out, this was from a bill, the FAFSA Simplification Act that people remember Lamar Alexander was a longtime priority of his and was included right before he left the Senate. And it is going to happen because it is statutorily required to happen. The department has to make those changes on a time frame. They’ve negotiated out an extension of the time from what Congress had originally asked for.
But this is big and important things. This is changing the formula by which we determine which students are eligible for aid and how much aid they can receive. It’s really a substantive change from what we’ve had over previous decades. So it’s important to get it right. The department is rightfully taking time trying to make sure they get this done.
The problem, of course, is that these changes are widely supported, we think they’ll be very beneficial to students, ACE endorsed them when this bill was put forward. But we have talked a little bit about what the Department of Education has on their plate. FSA, the federal student aid office within the Department of Education oversees the loan portfolio, oversees a lot of the financial aid issues. There’s loan forgiveness that is hanging out there in a court decision. We are in a repayment pause that is supposed to resume midyear of this year. They have a lot of big, expensive things that they have been doing and spending as a priority. FAFSA implementation is one of those.
Unfortunately, when we went through the appropriations process, and we talked a little bit of this on the last pop-up, they did not get any more money at FSA. They were flat funded in a budget, frankly, that had increases mostly across the board, not always big, but mostly across the board. So they are taking on a huge range of new and complicated and big-scale tasks with no additional resources to put towards it. So you combine those two things, lots of work demand, zero increase in funding, and you add to it they’re changing the system that underlies a lot of this. You can get why this is a problem.
And the department hasn’t necessarily been reassuring people. There’s been a lot of push about will these changes be implemented by October 1st? October 1st is important because when we talk about prior-prior year, which is the current standard for processing FAFSA applications, it is particularly advantageous to low-income students. The department has said that they will implement FAFSA changes on time. October 1st isn’t required of them. That is what the department does, but statute actually says January 1st is when they have to do it. So there is definitely some nervousness around people who are following this that the department’s very careful wording of, “we will have it in on time,” not “we will have it by October 1st,” is a tipoff that they are seeing a longer window for implementation.
And if we do start pushing into the new year, that’s going to pose problems for students, again, primarily low-income students. It’s going to cause problems for financial aid offices on campuses that are trying to work with those students and package them and help them understand what their costs are going to be. It’s something that, frankly, is problematic across a range of spectrums. So, yes, they will do this. This is one of those ones, yes, absolutely they will do this, but when they do it is really the bigger issue for us.
Terry Hartle: I think that’s a very good point, and, frankly, as you and I know from long and sad experiences, when they tell you 10 months in advance that they’re going to miss a deadline, it’s equally possible that they won’t hit the 12-month deadline either. So we worry that this is just simply going to be held up and it’s going to back up the financial aid process for the start of the 24-25 academic year. Sarah, one other area where the Department of Education has a lot on its plate in the office of student financial assistance with no more money to hire additional staff involves foreign gift reporting. This is not quite a regulation, but the department seems to be trying to treat it as a regulation.
Sarah Spreitzer: Yeah. And Terry, we’ve talked about Section 117, the foreign gift reporting requirement many, many times before. This has been in place since the 1980s. It requires institutions to report any foreign gifts or contracts at or over $250,000. Congress has had a lot of interest in this as they’ve looked more closely at academic partnerships with institutions in China. And so now the Biden administration is doing a notice and comment for a new ICR, information collection request, and have signaled that they’re going to transfer Section 117 back to FSA, the Federal Student Aid office, from the Office of the General Counsel, where it sat during the Trump administration. And so comments on that proposal are due February 27th. We will be submitting community comments, continuing to talk about the need for the Department of Education to have real regulatory action on Section 117 and perhaps do negotiated rulemaking where stakeholders are brought to the table so that everyone understands their obligations under that increasingly important requirement.
Terry Hartle: Sarah, you mentioned this is an information collection request. That is different than a notice of proposed rulemaking, but in fact it’s a very fine line difference between information collection and imposing new regulations. And part of our take in looking at this is that they’re actually imposing new requirements on institutions that aren’t in the law, that they are treating this in essence as a regulatory process. You want to talk for a second about that?
Sarah Spreitzer: Yeah, I would just say, Terry, as I started with, Section 117 was placed in the Higher Education Act back in the 1980s. The department never actually issued any formal guidance around Section 117 until I think it was 2018 when Congress started paying attention to this issue. And the response from the administration was to launch some investigations, a new information collection request, but many of the things created new questions for our institutions. And we did see legislation proposed last year and the previous year as part of the US Competition and Innovation Act and then also the America COMPETES Act, but they were not included in that final CHIPS and Science Act. And so Section 117 remains the same as it did back in the 1980s, and I think that the department is really pushing the envelope to try to make 117 perhaps into something more than it is without new legislation.
Terry Hartle: Yeah, a matter of great concern.
Another department of regulatory area of excitement, Jon Fansmith, is negotiated rulemaking, and you and I were talking before we started the webinar about the fact that really they’re doing so much negotiated rulemaking, or have already done so much negotiated rulemaking, that we need to think of it as negotiated rulemaking one, negotiated rulemaking two, and negotiated rulemaking three.
They had two negotiated rulemaking panels in 2022. I think, Jon, those two panels dealt with about 16 issues. At the end of the day, that is about October 1st, the department published final regulations on about half of those 16 issues. They’ve got another set of issues that have been through the neg reg process. We are simply waiting for them to publish the final regulations. They can publish them anytime they want, but they cannot take effect now before July 1st, 2024 because of that master calendar that we were talking about. And obviously when things are that far away, it doesn’t seem as urgent for the agency to get the regulations published, but do you want to talk a little bit about what we see will be in this regulation-negotiated rulemaking package two and what your thoughts are on that?
Jon Fansmith: And you started, Terry, by talking about how ambitious this agenda is, and I think this is where you’re really seeing it. There are a number of things that went through primarily that second negotiated rulemaking panel last year, which was on institutional and programmatic Title IV eligibility. They just couldn’t get all of the regulations that were at the table for discussion there addressed by that November 1st deadline we talked about so they could go into effect this year. So a bunch of them got punted to 2023, and so we’re going to see new regulatory language on ability to benefit or on gainful employment, financial responsibility, a number of issues that have already been negotiated, but they simply haven’t put forward a proposed rule.
Beyond that, they just announced that they’re going to do, as you mentioned, a negotiated rulemaking number three. There’s an, again, expansive list of things they’re going to touch on there. Some of them, frankly, are probably less likely to occur just because of a lot of these capacity challenges we’re talking about. You said there’s maybe less urgency because they won’t be implemented until July 1st, 2024. But in some ways this negotiated rulemaking process isn’t going to kick off until April. And if you are trying to get any of the things you’re negotiating in, as you pointed out earlier talking about the calendar, they have to finalize this by November 1st. So you have a number of things carrying over from the past year that have to be addressed, have to be promulgated, have to be finalized. You have a whole bunch of new things you’re putting on the table that will also have to be negotiated and possibly proposed and finalized as well by November 1st.
You’re really actually starting to see a very narrow window of time to do a lot of regulation if they want to hit the goals. And keep in mind, you could say 2024 or if it slips to 2025, is that such a big deal? Well, it’s a big deal because you might have a different administration. We have a presidential election in two years. There are consequences that we are beginning to approach for the administration missing those deadlines. So there’s an urgency, I think, around doing some of these things.
That said, they’ve already put a few things forward, in particular two that we’ve paid a lot of attention to that have comments due as of February 10th, 30-day comment window. The department’s proposed a new IDR program that would be the single most generous federal repayment plan available to borrowers. That’s actually not a new plan. What they’re doing is they’re modifying an existing plan, which is called the REPAYE plan, but it’s an income-driven repayment plan. In some cases, borrowers will pay 5% of their income rather than 10%, which is sort of the standard in income plans. It’ll also allow a path to forgiveness for borrowers who have $13,000 or less. On the public service loan forgiveness, a 10-year window. Point by point by point, it is an incredibly generous repayment plan. And, again, they’re doing this through regulatory authority. This is not based on Congress acting. This is not in response to legislation.
The other thing they’ve done, and this is one, probably more than the IDR program, that’s gotten most of the chatter here in DC, is something that seems not especially consequential when you describe it. It’s an RFI, a request for information, on assembling a list of what the department has termed “low-financial-value” programs. And they’re specifically looking at individual programs within institutions, not institutions as a whole. But an RFI essentially is tell us how we do this thing. And the thing that they are trying to do is put together a list of programs, and they specifically cited in the request certificate programs at the undergraduate level and master’s programs at the graduate level, that we can see and identify using the data we have are generating poor outcomes for students, particularly in the financial return on investment for those students.
This is something that’s been talked about in a lot of different ways. There’s increasing attention at the level of programmatic oversight versus institutional oversight, and it’s not hard to see why the department is interested in this. This would be a first step to greater accountability for those institutions. Public attention on low-performing programs is one thing. A next step could inevitably be restriction of Title IV aid to those programs, either limiting it or limiting it entirely. It’s a really interesting proposal that, again, relatively innocuous, they’re asking for information, they want to have a list, but it could lead to much bigger things.
Beyond that, going back to this, of the eight or nine other issues that have been put out there, can they realistically do all of them? No, probably not. They’ll probably do more like three or four. Some of them that are particularly thorny that we have seen discussed in other capacities, the state authorization issues, that’s one that doesn’t give the department a lot of good options if they want to make changes in that area, some of those might fall by the wayside.
We don’t know for sure. We don’t know; they may try to push through with everything. But I think realistically what we’re looking at is trying to resolve the 2022 business, a few things that are getting high profile attention early on, and then a few things, maybe the third-party servicing regulations that appear to be a response to concerns in the media and by particularly Democrats on the Hill about the relationships between online program management companies and institutions. Those are the kind of things you might see moving, but there is a lot there. I mean, people can probably get this from the way I’m talking about it. The department has a huge, ambitious agenda, and it really is going to come down a lot to the capacity to see these things through.
Terry Hartle: So, Jon, just to recap, we are pretty sure we will see the results of the second negotiated rulemaking panel from last year because that work is probably largely done. We are likely to see the department make concerted efforts to implement the FAFSA simplification. How close they will come to the October 1 and the January 1 deadlines is something we are worried about. They want to do Title IX, but that’s a huge undertaking. Sarah, we think we will see a new notice of information request, which is going to feel a lot like a regulation, on Section 117. Jon, I would think the IDR that we have to file comments on by February 10th, good luck with that by the way, I think that we will see them do, because that’s such a high priority for the administration.
They’ve been saying for some time they wanted to do an RFI on low performing programs. They really want to shame, and that’s the word they use, schools that have programs that have very high debt-to-earnings ratios. The department currently has data to calculate debt-to-earnings ratios for virtually every major at every college and university in the country, and they fully intend to do it and they’re going to be looking to embarrass some schools. I think that’s something that they are very committed to.
And then we’re left with negotiated rulemaking panel number three, which has some pretty aggressive, far-reaching stuff that they’ve laid out, but sooner or later they’re just going to run out of time and bodies to get all this done. So we can tell you what people are talking about. We can’t tell you exactly what they’re going to get done, but this will be a year for regulation at the Department of Education. And that’s just the stuff that we think really is quite likely.
There are a couple of other things that we have talked about. I’ll mention one of these: Department of Labor sometime this year will, we expect, publish overtime regulations. One of the ways in which it is determined whether you are eligible for overtime pay is the amount of money you earn. If you earn above a certain set federally specified threshold, you are in all likelihood a salaried employee, you are not eligible for overtime. The Biden administration wants to significantly increase that amount of money and in essence make more people eligible for overtime because this would be very good for working- and middle-class families. They’d probably earn more if they could collect overtime than they can earn getting a lower salary. The Department of Labor has been talking about this for a couple of years. They have not issued the regulations yet, in part because of concerns that such regulations could be inflationary. But this is one way to address income inequality in the United States. The Biden administration is very committed to it. So I think if you’re running a business, and all colleges and universities are businesses, you could see a situation where the number of people eligible for overtime pay is going to increase considerably.
Jon, a second thing that we’re worried about that we can’t really see yet, but that we fully expect to happen, deals with something you mentioned a little while ago, online program managers. Right now, there is a Dear Colleague letter, which is something the department can rewrite unilaterally, it doesn’t have to go through the regulatory process. But then there’s talk about doing something with third-party servicers as a part of negotiated rulemaking three. You want to tell us where we are on that one?
Jon Fansmith: Yeah, and I touched briefly on the third-party servicing provision, that it seems that that will go through a full negotiated rulemaking process. And there seems to be some interest in looking at the definitions of what constitutes a third-party servicer and expanding that to be more expansive to cover more of those relationships online program managers, OPMs, have with institutions. The Dear Colleague letter, as you point out, that the department can do at any time. We don’t necessarily know exactly what that will look like or even if that is going to happen. But that has been something that’s been in the ether here in Washington, DC for a while. A large part, particularly at a time when this administration was taking office, there was a lot of public media attention around some examples that really cast an unfavorable light on those business practices. So the department is very attentive to this. They have a couple tools, as you pointed out, at their disposal, we know of one we think will be used to address that. And then again, Dear Colleague letter is something out there that could be another way they go at it, it’s just not entirely clear at this moment how those will interact.
Terry Hartle: And Sarah, we’re expecting some regulation coming forward. We fully expect to see some from NSF related to research security because of the legislation that was enacted last year. That’s obviously different than the Department of Ed, but it’s something that could create regulatory challenges for campuses. And, of course, one of the areas where the new House of Representatives is going to be very focused is on China and TikTok. What do you see in those areas?
Sarah Spreitzer: So, Terry, I think research security is the gift that keeps giving. And I think that the administration is very involved in implementing some of the research security provisions that were included in the National Security Presidential Memorandum 33, which requires certain institutions to have research security plans in place. NSF is now going to be required under the recently passed CHIPS and Science Act to collect information about foreign gifts or contracts over $50K, and this will be separate from the Section 117 reporting we were just talking about. And I think Congress is going to continue to look very closely at our partnerships with our institutions of higher education and China under this new Select Committee on China in the House.
Terry Hartle: All right. Jon. I think that pretty well covers the whole array of regulatory stuff that we had. If there’s time for questions and you want to throw some out, this would be a good time to do it. If there’s not, then we can just wrap this up and thank our colleagues for being with us.
Jon Fansmith: And we are at time. I think it’s a testimony to exactly how much is happening in this space that we did not get to as many of the questions as we normally would and that certainly we would’ve liked to. So apologies to everyone who submitted a question that we weren’t able to get to. We had a lot of great ones; we just didn’t have the time. But please check back with us. We’ll be doing another public Policy Pop-Up in February. Details of that coming from ACE, so keep an eye out for it. And thanks once again for joining us, for all the thought and attention you give to these. We really do appreciate it, and we look forward to talking with you again. Enjoy the rest of your day.
Terry Hartle: Thank you.
Sarah Spreitzer: As always, you can check out earlier episodes and subscribe to dotEDU on Apple, Google Podcast, Spotify, Stitcher, or wherever you listen to your podcasts. For show notes and links to the resources mentioned in the episode, you can go to our website at acenet.edu/podcast. While there, please take a short survey to let us know how we’re doing. You can also email us at podcast@acenet.edu to give us suggestions on upcoming shows and guests. And finally, a very big thank you to the producers who helped pull this podcast together. Laurie Arnston, Audrey Hamilton, Malcolm Moore, Anthony Truehart, Rebecca Morris, Jack Nicholson, and Fatma Ngom. They do an incredible job making this happen and making Jon, Mushtaq, and I sound as good as possible. Finally, thank you so much to all of you for listening.