Jon Fansmith: Hello. Thank you for joining us for this November edition of dotEDU Live. I am Jon Fansmith, ACE's senior vice president for government relations and national engagement. And today, I am joined by two of my amazing colleagues, wonderful people, and talented advocates, Sarah Spreitzer and Steven Bloom. How are you both doing?
Sarah Spreitzer: Great. I'm glad that-
Steven Bloom: Good.
Sarah Spreitzer: ... this is actually recorded of you calling Steven and myself amazing.
Steven Bloom: I'm going to keep that in a special place here.
Jon Fansmith: The performance evaluations aren't for another year, so there's plenty of time for me to change my tune, guys.
Steven Bloom: I'm sure there is.
Jon Fansmith: And speaking of plenty of time, I don't know that we have enough time to cover all of the things that are happening right now. And I'll even say our producers are a little bit worried about how much we have, and I don't even think we're going to cover everything, but Sarah, where should we kick off?
Sarah Spreitzer: You know what, let's kick off on whether or not the government is going to shut down on November 17th because we've been going back and forth about this, Jon, whether or not we were going to take a bet. I was in the camp that I thought that they were going to actually shut down because that's the current continuing resolution expires November 17th. You said no, they're going to actually get their act together, so where are we?
Jon Fansmith: Yeah, and I appreciate you framing it that way. I did say they'd do a CR, I did say they would not be shutdown, but I said it would be until December. I also really ridiculed the idea of a laddered CR, and so, of course, having said that, we have a laddered CR that moves spending back to two different dates in January and in February. And I'm sure people are wondering as I say this, "What is a laddered CR?" because that is some real inside the beltway jargon, but a CR is a continuing resolution that is essentially the extension Congress gives itself on funding. They pick a date in the future and say, "Even though we've passed the real start of the federal fiscal year in terms of funding the government, we're moving our deadline back to this date to do it." Congress does this really every year for over a decade at this point.
But what's new, a laddered CR is this idea that you would set not one date, which is what has always been done. All the funding bills move back to a certain point. A laddered CR actually now says there are two different endpoints at which funding will run out. And in this case, there are four bills that have been moved to January 19th and the remaining eight appropriations bills have been moved back to February 2nd. So if they don't finish funding work on those four by January 19th, those agencies will shut down while the agencies funded by the other eight bills will continue to operate.
If that's confusing and if that makes it seem like the job of funding the government just got harder as a result of this, well, yeah, that's I think exactly what happened. We avoided a shutdown, or I should say we look like we'll avoid a shutdown. The Senate has not yet voted on what the House has done, but they've indicated that they probably would if for no other reason than to avoid a shutdown. And the administration, despite critiquing this approach, is likely to sign it as well.
It's a bit of a mess, right? I will say, and we were joking beforehand or I was joking and no one else was laughing, but pushing the deadline for some of these bills back to February 2nd, which happens to be Groundhog's Day, is appropriately ironic because Congress is going to be dealing with another funding deadline on Groundhog's Day again for the third time this session, adding in the complexities of trying to negotiate different bills, funding different agencies at different times.
Generally, Congress has enough difficulty doing this process, adding a new layer of difficulty doesn't seem like it's going to help, but this was probably the path forward. I think new speaker Mike Johnson facing the same issue that got Speaker McCarthy, former Speaker McCarthy, kicked out of his role, chose to do this in part because the laddered CR idea came from the House Freedom Caucus. They endorsed that. It was in many ways seen as a concession to them. If it was a concession, it didn't really work. 93 Republicans voted against this bill. Only two Democrats did. The bill passed with overwhelming Democratic support. More Democrats voted in favor of it than Republicans did, and already we're seeing the repercussions.
The Labor-HHS-Education bill, the bill that funds the Department of Education, was on the House floor yesterday. Amendments were being voted on. The hope was to have a vote in the House this week. But after the CR pass, Freedom Caucus members have essentially said, "We're going to shut down floor action." So the two appropriations bills that they were moving to consider the Commerce-Justice-Science bill, the rule that would bring it to the floor was rejected, meaning they can't consider it. And the Labor-HHS bill, they got ahead of it. They're pulling that now saying that the final vote will move to November 28th, the week after Thanksgiving.
So you are saying nobody's looking to kick Speaker Johnson out, which is what they did to Kevin McCarthy when he did this extension of funding without getting reductions in overall spending. But a lot of members in the Republican caucus not very happy about this. You keep adding that difficulty, that tension, and certainly the feeling that they don't have a leader who's fighting for spending cuts, two more deadlines, not a huge amount of time on resolve these issues. The worst has been averted in the short term, but we probably set up a much harder situation just a little bit down the road.
Sarah Spreitzer: Yeah, I was going to say, Jon, this is an interesting way to package this because a lot of times what happens is they can't move the approps bills without putting something that they know will have bipartisan support like the defense funding bill. And so splitting this up into two packages makes it seem like they're going to lose the ability to do that.
And then we've talked about before, the House and Senate are starting from very, very different places. And you could even see that in the amendment process in the House because they were proposing even more cuts on top of the enormous cuts that are in the education programs, National Institutes of Health. And so the idea that they would actually be able to conference these bills is one that I just can't believe anybody is even considering. I mean, why not just say we're going to be in a yearlong CR and let everybody get along with their holiday shopping and start looking to the holidays. But yes, I guess we're going to do the laddered thing.
Jon Fansmith: Yeah, and to your first point about some of these bills that always have agreement, defense being one of them, I don't think Democrats would've supported the laddered approach if they put defense in that first batch. Part of the reason, if gut support is labor, HHS, education is in that second batch along with defense. The bills that have to they know will get votes in favor are being at least held back with the votes where they know there'll be partisan opposition. Had they not done that, had they put all the easy to pass ones upfront, Democrats would not have supported that. This at least preserves the possibility of some package down the road that allows for passage of the bills that would face pretty uniform Republican opposition on the floor or Democratic opposition in the Senate.
Steven Bloom: Jon, quick question. In addition to the way you laid it out there, which I think is very interesting analysis of it, do you think also Democrats think they're get a deal on a clean CR that would be the continuing resolution for the rest of the year before the January deadline? Do you think that's what they ultimately think is going to happen?
Jon Fansmith: Certainly not by the end of the year, right? I think Democrats might hold out hope for that in many ways. So because of the debt ceiling deal this year was going to be flat funding anyway, that's what the agreement was. So a clean CR, you probably don't like it. You would have anomalies, you won't have the ability to adjust program levels, but overall funding wise, you're holding ground, which is great, when a lot of people are pushing for cuts. Is that realistically going to happen? It's very hard to see how that happens. Speaker Johnson may pursue that, but right now, especially in the next month, given how angry his most conservative members are about the CR itself, that's a very aggressive move. He's really committing to the idea that he's going to work with Democrats going forward to get bills passed and that may limit his tenure in the role.
Sarah Spreitzer: And Jon, we got a question from our friend Tom Vu out in California about how this impacts the deal that they made when they increased the debt limit earlier this year was that they had to get appropriations bills passed by January, right? Otherwise, we were going to have a 1 percent cut across the agencies, and that would be for defense and non-defense discretionary programs. Do you think that that's what's going to happen? Are they resigned to that?
Jon Fansmith: Yeah, so it's interesting because I was actually just asking our approps expert Emmanual Guillory about this this week. I have been pretty focused on that. And Sarah, I'm going to give you a little bit of credit. When they first did this deal, I said, "This is important." They've put this deadline with real teeth in there and you basically brushed me off and said, "Congress can just change the rules as they go along." And I think frankly, that's what you're going to see here. That concern about a 1 percent cut is only meaningful so long as Congress chooses to abide by it. And the big thing about the 1 percent cut really is it would cut defense spending and nobody wants to cut defense spending. I think with a CR, with an ongoing process, they can certainly add new language that says this deadline is extended or it'll be included in the FY 24 funding only under certain conditions or something like that. They can just change the rules. So Sarah, you were clairvoyant on this and I think that's exactly what we're going to see.
Sarah Spreitzer: I'm glad to be right about something sometimes.
Jon Fansmith: Well, you're right about many things in many areas, Sarah, but one in particular the concern on Congress about foreign influence on college campuses. There's been a lot of action in that area recently. You want to tell people about it?
Sarah Spreitzer: Yeah. And I will say, I've been telling people since the start of this administration, just because we have a new administration, it doesn't mean the attention on China or foreign funding to our institutions is going away. And so we saw the House mark up a bill called the Deterrent Act that looks at Section 117 of the Higher Education Act, which has to do with foreign gift and contract funding to our institutions. The bill amends Section 117 and then creates a whole host of sub reporting requirements under 117.
So for instance, it does a Section 117(a), which would require contracts with countries of concern. Those are China, Iran, Russia, and North Korea. Any contract an institution had with one of those countries would have to be reviewed by the secretary of Education and they could be granted a waiver. But most likely what we've seen with these waiver processes is they're not granted. And so therefore it ends up being a ban on any contracts between our institutions and those countries of concern.
The Deterrent Act also creates a new requirement requiring some institutions to have policies around foreign gifts and contracts to individual researchers, and not just the individual researchers, but the professional staff that are working for the researchers where they would have to report anything over $480 from one of these countries of concern. And then that information would need to be made public by the institution in a searchable database.
117(c) is a new requirement regarding investments that private institutions with endowments over $6 billion would have to report investments or holdings again with these countries of concern and again for a public searchable database. And then finally, it creates a whole host of new enforcement policies, especially around fees. And most worrisome is those fines would be tied to a school's Title IV eligibility or the amount of the fine would be set by how much funding is being received from the Department of Education.
So that bill was marked up last week. It did pass the Education and Workforce Committee. Most surprisingly, I think for me, is that there were three Democrats that voted for the bill and Chairwoman Foxx has said that she wants to take the bill to the floor as quickly as possible. And I think when it goes to the floor, we are likely going to be seeing some Dems support this.
We did send up a letter to the committee before the markup about the problems that we saw with this bill, especially around those subsections, and we will be communicating our concerns in the lead up to the bill going to the floor. And I see our producers put in a summary, and I'm also going to ask that they link to our letter that was sent up before the markup, but yeah, we're waiting to see when it might be taken up. Oh, thank you, producers. We may see it taken up at least before the end of the year, and there continues to be bipartisan interest on this.
Jon Fansmith: And Chairwoman Foxx said after the markup, right? That she had an agreement with Speaker Johnson to bring the bill to the floor, and she's certainly been pushing hard to expedite the timeframe for moving this legislation. Right, Sarah?
Sarah Spreitzer: Yeah. Yeah. And then the other thing, Jon, which I know you were paying attention to is she also talked about the fact that this is the first in a series of bills to reauthorize the Higher Education Act. So for those of our listeners that are always wondering when is the Higher Education Act going to be reauthorized, Chairwoman Foxx has a plan.
Jon Fansmith: Yeah. And it's funny because without fail, since we allow people to register and ask questions in advance, someone asks for an update on HEA reauthorization status, and that did not happen this week. And of course, it's the first time we have the opportunity to say, "Look, there's progress on HEA reauthorization."
Sarah Spreitzer: That's right.
Jon Fansmith: Very, very small progress, but we're making some progress. One question came in while you're talking, Sarah, about deterrent from Annie Stoll. If we currently have partner institutes in China, what would be the recommendation on the path forward based on this new legislation?
Sarah Spreitzer: Yeah. Well, I don't have a crystal ball to say that it will pass the Senate in the form that it's going to likely pass in the House. But I think that institutions in any of these partnerships with these countries of concern, they need to be very careful. They need to be responsive to questions that they may get from policymakers about why they're moving forward with these partnerships. They need to have any contracts reviewed by their general counsel, and they need to make sure that they are reporting any foreign gifts or contracts through the current Section 117 system at the Department of Ed.
Jon Fansmith: Great, thanks.
Steven Bloom: Thank you. Yeah. You and I were talking earlier about the possibility that, and I know we're going to talk about some of the hearings in a minute, but the focus now on Capitol Hill quite extensive focus in different committees on the crisis in Israel and Gaza and the rise of antisemitism and I think increased concern about potential funding to our institutions from places that might be connected to Hamas. Do you think that along with the general worry about China and that this is likely to have the crisis and is likely to have its own push towards updating Section 117, which after all we know that was enacted because there was a concern about funding going to Princeton by people who at the time were alleged to have also supported the PLO. So back to the future in a way?
Sarah Spreitzer: Yeah, no, I think that's a really good point, Steven. And I think that it's not just about China. It is these overall concerns about foreign funding to our institutions. And so I think that that will likely come up during the floor debate on this legislation. And I think for any of our institutions, they should make sure that they're in compliance with Section 117 because this is obviously a continuing issue of bipartisan concern from policymakers.
Jon Fansmith: Yeah, and just to that point, Lauren just asked a question about could we see an addition to the number of countries of concern you think about, which I always mispronounce about Qatar and other countries that have been highlighted in the past in terms of their relationships with institutions. And now particularly in light of ties with Hamas, I'll jump in and say I have a feeling the idea that it'll certainly be proposed to expand that list.
Steven Bloom: Yeah.
Sarah Spreitzer: Yeah, the list is actually, I think it was established through a National Defense Authorization Act, and so obviously we're going to see that before the end of the year, and so you could easily expand the definition to include other countries under there.
But Jon, turning from the hill, there's a lot going on this week at the Department of Education, and I know you were actually listening into a meeting today on FAFSA simplification.
Jon Fansmith: Yeah. And I mean, this is telling about how much big stuff is happening right now that this is the point in the webinar we're talking about this because this has a real direct and significant impact on college campuses after months and months and months of trying to figure out when the brand new FAFSA form will be made live, the department had an announcement today that they say it will be up by December 31st. I think a lot of people are reading that as it will be up on December 31st. Generally, you would not say by this date if you meant a week earlier, especially given the concern they've heard from people about knowing what the date will be. So that's one thing I think fair to say, somewhat disappointing. People have known for a while that they weren't going to hit the October 1st deadline for early application.
By statute, they have to hit the January 1st deadline. So December 31st date does that, but it is the absolute last point to keep them in compliance. It's one thing, right? It's disappointing. It's certainly frustrating for low-income students not being able to apply until that point. I think the other thing, and Ed addressed this to a certain extent with their announcement today, that means that in the best case scenario, students who are applying as soon as it's up, institutions will begin to receive the individual information about those students a form called the ICIR back at the end of January. So as delays in applications, a lot of students might not be thinking to apply, especially over that period around the holidays, the end of the year, the longer they take to apply, the longer it'll take to get the information in institutions, and then there will be a process of several weeks after institutions have the information where they need to upload it.
It's a brand new system, brand new requirements. Institutions often are using technology provided by vendors that is being updated and is new to them. And that's again, before you get into what needs to be done to correct and amend errors in the process or fix things, it's concerning. We are really pushing back a lot of the information institutions need to package, and I've talked about this on here before. We've heard from a number of institutions that have been packaging for months now simply because they have to further delays in getting accurate information as to students' financial, both needs and aid eligibility. It just makes that a lot harder for institutions to understand what they're looking at, what they're dealing with. It also makes it difficult on those students, especially the low-income students we worry about, they will take them longer, deeper into the search process to know not just, I said this in a news article earlier this week, not just where they can afford to go to college, but whether they can afford to go to college. So, very disappointing.
I think it's worth saying that the Office of Federal Student Aid at the Department of Education was handed a nearly impossible task. And so to a certain extent, seeing them not hit that goal earlier in the year, I can't say we expected it, but it's certainly understandable. They're doing it with not sufficient resources, lots of demands, lots of other things they're doing. This is one of those cases where two things can be true. They can be working very, very hard. They can be doing the right thing and they can still not be doing a good enough job. This, I think by most accounts, would not be considered a good enough job. We've had a while to do this. The impacts on campuses is going to be significant. They are trying very hard. They're doing the best work. They have performed outreach institutions, but this is not great. This is just barely hitting your mark at the absolute lowest level.
So obviously, a lot of concerns. We are certainly going to reach out to the department and FSA and talk to them about ways in this interim period where they can start working more closely with stakeholders and figure out ways to address what will inevitably be problems as we push back into the application process, as we implement new systems, as institutions interact with the department over problems, it's going to be a big challenge for everyone involved. That work needs to start as soon as possible. So that's where we stand.
And I did just see a question, will this new system be more difficult for low-income or first generation students to use? And that's from Erica Swirsky. And Erica, that's a great question and in some ways I buried a little bit of the lead here.
There is a reason they're doing this, right? It should make it significantly easier for low-income students to apply for federal financial aid. And in fact, the expectations, the department cited this in their announcement today. The expectations are that hundreds of thousands of students will become eligible under the new rules that wouldn't have been eligible for Pell Grants under the new rules, and 1.5 million Pell Grant recipients will move to being max award recipients.
So it's not just that'll be easier for student supply, but even those students who are already in the financial aid system, they should see more generous benefits. These are good changes ultimately, and I don't want that to get lost and the concerns we have about what the implementation process looks like. Ultimately, this will be a good thing, but it's going to be a very bumpy year as we get it up and running.
Sarah Spreitzer: And Jon, speaking of problematic regulations being finalized by the government, I know Steven has been working on the Department of Labor FLSA exemption, or overtime exemption. Steven, that's something that I don't follow as closely. And I know that you worked with other associations to submit comments and there were like 33,000 comments I think that were submitted.
Steven Bloom: Right.
Sarah Spreitzer: What is the outlook on those rules?
Steven Bloom: Well, let me back up a little bit. I know most of the time in these podcasts, we talk about our role as educators and the impact of policy choices that are going to impact students and families. This is one that will impact us as employers. We're major employers. We are located in across the country, thousands of employees, more than 2 million, and the Fair Labor Standards Act, the FLSA, which as Sarah mentioned, it's an old statute passed in the 1930s. It established the federal minimum wage. It has a framework for determining who is eligible for overtime under the so-called White Collar Exemptions Framework. And this proposed rule is really a updated version of what the Obama administration tried to do in 2015. The Biden Department of Labor released this rule in early September, and it would significantly increase an element of the three-part test to determine whether you are eligible for overtime.
Under the Fair Labor Standards Act to be eligible for overtime or to be exempt from overtime, you have to satisfy three pieces. One, you have to be paid on a salary basis. Two, your salary has to be above a certain threshold that the government establishes, and then your job has to involve certain duties that involve independent judgment and discretion. You have to satisfy all three of those elements, and this proposed rule would increase the threshold. The second prong of that three part test, the current threshold was established by the Trump administration, went into effect in early January of 2020. It's about $35,500 and change. That was a significant change from the Obama administration's effort that they finalized their rule in 2016. That threshold that they had proposed was $47,000, nearly 500. That rule was challenged in court and ultimately blocked. And then when the Trump administration came into office, they withdrew it and then they propagated their own rule and established the current threshold that we're operating under the one that's $35,500 and change.
This rule would essentially raise that current threshold from the $35,000 level to somewhere probably around $60,000 using the data that the Department of Labor has said they're going to base the calculation for the threshold, and it's likely to have, I think, a major impact across campuses. There are certainly categories of employees that work on campus that won't be impacted. Faculty and adjuncts, they are exempt under the Department of Labor's teacher exemption. Students will not be impacted; Generally they're exempted. That would include graduate students that are research or research assistants or teaching assistants, even some athletic coaches, many athletic coaches, if they're engaged in teaching this sport, they would not be covered by this.
But there will be a whole category of non-faculty staff earning less than that proposed threshold. If it goes into effect at the level that we think it's going to be or what the Department of Labor says, it will be over $60,000 that they would be suddenly entitled to overtime and have to be paid on an hourly basis. And for many jobs, that will be a huge change in the way those jobs operate and the latitude that employees in those kinds of jobs.
So for instance, CUPA-HR, that's the HR association that we worked very closely with. They were the principal author of the comments for the higher ed community. We worked with them on them. Those, I think we might be able to put those in the chat so that you can see them. But they did a survey of some of their members and they came up with really top 11 positions that will be impacted on campus. I'll just give you a quick sample of that. Academic advisors, student admissions counselors, student financial aid advisors, and the residence hall, like a residence hall manager, athletic trainers, and a number of others.
Now, how is this going to play out? The comments were due on November 7th. As Sarah mentioned, there were more than 30,000 comments that were filed. That's a lot. So it's going to take time for the Department of Labor to review them, but we would imagine that the review would, in the ordinary course would probably take around three months. And so it should be completed by the end of February.
They would then send the proposed regulation to the Office of Management of Budget and an office over theirs would assess them and review them and then give the green light to the Department of Labor. And then the final regs would be released. And we believe that the release would probably be late March, early April. And then we think that the Department of Labor is going to require a 60-day implementation period. And so they would have to employers including higher ed, unless they somehow exempt us, would have to implement this sometime in the May to June of 2024. And you can imagine how disruptive this could be on campus.
Sarah Spreitzer: Hey Steven, I know when this was proposed or changes were proposed under the Trump administration, they went to the courts. Is there any chance this would be stopped by the courts or do you think it's just they will be finalized?
Steven Bloom: I think if passed is prologue, there will be litigation over this. And one piece of it that we raised objections to in particular is there's an element of the rule that would mandate automatic updating of the threshold every three years. And we believe that's beyond the authority of the Department of Labor. And I could see that in litigation that that would certainly be one target that opponents of the proposed rule would go after and try to block the implementation of the rule. But that seems to be, unfortunately, I'm not saying that about this particular rule, but because Congress is really broken and we've talked, I know Jon talks a lot about the way in which the administration, and this goes back a number of administrations, has stepped into that void. And what that's also meant is that the courts have taken on an increasingly greater role in policymaking or blocking policymaking. And this is a good example, and I think we could definitely expect litigation over this rule.
Jon Fansmith: And we'll certainly keep people posted as the rule is finalized and as court challenges occur and let people know about where it stands and certainly about the implementation issues, which seem very nightmarish to me. But Sarah, there has been a lot of attention recently on the handling of debate over the Israel-Hamas conflict on campuses and particularly the rise of antisemitism, acts of antisemitism on college campuses. Congress has been paying attention. They've had a number of different responses to that. And you want to just catch people up on that.
Sarah Spreitzer: And I would just say, Jon, this was mentioned when we were talking about the Deterrent Act. Steven rightly pointed out that this was brought up during the markup of that bill and whether or not our institutions were taking funding from countries that may be supporting some of the Hamas actions. But we've seen a bunch of different hearings in different committees, not so much legislation I think proposed yet, but we had a hearing in the House Judiciary Committee. We had a hearing yesterday in the ED and Workforce subcommittee on higher education that was very much focused on college and universities.
And going on right now, there is a hearing in the House Ways and Means Committee regarding antisemitism and activities on campuses with nonprofit status because obviously Ways and Means looks at tax issues. So this is not something that I think is dying down, and I know many of our institutions are working to support students and figuring out what to do. I know the Department of Education put out some guidance about how universities must respond under Title VI, but I don't think that this is an issue that's going to go away. And I think that we are likely going to see some legislation, especially in the House being offered up, whether it would impact our nonprofit status or whether it would be tied to our funding, our federal funding from the Department of Education. It just seems like something is going to be proposed so that Congress can demonstrate that they're taking action on this issue.
Jon Fansmith: And to that point, Sarah, the Labor-HHS-Education bill in the House that I mentioned, there was an amendment that has been offered, it wasn't voted on by the time they polled it, but that would have denied any funding in the bill. So any student aid funding and research funding through NIH, for instance, from going to institutions that it's a long complicated and very self-contradictory definition, but essentially that allowed an antisemitic expression or action on their campus. So already members of Congress are thinking about this and thinking about ways to do this that institutions are directly impacted by this.
Steven, you can't watch the hearing because we're here. But you and I have talked a little bit about this hearing and certainly the-
Steven Bloom: Yeah, I think absolutely we should be watching for legislation. I was told yesterday that there is a real strong likelihood that legislation will come out of the Ways and Means Committee. What that looks like, what it's going to do, we don't have any idea yet, but the title of the hearing should give you a sense of their angle. It's from “From Ivory Towers to Dark Corners: Investigating the Nexus Between Antisemitism, Tax-Exempt Universities, and Terror Financing."
And when you look at the list of witnesses, it's a credible list of witnesses. I think there's bipartisan concern over antisemitism and as there should be, and I will not be surprised if there's some legislation that comes out of this, as Jon was mentioning in the Deterrent Act we were talking about. And so we are going to have to watch this very carefully, I think going forward.
Jon Fansmith: Yeah. And I reemphasized Sarah's earlier point, this is not partisan. When there was a resolution. Again, resolutions don't really have any direct impact, but when there was a resolution brought forward in the House condemning higher education institutions handling of this, the vote was 336 to 23. So the overwhelming majority of members from both parties voted in support of a public condemnation of how institutions are doing in this regard.
So very much bipartisan, and I think you both have made a point really clear something to be concerned about as we move forward. But speaking of moving forward, Steven, I'm going to stick with you for a second. There's rumblings of maybe some action in the tax space before the end of the year. One of the few things Congress might do besides try to work forward on funding, what's going on?
Steven Bloom: Yeah, right. Very often the way we fortunately do tax policy here in Washington is we wait until the end of the year. There often for years there was a basket of what we called extenders. These were provisions that across the range of policy areas and these provisions would expire, and then there would be lots of people like us and the business community urging that they'd be extended. And so there would be an end of year tax bill that would change the extension, the expiration date on those provisions.
And again, that's the thing that you're starting to hear talk about. Now, the business community is very interested in trying to repeal some provisions that were in the tax reform bill of 2017 related to research and development. And the Democrats are very interested in reviving the child tax credit. That was a very successful expansion in the American Rescue Plan that expired. And so there is energy to do it and an interest in doing it. The question is what's the vehicle?
There was some discussion about the possibility that it would be attached to a CR, which is in itself very unusual because the committees of jurisdiction are very different. But there was that discussion. But now that it looks like that, as we were talking about earlier, the way the CR has been structured now that that vehicle is really gone.
And so the question is there going to be another vehicle and an appetite really to do an end-of-year tax bill? I think it's really to be determined. Will the exhaustion over the government funding debate? Will the attention of what's going on in the Middle East and the desire to do funding for Israel, for Ukraine, and others, will that be the real focus? We'll have to see if there's any real, I guess we would say in Washington, is there oxygen left in the room to actually do this?
Jon Fansmith: Yeah.
Sarah Spreitzer: It's a lot. But Jon, I know before we finish what's going on here in DC, you wanted to touch really quickly on borrower defense because there was some news last week that our institutions are likely following closely.
Jon Fansmith: And I know we had a few questions from the audience about this too. And particularly we've heard a lot about this and for folks who are maybe not familiar, borrower defense is a longstanding provision in the Higher Education Act that allows borrowers who have essentially been misled or defrauded into enrolling in an institution to have the loans they took out to attend that institution forgiven.
It's been a provision that's been there for a long time, very rarely used until recently. And then in particular in the last couple months, we've heard from lots of institutions that they suddenly started getting these batches of 10 or 20 or 30 or 50 borrower defense claims from former students alleging essentially that they had been victims of a significant misrepresentation that induced them to enroll.
And understandably, when they federal agency sends you a form that says one of your former students is accusing you of defrauding them, there was a lot of concern and frankly, the department did not do a great job of explaining to institutions why they were getting those forms. They heard the concerns from institutions and obviously the higher ed community is a great community. A lot of people weighing in not just the associations, the institutions who last week, the Department of Education put out an electronic announcement exactly a week ago today that added additional context helped explain exactly what was happening.
And this all relates to a lawsuit. I'm not going to go into the details here, but it all relates to a lawsuit against the Department of Education, how they were handling borrowed defense claims. Essentially, the department's required to clear a backlog of existing claims. This is a certain group of claims that were filed in the period between June and November of 2022. The department is processing those, so they're sending them to institutions. They're not looking at them to see whether these claims have any merit. They're not making any decisions as the merit, even if they're completely filled out, they're simply forwarding them to institutions as they're required to do under the regulations.
There's a lot more information on there about what are the rights of an institution under the regulations. These are the 2016 regulations for those tracking this, and thank you for posting it producers. I encourage you to take a look at it as we always do. The departments' guidance is certainly important. It is certainly useful, but you should always in these cases, take a look, consult with your counsel, review each claim as it relates to your campus and decide what your individual response would be. In cases like this, it's always best to be a little extra cautious.
So that's what's happening. Again, thanks for the link. I really encourage you, if your campus has been getting some of these claims to take a look at that, it will certainly give you a better understanding of what's happening and help inform how you choose to respond as an institution.
Sarah Spreitzer: So Jon, we only have a few minutes left, but we did get a few questions about the timing of the final Title IX rules around campus sexual assault, and because I think the department originally said they were going to come out in October and it is obviously now November, what can you share on that timing?
Jon Fansmith: Yeah, and you hit the big one, right? The department had said on their unified regulatory agenda, which is essentially their calendar for doing regulations that both the bigger Title IX package around campus safety and sexual assault, as well as the subsequent Title IX package that they did around the participation of trans athletes in sports. Both of those were supposed to have been out in October. It's November 15th. They're not out. The department's clearly not sticking to that schedule.
We don't get the sense, and I don't want to say with any great authority, we know exactly when we'll see those. I will say that across DC, the consensus seems to be this is not something where it might be next week, it might be two weeks from now. Consensus seems to be worth thinking about spring, and there's a few indicators we always get when regulations starting to move. They go to the Office of Management budget at the White House. So there's a few warning signs that tell you that a regulation is being considered or might be heading towards being finalized. We haven't seen any of those around the Title IX rule, so they are certainly not happening in the short term. And again, you're heading into a holiday break. There's some other things happening. The department we've talked about that are significant require a lot of time thinking about the spring is probably the most realistic scenario for when we'll actually see those bills.
Sarah Spreitzer: Yeah. We also had a question regarding hazing legislation that was submitted. I know that's something you and Steven have both worked on with our colleague Anne Meehan. So any outlook on whether or not they'll do any legislation around hazing?
Jon Fansmith: Yeah, and I think you're giving Steven and I way too much credit. Anne's basically done all the work here and I'll say I will relate my understanding of what Anne has related to me. If this is something you're particularly tracking and you haven't already been in contact with her, I would encourage you to do so.
But there is some possibility that we may see a bill on hazing on campus. There's been two bills that have been introduced in multiple previous congresses, and the big difference this year is that those two bills and different constituencies pushing for those two bills have reconciled into one bill. Certainly with the entire advocacy community that cares about this behind that, it adds a little bit of momentum to it. Having a new version, a single bill that covers all the bases, that is something that might give some weight to whether it'll move soon.
We don't know that for a fact. We have at least right now, no indications that it's being considered for markup, but there's certainly a little bit more activity there than you see on some of the other things we've been tracking. So definitely, something we'll be keeping an eye on. If it's important to you, keep falling ACE here and we'll keep you updated.
And speaking of updated, we are now past time, so we really appreciate everyone joining us for the full 45 minutes plus today. Steven, appreciate you coming on and adding your expertise and your sense of humor to this. And Sarah, you're still here, so great.
Sarah Spreitzer: Of course. Of course.
Jon Fansmith: Yeah. Anyway, thanks everyone. Have a wonderful Thanksgiving and we will see you all next month.
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