Register for Thursday’s Webinar Now!

Texas 5th Circuit Appellate Court Grants CCST’s Request For Preliminary Injunction and Remands BDR Litigation Back to District Court & Department Announces New FVT/GE Topics Page and FAQs to End Last Week

Biden Administration Start This Week Off with Flurry of Announcements & Wednesday Will Be An Important Day On Capitol Hill

Overview
Don’t blink or you might miss something! Here is a recap of several important things you most definitely need to be aware of from the end of last week, yesterday, and tomorrow.

Career Colleges and Schools of Texas Granted Preliminary Injunction By Appellate Court
In the early evening hours of last Thursday, April 4^th, news began to rapidly circulate on the United States Court of Appeals for the Fifth Circuit’s reversal of the district court’s decision denying The Career Colleges and Schools of Texas’ (CCST) for a preliminary injunction. In the conclusion of the fifty-seven page decision (www.ca5.uscourts.gov/opinions/pub/23/23-50491-CV0.pdf) by the panel of three judges, the brief written by Judge Edith Jones on behalf of the panel stated:

CCST has met the criteria to satisfy a preliminary injunction, and the district court erred by concluding that CCST faced no irreparable harm. We REVERSE the district court’s judgment, REMAND, and instruct the district court to postpone the effective date of the borrower-defense and closed-school discharge provisions of the Rule pending final judgment as specified above. The stay pending appeal remains in effect until the district court enters the preliminary injunction.

STAY PENDING APPEAL MAINTAINED PENDING ENTRY OF PRELIMINARY INJUNCTION, CASE REVERSED AND REMANDED.

While the quote that was picked up and widely circulated by the media on Friday from the appellate judges’ ruling was, “Not only do we disagree with that finding, but we assess a strong likelihood that the plaintiffs will succeed on the merits in demonstrating the Rule’s numerous statutory and regulatory shortcomings,” the entire document is filled with repeated statements from Judge Edith Jones challenging the Department’s ability to defend the legality and regulatory authority to proceed with the revisions contained in the Final Rule and/or enforce the most recent regulations.

Cutting the chase, what this means is that the prohibition on use of the new BDR Final Rules remains in effect while the underlying litigation is sent back to the district court to hear the full pleadings on the merits and a final judgement is made. In the meantime the U.S. Department of Education must continue to use the prior/existing BDR regulations and guidance from specific court decisions in the determination of BDR claims for all institutions of higher education.

New Financial Value Transparency and Gainful Employment Topics Page and Updated FAQ Announced
Building upon the Friday, March 29^th posting of Electronic Announcement (GE-24-01) (fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2024-03-29/timeline-financial-value-transparency-and-gainful-employment-reporting-requirements) entitled “Timeline of Financial Value Transparency (FVT) and Gainful Employment (GE) Reporting Requirements” and Dear Colleague Letter (GE-24-04) (fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2024-03-29/regulatory-requirements-financial-value-transparency-and-gainful-employment) entitled “Regulatory Requirements for Financial Value Transparency and Gainful Employment,” last Friday, April 5^th the Department published Electronic Announcement (GE-24-02) (fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2024-04-05/financial-value-transparency-and-gainful-employment-topics-page-and-faqs-now-available) entitled “Financial Value Transparency and Gainful Employment Topics Page and
FAQs Now Available.”

CSPEN encourages all institutions to review the initial list of FAQs (fsapartners.ed.gov/knowledge-center/topics/financial-value-transparency-and-gainful-employment-information/frequently-asked-questions) which are grouped into the following categories:

General [G]
Debt to Earnings Rates [D/E]
Earnings Premium [EP]
Warnings [W]
Disclosures and Acknowledgements [DA]
Reporting [R]

In the introduction of the FAQ it states, The listing of FAQs will be updated periodically and include the date of the update. New and/or updated questions and answers will be marked NEW or UPDATED. If you have questions that have not been addressed, please submit them to the FVT/GE Questions mailbox at GE24@ed.gov (mailto:GE24@ed.gov) and include the name and OPE ID number of the institution.”

CSPEN will provide more details on the FAQs week after next during our next Federal Legislative & Regulatory Update webinar.

Biden Administration Promotes New Student Loan Debt Relief Plan Before NPRM Is Even Published
Yesterday the Biden-Harris Administration issued a Press Release (www.ed.gov/news/press-releases/biden-harris-administration-announces-new-plans-deliver-debt-relief-tens-millions-americans) and shared an email detailing “a new set of plans that would provide student debt relief for tens of millions of borrowers across the country. The plans would bring the total number of borrowers eligible for student debt relief to over 30 million, including the 4 million borrowers who have already been approved for debt cancellation by the Biden-Harris Administration over the past three years.”

The plan that the Administration is referring to is the pending regulatory revisions deliberated as part of the 2023-2024 Federal Negotiated Rulemaking by the Student Loan Debt Relief Committee. Proposed regulations (RIN: 1840-AD93 (www.reginfo.gov/public/do/eoDetails?rrid=464212) ) that as of yesterday were still pending review by the White House under the Executive Order 12866 process.

The package of proposed revisions intended to were submitted to the White House on March 26, 2024.

As you may recall, the negotiations were intended to develop proposed regulations related to section 432(a) of the HEA, which relate to the modification, waiver, release, or compromise of Federal student loans by the Department. Following three two-day negotiating sessions in October-December of 2023 and a fourth session conducted in February of 2024, the Student Loan Debt Relief Committee negotiators failed to achieve consensus on the vast majority of a twenty page document. While opposing many of the major proposals sought by the Department, the non-federal negotiators did offer full support (consensus) on portions of 34 CFR PART 30—DEBT COLLECTION: Subpart G – Waiver of Federal Student Loan Debts and § 682.403 Waiver of FFEL Program loan debt. The specific sections in which consensus were achieved included:

Subpart G– Waiver of Federal Student Loan Debts
§ 30.80 Waiver of Federal student loan debts.
§ 30.84 Waiver when a loan is eligible for forgiveness based upon repayment plan.
§ 30.86 Waiver based upon Secretarial actions.
§ 30.87 Waiver following a closure prior to Secretarial actions.
§ 30.88 Waiver for closed Gainful Employment programs with high debt-to-earnings rates or low median earnings.

§ 682.403 Waiver of FFEL Program loan debt.
(b) Determination of qualification for a waiver by the Secretary.
(2) Closed school discharge.
(3) Cohort default rate. failed to achieve consensus on the

The sections listed above where consensus was achieved will be included in the NPRM as drafted during the negotiations. All other sections of the NPRM are open for the Department and White House to offer proposals based upon their intent. And it appears that the Biden-Harris Administration and the Department are already foreshadowing what will be in the NPRM…

In email released first thing yesterday morning stated:

“The public will have an opportunity to comment on these plans in the coming weeks. The plans announced by President Biden are the next step in a regulatory process that began last summer to provide debt relief to as many borrowers as possible as quickly as possible under the Higher Education Act. You can read more about the proposals in our press release, but they would permit the following waivers:

Waiving accrued and capitalized interest for millions of borrowers
Automatically discharging debt for borrowers otherwise eligible for loan forgiveness under SAVE, closed school discharge, or other forgiveness programs, but not enrolled
Eliminating student debt for borrowers in repayment for 20 years or more
Helping borrowers who enrolled in low-financial-value programs or institutions
Assist borrowers experiencing hardship paying back their loans”

Well, at least we know a bit more about the pending NPRM, as the President and Department not only released this information yesterday, but he also highlighted it as part of a presentation at a community college in Wisconsin on Monday too.

CSPEN will notify the community when the submission is sent back from the White House to the Department and will be on the look out for its publication in the Federal Register, which by all indications will begin “in the coming weeks.”

What’s Ahead
Two Important Congressional Hearings Both Taking Place Tomorrow
As previously reported last Wednesday and shared in greater detail on last Thursday’s CSPEN Federal Legislative & Regulatory Update webinar, tomorrow, the U.S. House of Representatives will host two hearings vitally important to the higher education community.

At just after 10 AM ET, both the Labor, Health and Human Services, Education and Related Agencies Appropriations Subcommittee and the House Committee on Education & the Workforce’s Subcommittee on Higher Education and Workforce Development will be hosting key hearings related to higher education.

In the Appropriations Subcommittee hearing, Secretary of Education Miguel Cardona is slated to provide a summary of President Biden’s Fiscal Year 2025 Budget request. While Secretary Cardona’s presentation will cover the entire Education Budget proposal, the Secrtary will most assuredly be called upon to answer questions regarding key higher education topics including but not limited to the failure to respond to requests for information on a range of student loan issues, concerns with the continued issues related to the launch of the new Free Application for Student Aid (FAFSA), as well as key funding requests included within the request. Individuals interested in watching the hearing live can log on tomorrow at this
YouTube channel (appropriations.house.gov/legislation/hearings/budget-hearing-fiscal-year-2025-request-department-education) .

Simultaneous to the Secretary’s presentation and Congressional queries, Chairman Burgess Owens (R-UT) and Ranking Member Frederica Wilson (D-FL) will be hosting a hearing specifically on the troubled implementation of the FAFSA Simplification Act and the development, publication, and on-going problems related to the new FAFSA and the processing of student aid eligibility. Individuals interested in watching the hearing live can log on tomorrow at this YouTube channel (www.youtube.com/@EdWorkforceCmte/streams) .

What’s After That
CSPEN will share updates of both hearings on Thursday and Friday, and provide any additional updates on the Student Loan Debt Relief NPRM as it makes its way back over to the Department of Education from the White House and ultimately is sent to the Federal Register for public notice and comment. However, we are on the road on Thursday presenting at the Financial Aid Servicing & School Software (FAS) Spring Seminar: Navigating through a Sea of Change, so we will not be hosting a Federal Legislative & Regulatory Update webinar this week.