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Higher Education Policy Update

March 1st, 2017

We are just a month into a new presidential administration and the 115th Congress, but there is a lot on the horizon that might be of interest to the higher education community.

Who are the higher education players in the new Trump Administration?

First, there is the much discussed and debated Secretary of Education, Betsy DeVos. Like many Secretaries of Education before her, Secretary DeVos’ expertise is in the K-12 education reform space and she comes to ED with very little practical experience in higher education administration. It will be incumbent on all who have personal interaction and experience in higher education to inform her and her staff of the priorities to pursue in the years to come. The good thing about a clean slate is that it can be filled with great ideas. We just need to make sure that they are the right ideas for higher education and student borrowers.

However, while there was a lot of press floating around about Secretary DeVos, the confirmation process to fill the Department of Education (and every other administrative agency) is far from over. There are approximately 4,000 jobs in the federal government that are filled by political appointment. Of these, about 1,200 are positions (like Cabinet secretaries, agency directors, and ambassadors) that must be confirmed by the Senate. Of the most high profile 549 positions of President Trump’s Administration, currently only 14 members have been confirmed, 20 are awaiting confirmation and 515 have yet to be nominated.

Some of those still awaiting nomination are the key players who will direct higher education policy for the administration. In total, there are about 150 political appointee positions to be filled at ED. There has been talk that Secretary DeVos will eliminate one of these key positions, the Office of the Under Secretary. In previous presidential administrations, this office oversaw Federal Student Aid, postsecondary education, and career and technical education. This post was held by Martha Kanter and then Ted Mitchell in the Obama Administration, and is currently held by career ED staffer Lynn Mahaffie. DeVos is reportedly thinking about eliminating the Under Secretary, which could shift higher education policy to the Department of Education’s chief of staff and the Office of the Deputy Secretary. Multiple political reports have Josh Venable as a leading pick for chief of staff and Allan B. Hubbard as the pick for Deputy Secretary. Venable is the former national director of advocacy and legislation at the Foundation for Excellence in Education, and an advisor to the Jeb Bush presidential campaign. The good thing for higher education is that Gov. Bush was the only Republican presidential nominee with a fully articulated higher education plan. Whether you liked the Bush plan or not, Venable has likely given some thought to higher education policy. Possible Deputy Secretary Allan B. Hubbard is a former economic advisor to both Presidents Bush and is currently the Chairman of E & A Industries.

In addition, other staffers the Trump administration will rely on to conduct education policy include:

  • Jim Manning, who worked at the Department during the Bush and Obama administrations and led the team at the Department throughout the Trump transition
  • Jason Botel, an education advocate and charter school founder, who has been named the senior White House adviser for education
  • Stanley Buchesky, a former managing partner at the venture capital firm The EdTech Fund
  • Andrew Kossack, the former commissioner of the Indiana Department of Revenue
  • Rob Goad, the education lead on the Trump transition team, appointed to serve on the White House Domestic Policy Council where he will work on education policy
  • Taylor Hansen, who worked for The Center for Education Reform and the Association of Private Sector Colleges and Universities
  • Others announced to be joining the ED team include: Derrick Bolen (former Trump campaign staffer); Debbie Cox-Roush (former Trump campaign/ inaugural staffer); Kevin Eck (former Trump campaign staffer); Holly Ham (former Trump campaign staffer); Ron Holden (Assistant Dean of Students, University of Mount Union); Amy Jones (CEO, Professional Development and Accountability at NY Department of Education); Cody J. Reynolds; (former Trump campaign staffer), Patrick Shaheen (field director for the NH Republican Party); Teresa UnRue (former campaign staffer); Eric Ventimiglia (Constituent Relations Manager, Michigan House of Representatives); Beatriz Ramos (former Trump campaign staffer); Jerry Ward (former Alaska state Senator); and Patrick Young.

There are also a number of career employees leading offices until new appointees are confirmed. Some of these appointees may stay on permanently, or they may be replaced by the administration. They includeJoe Conaty in the Office of the Deputy Secretary; Sandra Battle in the Office for Civil Rights; James Runcie in Federal Student Aid; Kim Ford in the Office of Career, Technical, and Adult Education; and Lynn Mahaffie in the Office of Postsecondary Education and the Office of the Under Secretary.

Finally, Jerry Falwell, Jr., President of Liberty University. has been asked by President Trump to lead a new task force on higher education. The task force will be asked to identify changes to policies and procedures at the Department of Education, and work on eliminating higher education regulations. The other members of the task force, and the exact scope of their work, has not yet been outlined.

Congress:

In addition to the Administration, there is plenty going on in Congress that will impact student borrowers. In this session of Congress there is likely to be a reauthorization of the Higher Education Act (HEA). This reauthorization was due in 2014 and has been extended several times as it waited in the Congressional queue of priorities. With no other major education legislation on the docket, this is likely the year Congress will try to take up HEA. Right now the Senate HELP committee (the Senate Committee with jurisdiction over the HEA) is bogged down with the aforementioned administration nominees and the repeal of the Affordable Care Act. Once those two things move off the docket, they may turn their attention to higher education, which HELP Committee Chairman Senator Lamar Alexander (R-TN) has said is his number one education priority for this session.

Senator Alexander has said that he would like to focus on issues like simplification of the FASFA and elimination of higher education regulations in the reauthorization. He has also proposed that colleges and universities should somehow be responsible for defaulted federal student loans through a risk-sharing or “skin-in-the-game” program, but has not clarified the details of such a proposal.

Congresswoman Virginia Foxx (R-NC-5 ), the chair of the House Committee on Education and the Workforce, has also outlined her priorities for HEA reauthorization. These include, “empowering students and families to make informed decisions,” “simplifying and improving federal student loans,” “promoting innovation, access and completion,” and “deregulation.” Her simplification proposal includes recommendations to streamline the system to a one grant/one loan/one work study federal loan program, and her “empowering students” proposal includes providing annual financial counseling and information on the true costs to attend college.

While no HEA reauthorization has been drafted, a number of pieces of legislation that impact higher education have been proposed in both houses of Congress. If they fall under the purview of the HEA, they will likely be rolled into that bill during a full reauthorization. This would likely include most legislation that relates to higher education unless it is a tax proposal.

The proposed bills most relevant to Salt student borrowers are listed below. We will track these bills and let you know if and when they make their way through Congress.

Student Borrower Related Legislation

  • H.R. 201: Supporting America’s Young Entrepreneurs Act of 2017, which would provide loan deferment and loan cancellation for founders and employees of small business start-ups.
  • H.R. 254:REAL Act of 2017, which would reinstate Federal Pell Grant eligibility for individuals incarcerated in federal and state penal institutions.
  • S. 268: Investing in Student Success Act, which would create a legal structure for the establishment of income share agreements, which allow a business or organization to cover the cost of college for a student in exchange for he/she agreeing to pay a certain percentage of his/her income for a fixed number of years.
  • H.R. 283:Student Debt Repayment Fairness Act,which would amend the Internal Revenue Code of 1986 to allow without penalty any 529 plan distributions used for student loanpayments.
  • S. 405: Stop Taxing Death and Disability Act, a bill to eliminate the tax penalty levied on student loans forgiven for families after the death of their child and those Americans who develop permanent disabilities.
  • H.R. 413: Early Pell Promise Act, which would establish an Early Federal Pell Grant Commitment Program.
  • H.R. 414: Encourage our Educators Act, which would amend the Higher Education Act of 1965 to allow an individual to qualify for both teacher loan forgiveness and public service loan forgiveness.
  • H.R. 480: Student Loan Opportunity Act, which would amend the Internal Revenue Code of 1986 to allow qualified scholarship funding corporations to access tax-exempt financing for alternative private student loans.
  • H.R. 500: Tax Relief for Our Nation’s Heroes Act, which would amend the Internal Revenue Code of 1986 to exclude from gross income any discharge of indebtedness income on education loans of deceased or disabled veterans.
  • H.R. 529: 529 and ABLE Account Improvement Act of 2017, which would make improvements in the rules related to qualified tuition programs and qualified ABLE programs.
  • H.R. 615: Student Loan Repayment Act of 2017. which would amend the Internal Revenue Code to include student loan repayers as members of targeted groups for purposes of the work opportunity credit and to provide for a credit against tax for student loan program startup costs.
  • H.R. 675, the Empowering Parents to Invest in Choice (EPIC) Act, which would amend the Internal Revenue Code of 1986 to expand the coverage of qualified tuition programs and increase the limitation on contributions to Coverdell education savings accounts.
  • H.R. 716: Enhancing Educational Opportunities for all Students Act, which would amend the Internal Revenue Code of 1986 to encourage the use of 529 plans and Coverdell education savings accounts.
  • H.R. 758: the GI Internship Program Act, which would “offer veterans the option to receive their Post-9/11 GI Bill benefit as a stipend to complete a career transition internship with a qualifying business.”
  • H.R. 795: Employer Participation in Student Loan Assistance Act, which would amend the Internal Revenue Code of 1986 to extend the exclusion for employer-provided educational assistance to employer payments of qualified education loans.
  • H.R. 813: the ACCESS Act, which would restore access to year-round Pell Grants.
  • H.R. 823: Expand American Educational Opportunity Act of 2017, which would extend and modify the American Opportunity Tax Credit
  • H.R. 999: Helping Families Save for Education Act, which would amend the Internal Revenue Code of 1986 to expand access to Coverdell education savings accounts.
  • H.R. 1127:Student Loan Fairness Act of 2017, which would cap interest rates on federal student loans and allow eligible borrowers whose student loan debt exceeds their income to convert their private loans into Direct Loans.
  • H.R. 1193: Financial Literacy to Financial Freedom Act, which would amend the Higher Education Act of 1965 to authorize institutions of higher education to provide additional loan counseling.
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