HOUSE INTRODUCES COLLEGE AFFORDABILITY ACT
On October 15, 2019, Bobby Scott (VA-03), Chair of the U.S. House of Representatives Committee on Education and Labor, introduced the Democratic proposal for Higher Education Act reauthorization, the College Affordability Act, H.R.4674. The Chairman’s press releases explain that the bill seeks to amend and strengthen the Higher Education Act of 1965 so that “students can spend less and earn more.”
In particular, the Public Service Loan Forgiveness (PSLF) program would be improved and expanded. Eligibility for PSLF would be broadened to further incentivize careers in public service. PSLF implementation would be improved. An appeals process would be created by the Department of Education to help borrowers dispute denials of PSLF applications. Moreover, borrowers who were in the wrong payment plan would be able to count their original monthly payments toward the total required for loan forgiveness.
Changes would be made to school accreditation. Certain higher education oversight duties would be reassigned from the accreditors to the states. Accreditors would be required to focus on student achievement outcomes, including completion and workforce participation.
The bill would provide stronger wraparound services, including improved financial counseling to keep students in school and on track to graduate.
The House Committee on Education and Labor has not announced a schedule for considering the bill.
NPR Publishes Article on PSLF Administration
On October 17, 2018, National Public Radio (NPR) published an article regarding PSLF administration. The article focuses on Seth Frotman’s departure from the CFPB and the findings that his team there had discovered related to PSLF administration. These problems are similar to what the GAO study and U.S. Department of Education data found with the program.
Congressional Inquiry about PSLF
On October 17, 2018 over 150 Democrats sent a letter to Education Secretary Betsy Devos to turn over more information regarding the Department’s handling of the PSLF program. Led by Ranking Member Bobby Scott, House Committee on Education and the Workforce and Ranking Member Patty Murray, Senate Committee on Health, Education, Labor, and Pensions, the letter follows the release of a new Government Accountability Office report which showed that many PSLF borrowers had been denied loan forgiveness.
New PSLF Class-Action Suit
On October 3, 2018, student loan borrowers in public service professions filed a federal class-action suit alleging that student loan servicer Navient systematically misrepresented, pedaled untruths, and misdirected borrowers in order to stop them from enrolling in Public Service Loan Forgiveness and to boost Navient’s own profits.
GAO Report on PSLF
On September 27, 2018, the Government Accountability Office (GAO) issued a report announcing that, “Education Needs to Provide Better Information for the Loan Servicer and Borrowers.” The report established that 1,173,420 borrowers requested to certify their employment and loans as eligible for PSLF and 890,516 had their employment and loans certified as eligible. However, of 19,321 borrowers who have ultimately submitted a loan forgiveness application, only 55 or 0.28% were granted loan forgiveness to date. ED concurred with each of GAO’s recommendations and outlined plans to implement them. Prompted by the report, the coalition supporting PSLF plans questions for ED.
PSLF Court Arguments in ABA Suit
On September 26, U.S. District Court for the District of Columbia Judge Timothy Kelly heard motions for summary judgment and for preliminary injunction in the law suit filed by the ABA over the U.S. Department of Education’s (ED) regulations regarding the Public Service Loan Forgiveness (PSLF) program. The judge’s questioning focused on whether ED’s actions amounted to final agency action under the two-pronged Bennett v. Spear test established for the Administrative Procedure Act. The judge recognized that the U.S. Supreme Court has directed consideration of the practical implications of agency actions and consequent hardships on plaintiffs. The government argued that any hardships on plaintiffs were the result of contractor mistakes in preliminary certifications of annual qualification determinations for PSLF eligibility and they did not amount to final agency actions. Chong Park, attorney for the law firm Ropes & Gray handling the case pro bono for the ABA, maintained that ED’s actions bore the hallmarks of final agency action.