Federal Update - October 2

October 2, 2024

GOVERNMENT RELATIONS HIGHLIGHTS

FSA Enforcement Bulletin: The Department published an Electronic Announcement informing Title IV institutions and third-party servicers of examples of conduct that may lead to a substantial misrepresentation.



FAFSA: The House Education and Workforce Committee held a hearing titled, “GAO Uncovers Biden-Harris FAFSA Failures” which addressed the ongoing challenges to implement the 2024-25 Free Application for Federal Student Aid (“FAFSA”).

Title IX: The Department Office for Civil Rights released two new resources to help schools comply with the newly effective Title IX Regulations.

FSA ENFORCEMENT BULLETIN

What You Need To Know

The Department published an Electronic Announcement informing Title IV institutions and third-party servicers of examples of conduct that may lead to a substantial misrepresentation. The Department stated that it has observed conduct that could rise to the level of an actionable substantial misrepresentation and, therefore, issued this bulletin to aid schools in compliance efforts. It provides examples of the conduct it has seen which may result in non-compliance.

Why This is Important

The Department is monitoring complaints, tips, lawsuits, and borrower defense to repayment applications from students, faculty, and staff alleging that institutions and third-party services may have made substantial misrepresentations. Institutions should refrain from engaging in the conduct described in the bulletin in order to avoid potential claims of substantial misrepresentations.



For more information:

Department Guidance

FAFSA

What You Need To Know

The House Education and Workforce Committee held a hearing titled, “GAO Uncovers Biden-Harris FAFSA Failures” which addressed the ongoing challenges to implement the 2024-25 Free Application for Federal Student Aid (“FAFSA”). The hearing coincided with the U.S. Government Accountability Office’s (“GAO”) release of its preliminary findings reviewing the rollout of the 2024-2025 FAFSA. The GAO report addressed the following,

This GAO testimony (1) describes the delays in delivering on FPS requirements; (2) describes the defects that were identified before and after FPS deployment; (3) assesses the extent to which disciplined systems acquisition practices were used to manage FPS requirements, conduct systems testing, and carry out independent acquisition reviews; and (4) assesses the extent to which Education and FSA IT leadership provided oversight of FPS development. This statement is a companion to GAO’s related statement on the simplified FAFSA rollout (GAO-24-107407).

The Committee hearing featured Members from both sides of the aisle expressing concern and outrage from the results of the GAO report.



The hearing follows the Department’s letter to all institutions of higher education providing an update on the progress with the 2025–26 FAFSA and its white paper titled, “A Focus on Improving the FAFSA® Experience: Updates, actions, and a path forward for the 2025–26 cycle.” 

Why This Is Important

The failed FAFSA rollout has impacted many of our member institutions as was shared with the Department in various listening sessions and through the Request for Information (“RFI”). This report and hearing is important as the Department continues to prepare for the release of its 2025-26 FAFSA in the upcoming months.

For more information:

GAO Summary

GAO Report

White Paper

BDR LAWSUIT

What You Need to Know

In United States Department of Education v. Career Colleges and Schools of Texas, the Supreme Court granted the Department’s request to extend the timeline from September 10, 2024 to October 10, 2024 for the Department to file a petition for the Supreme Court to review the Fifth Circuit’s previous decision. The Fifth Circuit Court of Appeals entered its decision on April 4, 2024, denying a rehearing on the granting of the preliminary injunction. 

Why This Is Important

The Supreme Court is the last appeal option for the Department to attempt to reverse the preliminary injunction. If the Department decides not to file an appeal, the case will return to the District Court for further proceedings.

For more information:

Supreme Court Docket

TITLE IX RESOURCES

What You Need To Know

The Office for Civil Rights released two new resources to help schools implement the new Title IX Regulations. The resources provide guidance on Title IX coordinator responsibilities, as well as prohibitions on sex discrimination based on pregnancy or related conditions and parental, family, or marital status.

The two new Title IX resources are as follows:

(1) 2024 Title IX Regulations: Impact on Title IX Coordinator Duties, which highlights new and updated requirements for Title IX coordinators, who play a critical role in ensuring compliance with their schools’ Title IX obligations.

(2) 2024 Title IX Regulations: Nondiscrimination Based on Pregnancy or Related Conditions & Parental, Family, or Marital Status, which clarifies prohibitions on sex discrimination on these bases for students, employees, and applicants for admission or employment. 

Why This Is Important

The amendments to Title IX Regulations went into effect on August 1, 2024. The Department is currently enjoined from enforcing the 2024 Final Rule in twenty-six states.

For more information:

Department Press Release

NATIONAL DEFAULT RATE BRIEFING FOR FY 2021

What You Need To Know

The Department published the National Default Rate Briefing for FY 2021. The rates were sent to the SAIG mailbox for each institution and included a cover letter and CDR report. Any school that did not have a borrower in repayment, during the current or any of the past cohort default rate periods, did not receive an FY 2021 official CDR notification package.

Default rates were impacted by the pause on federal student loan payments that began March 13, 2020, and ended on September 30, 2023. Some schools have a small number of student loan borrowers entering repayment and other schools had only a small portion of its student body take out student loans. As such, the Department warned that the CDR should be interpreted with caution.

Why This is Important

The Department publishes cohort default rates based on the percentage of a school’s borrowers who enter repayment on Direct Loan Program loans during a federal fiscal year (October 1–September 30) and default before the end of the second following fiscal year.

For more information:

Briefing on FY 2021 CDR

CYBERSECURITY NPRM

What You Need To Know

In its 2024 Unified Agenda of Regulatory Actions, the Department has indicated plans to publish a Notice of Proposed Rulemaking (“NPRM”) on Cybersecurity Standards for Institutions of Higher Education. The rule is likely aimed at ensuring that institutions properly protect Controlled Unclassified Information (“CUI”), as schools routinely process, store, and transmit CUI, which includes sensitive information.

Why This Is Important

The NPRM will include regulations that institutions must comply with in handling of financial aid information, and other sensitive information. 

For more information:

Spring 2024 Unified Agenda of Regulatory and Deregulatory Actions