Jon Fansmith: All right, well, we are going to go ahead and get started. Welcome, everyone. This is the April edition of dotEDU Live. I am your host, Jonn Fansmith, from the American Council on Education’s Government Relations team, and I am joined by my amazing co-host, Sarah Spreitzer. Hey, Sarah.
Sarah Spreitzer: Hey, Jon. Wow, amazing. That’s impressive. I don’t know if I’m actually working on anything amazing right now, but our weather in Washington, DC is amazing. Our one week of good weather that we get in DC. I hope people are doing their advocacy days on the Hill this week because it is very, very lovely outside.
Jon Fansmith: It is lovely. Much lovelier outside than inside, given everything that’s been going on over the last few weeks, which I know we’re going to dig into in a second. But it’s lovely in part because it’s spring break time, right? And Congress is now back from spring break and they’ve got a lot going on, right, Sarah?
Sarah Spreitzer: Yeah, and to be those eighth grade field trips that are sitting in the House Gallery this week watching what’s playing out. I’m predicting that we’re going to be thrown into a bit of chaos here, at least with the House of Representatives. And obviously they just got back this week. They’re trying to pass aid packages for Ukraine, Israel, Taiwan, a host of other issues, and I think the speaker is going to be somewhat stymied in getting that through this week, but what are you thinking?
Jon Fansmith: Yeah, I’m with you on that. It looks like, at least on the House side, they have a very complicated process for trying to move foreign aid and a lot of uncertainty. And the fact that the introduction of the approach raised calls about unseating the speaker is maybe not a good sign about the likelihood of success here. We’ll find out, of course... Somebody just pointed out in the chat, and sorry if I missed the name, but any of these votes will probably rely heavily on Democratic votes, but that will actually make it far harder for the speaker to retain his job if he’s passing legislation that’s primarily supported by Democrats. Anyway, a very chaotic time and especially when we are in a presidential election year. And generally what you tend to see in these kind of years is that by June things start slowing down dramatically, by July they’re real slow, and by August it turns to full-on campaign mode, and members head out of town, and we don’t really hear a whole lot until after the November elections.
But in terms of what Congress is doing, that’s maybe fiscal year ‘25 funding is on the table. But they finished that in March of this year, so I don’t know the urgency to get that done by their deadline of October 1st, Sarah. What else?
Sarah Spreitzer: They finished 2024 funding, so they’re just starting the 2025, right?
Jon Fansmith: Right.
Sarah Spreitzer: They also have to pass the National Defense Authorization Act, or the NDAA, and of course what we’re hearing is that it’s already being considered a vehicle for everything that they want to pass this year. They want to try and get that done by October.
But I think Congress is also dealing with some really important issues that they’re going to have to address. So like last week we saw a hearing on the FAFSA and some of the issues that are impacting our campuses as the Department of Education is rolling out the new FAFSA process. I think it was an interesting hearing. I think there’s a lot of frustration on both sides of the aisle with the Department of Education, and I know that we hear about it from our institutions, but what are you hearing on FAFSA?
Jon Fansmith: Yeah, I mean we can start at the hearing ‘cause I thought that was interesting and talk a little bit about where FAFSA stands right now, and certainly I know the audience we’re speaking to is probably thinking about this more than almost anything else. Certainly when I talk to college presidents or I talk to other folks, it’s FAFSA is 1A and everything else is far below in terms of concerns.
The hearing was interesting, right? It was called the FAFSA Fail, so it gives you a sense of the tenor going in. It also didn’t feature anyone from the Department of Education testifying as to what they’re working on. One of the witnesses was a friend of the webinar and our podcast, Justin Draeger, the president of the National Association of Student Financial Aid Administrators.
To your point, Sarah, both sides, Democrats and Republicans, were pretty uniformly upset with what’s going on. The degree of frustration and where the blame was being laid differed by party. Republicans really focused in a lot on the Biden administration student loan forgiveness proposals, under the idea that perhaps the Federal Student Aid office was spending way more time on forgiveness than they should have been doing on FAFSA. That’s a line of attack we’ve seen multiple times coming into this hearing.
But when the hearing ends with kind of a spirited discussion among the panelists and the members of Congress about who should be fired as a result of this, it gives you a pretty clear sense of what the mood not just of Congress is but the public is around the FAFSA implementation. And for good reason.
The reason schools are concerned is it is not going well. We’ve seen delay after delay. There was a delay in getting the form up until December 30th. There was a delay in getting the information out to campuses until middle of March.
And then when the information started coming out, as we’ve learned in the last couple weeks from announcements from the Department of Education, the process has been rife with errors. The Department of Education said that 20 percent of the roughly 6.8 million FAFSA forms that they processed, 20 percent of those had incorrect tax data from the IRS. You add to that another 10 percent, different 10 percent, of those applications had issues related to how the Department of Education was calculating student aid eligibility, generally around student assets. And those miscalculations tended to make students look like they were eligible for more aid than they actually were.
And then the final thing is we know that there is a significant amount of applicant errors. The kinds of things when somebody fills out the form, they enter their address wrong or they don’t put a signature in the right place, things that are generally pretty minor and easy to correct in previous years. Currently there’s a delay in getting that work done. They just announced that they’re going to be able to start allowing students to start fixing mistakes on that, but the estimates are as high as 20 percent of the applications have those kinds of errors.
So you put all that together, we’re the middle of April, a large percentage of the forms are incorrect, will need to be reprocessed. It’s putting institutions and students in a terrible place, and that’s why Congress is frustrated. That’s why the public’s frustrated. That’s why students and their families and campuses are frustrated. The department just has not done a good job of managing this process.
Sarah Spreitzer: And, Jon, we just recently did a timeline, which I think our producers will drop into the chat, but it is interesting starting in December, which already put us, what? Two or three months behind? Institutions were told that they’ll get the information out as soon as possible, and then it’s been kind of like one step forward, two steps back. And so we’re now reaching enrollment season, and I think institutions are very concerned about the enrollment numbers that they’re seeing based on the fact that they’re unable to get the aid packages out. I know the Department of Education put out further guidance this week. Was there anything new in that information that they released?
Jon Fansmith: I mentioned the fact that they are allowing now for the students’ corrections to happen, their system can allow for that, so that’s good.
But you mentioned this: concerns about enrollment. We didn’t really talk about that, but that is the crux of all of this, right? The goal of FAFSA simplification was to help low-income students more easily access federal financial aid. The goal was to provide more aid to more students and make it easier for students to apply. And the numbers we’re seeing right now have us very, very concerned about what the enrollment impact will be going into the next academic year.
According to data from our friends at NCAN, applications from current high school students for the FAFSA, FAFSA applications are down 27 percent from where they were at the same time last year. Maybe more troublingly, completed applications are down 40 percent from where they were last year. Some of this is obviously frustrations with the issues, the technical glitches in the problem, the delays in being able to access the form at the beginning of when it was open. But when you are talking about 40 percent fewer completed applications this far into the admissions cycle, it’s a really bad indicator.
And then when you think about the fact that, of course, people applying for the FAFSA are disproportionately people with financial need, the categories of students we have the hardest time getting to enter postsecondary education in the first place, students who are understandably most reluctant about their ability to afford higher education, these numbers are very troubling.
Sarah, you and I have talked about this. We’ve talked about this internally at ACE. We were thinking about what might the impact be and putting it in terms of the pandemic, where we saw meaningful drops in low-income student enrollment, enrollment by students of color, first-generation students.
I think now as we look at the numbers, barring some late surge in applications by students. I know there’s a lot of great efforts underway if on your campus you are able to facilitate those efforts, we certainly encourage you to do so. We’re looking to partner with other organizations and promote that. But, again, we are mid-April and we’re hoping for a late surge to try and balance out some of this. Overall, the numbers are very grim looking for what we might see in terms of enrollment, but especially enrollment of those students we’re most concerned about getting into higher education.
Sarah Spreitzer: So, Jon, since you watched that hearing last week, were there any specific things that members were calling for or that any kind of solutions that they were proposing?
Jon Fansmith: I did not watch the hearing, Sarah.
Sarah Spreitzer: Oh, sorry.
Jon Fansmith: So thanks for putting me on the spot about that. No, that’s okay. That’s okay. I probably should have watched the hearing at some point between then and now. But there’s been a bunch of things that have been talked about, but one of the limitations here is there’s not necessarily a quicker easy statutory fix for this. The department just needs to do it right and do it right consistently over a period of time.
Now, there are some things the department has said that schools that received incorrect information on their ISIRs could be held harmless if they processed aid offers based on that information. There’s a lot of different views on what that means. I think there’s a lot of reluctance to accept that a statement from the department that’s not backed up by regulation or statute is all that meaningful, especially with the possibility of a different administration being in charge next year.
So certainly things that Congress could do to help would be to give statutory exemption or allow for an expanded use of professional judgment by institutions who have gotten incorrect information, are trying to process, trying to meet student needs and timelines. That’s the kind of thing Congress could do that would be helpful.
We’ve also heard in some quarters the idea that if we are going to see the kinds of enrollment declines that we’ve seen as a direct result of the mis-implementation of this process, then maybe there’s a way to provide relief to some of those institutions who, especially when we look at lower-resource institutions or tuition-dependent institutions, significant declines in enrollment can be catastrophic for institutional revenue.
So there are things that are being discussed. The problem is, of course, this is happening in real time. We’re already well into a crisis stage. Congress doesn’t always move especially quickly. The clock is ticking and things aren’t moving in that direction yet. We’re behind the curve to get things addressed. So right direction, but will it be soon enough? Who knows? Doesn’t look like it at this point.
Sarah Spreitzer: Well, Jon, while you weren’t watching the FAFSA hearing. I was watching the secretary of education testify before House Appropriations on the FY 25 budget request, and obviously FAFSA did come up. I thought one of the interesting questions was last week the Department of Education also proposed a new loan forgiveness program, and so one of the questions was, are there being people pulled off of working on FAFSA to work on the new loan forgiveness program and how are those related? I think a lot of concern from not just the authorizers but the appropriation committee too about FAFSA. So I think this is going to be continuing to be an issue for Congress.
Jon Fansmith: Yeah, maybe let’s stick with the loan forgiveness proposal for a second here too because just today, actually, the department released the regulatory text for four of the five categories of loan forgiveness relief that they’re proposing. And let’s talk about that because I think that’s interesting to go through.
But before we do, the department didn’t do themselves a whole lot of favors. This hearing on FAFSA and on appropriations took place last Wednesday. Last Wednesday morning. The department announced that they were moving forward with this expanded loan forgiveness approach that preceding Monday. So if you were already concerned, and certainly many of the Republicans and some of the Democrats on the committee were, that the department’s focus had been taken away from FAFSA and towards loan forgiveness, announcing a massive new regulatory package around loan forgiveness was not great timing.
The department steadfastly denies that any resources or staff time was taken away from FAFSA implementation to facilitate loan forgiveness. I can’t speak to how valid that is, but certainly they deny it. But announcing a massive new expansion at the same time that FAFSA is imploding around you is just a difficult, difficult public look.
That said, the forgiveness pieces are interesting, right? This in many ways is the fallout from the $20,000, $10,000 student loan relief that had been proposed by the Biden administration for all borrowers that the Supreme Court shot down last June. What the department did was they went through a formal rulemaking process and they identified five categories of borrowers that they wanted to help. And their proposal is about 30 million borrowers will receive some form of relief, either up to $20,000 in interest that has accumulated on loans being forgiven or, in a number of cases, full forgiveness of their loans.
And really the goal here was to target borrowers that they thought were experiencing difficulties that were sort of above and beyond the norm for repayment. So people who have been paying off their loans but have seen the interest grow larger than the original principle they borrowed. People who have been paying off their loans for 20 years but haven’t—undergraduate only for 20 years and graduate loans for 25 years—and haven’t been able to pay off their loans. People who were in what the department is calling “low-financial-value programs,” which generally as the, and I’ve only looked sort of briefly at the regulations, looks to be programs that closed precipitously or closed early or fell under various categories that said they were shut down because of low performance or bad outcomes for students. The final group of people that they announced today was... Now I’m blanking on what the fourth one was. It’ll come back to me.
But the one that they didn’t announce, the fifth category, which I think was the most interesting one, the one I was most interested in seeing, was borrowers experiencing financial hardship. And there’s a lot of, in the rulemaking they went through a lot of different ways of how you define that somebody is in financial hardship, and it might be debts, medical debts or other kinds of debt that they have relative to their earnings, issues around earnings, things like that. So that will come later. Those regulations themselves won’t be released for a few more months.
But the administration here clearly pushing very hard on loan forgiveness, trying to make sure that people understand that they are fighting this fight. All of their announcements around this point out that they have now, ignoring what they’re proposing to do here, they’ve now forgiven over $153 billion of federal student loans to over 4.6 million people. And of late when they’ve been announcing the forgiveness initiatives, borrowers get an individual email from Joe Biden saying, “your loans have been forgiven.” So it’s clearly a point of emphasis, not just for the Department of Ed here but for the Biden administration to lean in very heavily on providing loan relief. And this is just the latest and, in many ways, the biggest step they’ve taken towards that.
Sarah Spreitzer: And we’ve talked a lot about how everything this year is in the lead-up to the election, and obviously President Biden’s large-scale forgiveness was blocked by the courts. Do you think this plan is likely to be blocked? I didn’t look to see what authority they’re using to forgive the loans, but obviously this is an expansion. Do you think that anybody’s going to try and block it? Obviously Republicans are likely not going to be very happy with it.
Jon Fansmith: Yeah, congressionally at least I’m sure that there will be an effort to do a Congressional Review Act amendment, which is, for people who don’t track these things, it’s a way for Congress with both chambers agree to strike a regulation so long as the CRA, Congressional Review Act, legislation is introduced in a timely manner, so 90 business days from when the regulation’s finalized. They did that on previous regulations. They don’t succeed and they would also have to go to the president’s desk for a signature, so that would kill it. It’s usually done in the gap time between new administrations.
Courts? Absolutely. I think courts will, I think there will be, we’ve already seen a number, particularly governors or attorneys generals of certain states, forming coalitions to try and block some of these Biden administration regulations. Given the scope and scale, the department estimates up to about 30 million borrowers may get some form of forgiveness. I absolutely expect there will be court challenges.
Now, the department’s justification when they did it the last time, they said that they had essentially emergency powers because of the pandemic, and they were using authority under a bill called the HEROES Act that would’ve allowed them to use emergency authority to make the loan forgiveness.
Now they’re saying essentially there’s a section of the Higher Education Act that allows the secretary to amend or waive or make changes to existing loans. That is the authority they are citing to do this under.
Again, that provision I think is the subject of a lot of debate as to whether it actually gives them that much authority to do this. We’ll see, right? It’ll depend on the courts, and of course the current Supreme Court has a very narrow view of executive actions on a broad scale, so if it were to get to that level, I think we can guess what the outcome would be. But, again, a lot of this is the Biden administration pushing and trying to get this done and trying to demonstrate to constituencies they care about that this is a priority of theirs.
Sarah Spreitzer: So, Jon, beyond FAFSA and the loan forgiveness programs, what else is the House worried about within the world of higher education? There’s a hearing tomorrow that a lot of people are talking about that I think a lot of people will be watching. You want to talk a little bit about that hearing?
Jon Fansmith: Yeah, and I’m curious for your thoughts too, Sarah, on this because this is, behind FAFSA, probably the thing that’s most talked about in our world these days. And Sarah was referring to tomorrow the House Education and Workforce Committee will be holding a hearing called “Columbia in Crisis: Columbia University’s Response to Antisemitism.” And they will be bringing in the president of Columbia as well as the co-chairs of their boards of trustees to testify about how Columbia’s leadership has managed incidents of antisemitism or anti-Arab or anti-Muslim discrimination on the campus. Although I think they’re really actually just very focused on antisemitism in this case.
We saw what happened on December 5th. That was a very adversarial hearing. It led to two of the presidents involved resigning. I think everybody knows that. I think a reasonable person would say that what we expect to see tomorrow is what we saw on December 5th, another hostile adversarial hearing. Certainly Chairwoman Foxx’s statements in advance of the hearing indicate that they’re going to take a very aggressive approach to Columbia.
I’ll just be candid. I think that’s in some ways a little bit frustrating because we are seeing institutions being held up and made examples of. What we’re not seeing is a lot of effort to identify what are better ways to navigate these very challenging waters. How do we protect students from threatening speech and harassing speech while still preserving other students’ rights to express themselves? And that doesn’t seem to be the thrust of what the committee is doing here.
Sarah Spreitzer: Yeah, I find it... It’s interesting they refer to the December 5th hearing as a blockbuster hearing. And yes, they got two university presidents to step down, but there weren’t any fixes really proposed in that hearing. And obviously Chairwoman Foxx has several investigations going on regarding antisemitism on college campuses. It’s unclear if there’s going to be legislation introduced around whatever’s being found out from the investigations. I know that we’ve had amendments proposed that would limit Title IV federal student funding to institutions that might be accused of antisemitism on their campuses.
But I think you’re right, Jon, that this is very much a messaging hearing in which we’re going to see a lot of statements made that can be used in the news shows after the hearing.
It is a little different because it’s one president, and I think all of our institutions are different, and I think Columbia has had several more months to prepare and may have been responding in a different way based on what was happening back in December may look very different now or what the campus is thinking of. So it’s going to be a very watched hearing. Obviously, I think there will be a lot of news articles written about it, a lot of attention paid to Columbia, but it may not be as bombastic as the one with the three presidents, but I’m not sure.
Jon Fansmith: Yeah, I’m not sure I share your optimism there that it may not be as bombastic.
Sarah Spreitzer: I don’t know if that’s optimism.
Jon Fansmith: I think the other thing that’s interesting about this one is the December 5th hearing was before the committee had announced that they’d be investigating individual institutions. It was before they made requests for documents of institutions like Columbia. We haven’t seen much publicly coming out of those investigations other than the committee saying frustration with Harvard in particular about what was produced or what wasn’t produced.
And this, from that perspective alone, I think this will be an interesting hearing to get a sense of hopefully what the committee’s goals are with these investigations. Are they leading towards developing better policy that will help students on the campuses, that will help campus administrators navigate these situations? We haven’t seen any indication of that. We’ll get a sense because Columbia is one of those institutions that has produced materials, so the committee will have those in advance of this hearing. We’ll get a sense of how they plan to use that and to what end will be interesting to follow.
Like I said, I’m afraid it will be probably a little bit more bombastic, that the tone will be as hostile as we saw the last hearing. But who’s to say? It could change and we could get something out of it a little bit more productive, hopefully so.
Sarah Spreitzer: Well, one, we got a couple questions from the audience about DEI efforts within the states to restrict DEI, and I think that we will likely see comments made about whether or not Columbia’s response to some of the things going on were impacted at all by their DEI efforts. Because we did see a lot of that in the December 5th hearings. I don’t know if you want to say anything about DEI in general and what’s been happening across the country in the individual states.
Jon Fansmith: Yeah, I mean, the state-level work is really interesting. It’s also a huge topic, and I hope folks were able to see our colleague Heidi Tseu’s National Engagement webinar where she teed up some of these issues a little bit, talking about not specifically DEI but how institutions can work on policy matters across the states.
What we’ve seen at the federal level, this education workforce committee held, two subcommittees actually held a hearing around DEI on college campuses and reinforced some of the points we’d seen made in the December 5th hearing a belief that either campus DEI offices were not sufficiently supportive of Jewish students, weren’t providing the same levels of support to Jewish students as they made other students on campuses or in some cases making an argument that somehow DEI offices actually helped promote antisemitism on college campuses.
And I think we would certainly strenuously disagree with the idea that DEI has promoted antisemitism on college campuses. But it reflects this narrative you’ve seen across the states and other places that the discussion of DEI, using DEI as an electoral issue is gaining weight among candidates who see it as a way to position themselves, identify on a range of cultural issues where they stand for electoral gain.
I don’t think it’s going away anytime soon. I think it’s a little bit harder. I don’t know that the idea of linking DEI and antisemitism has really registered with the public the way perhaps the proponents of that theory want it to. But we’ll see more efforts around that. How substantive they’ll be, it’s hard to believe we’ll see any federal policy enacted in this area, in this Congress, especially given Democratic control of the Senate and a Democratic president. But again, an interesting area coming out of this in terms of meshing with these individual efforts we’ve seen across the state level.
Sarah Spreitzer: Turning from Congress, this week, I think we are expecting to see some very impactful final rules being issued that our institutions have been waiting to see for a long time that will likely have a big impact on our institutions. Should we talk about Title IX campus sexual assault and what we might see in the final rules? So obviously the Biden administration proposed a new Title IX rule that would overturn the Trump rule that was put in place. We submitted very substantial comments and we are now at the point where we expect to see the final rule any day now. What do you think might be in it, Jon, or how will institutions be impacted by this?
Jon Fansmith: Yeah, there’s a couple things to unpack here too, and one of the reasons we think the rule will be out any day now is there’s a... I know many of our viewers are familiar with this, but for those who aren’t, the federal government has a process for putting regulations into effect and usually what that is is different agencies have their own different ways of doing it. But ultimately when they feel they have drafted what they want to be the final rule, they send it to an office called the Office of Information and Regulatory Affairs at the Office of Management and Budget in the White House. OIRA is the acronym often used. And OIRA’s job is to review any regulations, make sure that they are consistent with the administration’s goals, that all the i’s have been dotted, t’s have been crossed. When OIRA then finishes their review of the regulations, they get sent back to the agency, and that really is the indicator that the rules will be finalized for both the Title IX sexual assault package or campus safety package and the new overtime rule at the Department of Labor. Both of those regulations came back from OIRA last week. So on both of those, we could expect to see the final rules introduced really, as you said, any day now.
In terms of what will be in Title IX, I will be candid. I’m not sure we have a great sense of exactly what the final rules will include. As you mentioned, it’s been a long time since they finished the taking comments on the Title IX regulations. Certainly a goal of them was to reverse a lot of what the Trump administration regulations had put into place, and I think we would certainly welcome a move away from the very adversarial courtroom type of procedures that the Trump administration had implemented. I think we’re hopeful that that will be there. I won’t pretend to be enough of an expert to get into what the prospects are of other pieces of that.
I would say if you are interested in this, we have a timeline around Title IX that’s up on our website. It’s a great resource. In particular, our comment letters go into a lot of detail about the particular issues of concern and do a good job summarizing where the Trump rules are, what the Biden proposals are, and what the concerns or benefits we see are.
And I see that Molly Connors asked both Title IX rules, including the sports-related rule. Sort of unpack that, Title IX actually does deal with athletes and athletics and maintaining equity between male and female athletics. So the broader Title IX package does have components that relate to collegiate athletics and also certainly at the K-12 level as well.
But Molly might be referring to what was a second Title IX package that the Biden administration had put forward, which dealt with the ability of transgender student-athletes to participate in sports. That rule had essentially said that there were determinations—generally they should be allowed to participate—but there were determinations that could be made at a individual school level around that.
Our expectation now is that that rule specifically, the Title IX transgender student-athletes rule, won’t be released until after the election. When they did release the proposed rule, there was a lot of criticism, frankly, from both the left and the right of that rule. I think people who identified with transgender student-athletes wanted stronger protections for their participation, and certainly opponents of the ability of transgender student-athletes to participate in sports that match their gender identification identity felt that the rule was too permissive obviously. So that seems to be something that, as we’ve talked about, in an election cycle, has sort of fallen afoul of election year timing. They’ll probably most likely release that after the election is over.
Sarah Spreitzer: Jon, do you want to share a little bit about what we’re expecting in the Department of Labor overtime rule? You mentioned that that’s the other one we’re expecting to see any day now because, again, I believe it was released from OIRA.
Jon Fansmith: Yeah, and unlike the Title IX rule, I think we have a much clearer sense of what will be in that rule. Our colleague Steven Bloom has been tracking this very closely. He pointed out that, so one of the things OIRA does when they are considering these rules is they take what’s called 12866 meetings, where members of the public can go in and talk to the OMB staff about their thoughts about the rule. Steven noted that they were taking meetings up until the day they released the regulation, meaning that they probably weren’t taking the feedback in from that last round of meetings directly into account. They probably knew what they were going to do. It’s a relatively telling sign.
For people who haven’t been tracking this, this rule would essentially... It does a few things, but the biggest one is it would change the salary threshold under which employees are entitled to overtime. So essentially at a certain salary level, if you’re a full-time employee and you make below that level, you should be entitled to overtime past, I believe, a standard 30 hours of work. Steven I’m sure is sending me a furious note correcting whatever I just said. The threshold would actually increase by about 70 percent from $35,000 where it currently is, which was put into place in 2020, to $60,000, right around $60,000 when it goes forward.
That is a significant increase, a $25,000 jump. For institutions that have staff, and particularly we tend to think about staff involved in student affairs and resident life around some of the athletics positions, certainly around admissions and enrollment, financial aid folks who go out to high schools and other places as part of recruitment and enrollment drives. The challenges with tracking their time, the challenges with adding an overtime component to their compensation, the financial impact on institutions, how significant that will be, and the necessity of essentially looking at your entire staffing structure and deciding what you can afford to do with these changes, all of which will have huge impacts on how campuses staff. Will you move an employee to an hourly role, and what does that mean for their career advancement, for their autonomy as a professional? There’s so many considerations that derive from that threshold level.
The other thing is when the Department of Labor proposed doing this. They proposed a 60-day implementation window, meaning essentially starting the clock the day the rule is finalized. All employers, but we’re speaking about colleges and universities here, would have 60 days to make all of those staffing changes I was just talking about, as expansive a package of changes across how you staff and how you hire and what you pay people. Doing all of that within 60 days, it would be incredibly, incredibly difficult for campuses to comply with. So we are hoping to see maybe some changes in that area. I think probably we’re not expecting to see those changes.
The final thing on this one is the last time this rule was introduced, there was immediately legal challenges to it, and those legal challenges ultimately wound up reducing the overall salary threshold, making some other changes to the proposed rule. We fully expect that other parties will come forward and sue when this rule is finalized, looking to block it, and then we’ll see the process play out. There is some thought that parts or all of the rule may be blocked by the courts ultimately.
So a lot still to unpack, but if it does move forward the way that we expect it to, certainly very concerning for institutions and something people should be paying a lot of attention to. And thanks to our producers for putting some links to the documents and our comments we’ve previously submitted in the chat for you to review.
Sarah Spreitzer: Yeah, two very complicated final rules, Jon, that we’ll be unpacking and we’ll be pushing out resources to folks. We have about seven minutes left. We did get a couple questions about the FY 2025 appropriations process. I think folks at our institutions may be thinking about congressionally directed funding. What’s the outlook this year for them to get the appropriations bills finished, especially since it’s an election year? What are you hearing?
Jon Fansmith: If they follow normal patterns, and I think given the difficulties this Congress has had with doing funding to begin with, I really expect that they will punt before the elections. October 1st is the deadline theoretically to have appropriations done and fully fund the federal government. They haven’t hit that mark in I don’t know how long, at least a decade.
And generally what they do in election years is say, “Okay, we’re going to defer until February or March,” and that allows a new administration to come in to submit a budget. In this case, it may be a returning administration, it may be a new administration, submit a budget and essentially put their priorities out there and then have with a new Congress and a new administration, new dynamics, possibly change of control in either of the chambers, time to sort out what that looks like before picking the process back up again. I would be shocked if there’s any substantive movement towards appropriations before the new year.
In terms of community project funding, we did see that in FY 24 and once again, colleges and universities were some of the biggest beneficiaries, both in terms of the number of overall projects that were funded and then the total funding amounts attached. It looks like next year, I think we’re going to get a 1 percent increase in overall spending was sort of what the deal was that was agreed to. It’s not a huge increase. It’s certainly insufficient in a lot of areas where we know they need additional funding, programs that have been underfunded over a while. So that’s not great that we’re capping at that level, but an increase is actually still good news coming off a year where it was relatively flat.
So project funding I think certainly will still be on the table next year. We might be able to see some increases in areas of priority, but, again, it’s really hard to say when we think that nothing’s going to happen until the new year, and at that point it’s a bit of a wild card because we don’t know who’ll be in charge of the White House or the Senate or the House.
Sarah Spreitzer: And I know campus folks are in this, hurry, hurry, hurry, wait kind of thing with the congressionally directed spending. I just saw in a newsletter that House Approps chair Tom Cole said that he’s going to be releasing the earmark guidance soon. So I’m sure folks are going to be asked to get their requests in.
But with the few minutes that we have left, Jon, I wanted to note that our colleague Bill Andresen noted that in follow-up from the hearing with Columbia or the investigations that are going on in the House Committee on Education and Workforce that there will likely be a report that gets issued by the committee based on their investigation. I think that’s a really good point that that ultimately is likely what we’re going to see.
And then we also had a question when we were talking about FAFSA and the possible changes to enrollment. Is there any talk about seeking federal funding for relief for institutions that serve perhaps a high Pell population that may suffer from enrollment declines? Are you hearing anything about that?
Jon Fansmith: I touched on that a little bit earlier. I think right now there is a lot of interest in trying to figure out what exactly Congress can do to limit the harm that this FAFSA implementation is causing to campuses. It’s a little bit of a difficult area to prognosticate on because these conversations are really just starting in a lot of ways, in part because the scope of the problems have only really become clear in the last couple weeks.
I think before we started to see the announcements with the large percentages of student information records coming out with problems, there was a hope that maybe, maybe, maybe as the ISIRs were beginning to come out that the timing could pick up, that things could at the last minute we might be able to avoid the worst. Now, we seem to be in a process where additional weeks have been lost and there will start to be really significant enrollment implications.
That said, absolutely ACE, our colleague associations, the idea of what kind of relief could be offered to institutions. How do we protect institutions who through no fault of their own will see enrollment declines, will see problems with processing, maybe even see issues with retaining current students who may not be able to make a determination as to what they can afford until they have their aid offer in hand. What that looks like, whether that’s a sort of COVID era HEERF relief fund effort, whether that’s some other way of doing it, like I said, very much up in the air, early stages of those conversations, but those and a number of other things are on the table at least.
I think we’re trying to gauge the receptivity of members of Congress. The great thing here, as we talked about during the hearing, Democrats and Republicans both really concerned, both very aware. They’re hearing from their constituents. They talk about this a lot. This is not a below the radar issue. So there is likely to be a lot of interest in doing something to help the institutions and especially those students who have been harmed by this. What that looks like, how viable significant new funding is in this current environment, the pathway forward through both chambers and across the administration’s, president’s desk, just too early to say, unfortunately.
Sarah Spreitzer: How much time a day do you think you spend thinking about FAFSA at this point?
Jon Fansmith: A shockingly large percentage of my time is dealt with either thinking about FAFSA or talking to people about FAFSA. And look, I get it, that’s not a complaint. I was at the Higher Learning Commission annual conference over the weekend, and there were a lot of presidents and senior administrators there, and almost to a person, this is what they want to talk about. And it wasn’t policy concerns. It’s we are really terrified on our campus by what we’re seeing. We’re doing everything we can, and it seems to be slipping away. These are real fears. There’s a real impact on real students and the institutions. It is a bad situation. We don’t know the full depths of it yet.
Again, we hope for a rebound, encourage people to do as much as they can in terms of deadlines, in terms of outreach to low-income students. But we are getting to the point, to the earlier question, we might have to start talking about remedies and federal remedies for this self-inflicted wound from the department.
Sarah Spreitzer: Yeah, definitely something we’re going to be talking about for a long time in many future podcasts. Okay. Well, we are right at time. Anything you want to add?
Jon Fansmith: No. I’ll say, sort of following up on my comment about being out at HLC, it is great. I love that people are coming up and talking to me about things, sometimes giving us very nice compliments about the webinar and the podcast, Sarah. So always good to hear and appreciate that, but really, especially what I’ve been hearing from folks about what they are doing on their campuses, how they’re trying to support their students work, with their communities here. And it’s a real testament to the people in our world and worth noting in what is a very difficult time. We don’t have a lot of great news to share with people, but there are a lot of really inspiring examples happening across campuses that probably don’t get the attention they should. So wanted to just recognize that before we signed off.
Sarah Spreitzer: Probably a good note to end on.
Jon Fansmith: Thank you for joining us on dotEDU. If you enjoyed the show, please consider subscribing, rating, and leaving a review on your favorite podcast platform. Your feedback is important to us and it helps other policy wonks discover our show. Don’t forget to follow ACE on social media to stay updated on upcoming episodes and other higher education content. You can find us on X, LinkedIn and Instagram. And of course, if you have any questions, comments, or suggestions for future episodes, please feel free to reach out to us at podcast@acenet.edu. We love hearing from our listeners and who knows? Your input might inspire a future episode.