Higher Ed in 2022: Unfinished Business and Election Year Politics


​​​​​​​​​​​​​​​Aired January 27, 2022

ACE Senior Vice President Terry Hartle joins hosts Jon Fansmith and Sarah Spreitzer of the ACE government relations team to discuss what Congress still needs to finish from 2021 (is Build Back Better really dead?) and look ahead to how the 2022 midterms could impact higher education policy.  They also briefly consider what’s at stake in the Supreme Court’s decision to hear the diversity in admissions cases involving Harvard and UNC-Chapel Hill.

Here are some of the links and references from this week’s show:

Supreme Court Takes Affirmative Action Cases
Inside Higher Ed | Jan. 24, 2022

DHS, State Announce Regulatory Changes to Attract More International Students and Scholars

FACT SHEET: Biden-⁠Harris Administration Actions to Attract STEM Talent and Strengthen our Economy and Competitiveness


 Read this episode's transcript

Jonathan Fansmith: Hello, and welcome to dotEdU, the higher education policy podcast from the American Council on Education. In this episode of our monthly interactive recording, Sarah Spreitzer joins me and Terry Hartle. We'll cover everything that's happening in Washington and look forward to what's going to happen in 2022. As always, we appreciate your questions and suggestions for show ideas. And you can share those with us at podcast@acenet.edu. Now enjoy the conversation.

Thank you all for joining us for our first one of these that we're holding this year in 2022. I am John Fansmith. I'm in government relatio​ns here at ACE and I am joined by my illustrious co-host ACE senior vice president for government and public affairs, Terry Hartle. And we are also joined today, Terry, by frankly the far more interesting and amusing member of our team, ACE's assistant vice president, Sarah Spreitzer. So we brought her on to help carry the load and hope people will actually enjoy this instead of just listening to us talk. But starting off-

Terry Hartle: Let's speak candid, John. We brought her along because she's got some good news. And you and I sort of suck in that area.

Jonathan Fansmith: That's probably the most important reason she's here. We have great esteem for Sarah. But she has all the good news right now. So speaking of news though, Terry, just today there was actually some big news in our world coming from the Supreme Court. You want to talk about that?

Terry Hartle: Just very briefly, the Supreme Court announced today that they would hear the affirmative action cases involving admissions at Harvard as well as the case at the University of North Carolina. University of North Carolina had not received as much attention because it had not progressed as far through the appellate process. UNC had prevailed at the trial court level. There was a direct appeal to the Supreme Court and the Supreme Court has now announced that they will hear the Harvard case and the UNC case together. We think they will hear these cases in the coming term, that is sometime next fall, but we do not know that for sure. This will be the fourth time the Supreme Court has considered this issue since the mid 1970s. Obviously, we're dealing with a very different Supreme Court now than we've had in the past. So there is a great deal of uncertainty about where the court will move on this issue.

We will, of course, at ACE, under the leadership of ACE general council, Pete McDonough, be putting together an amicus brief for the higher education community. We will strongly support what the institutions are doing in this area as completely consistent with Supreme Court decisions, as well as being socially desirable and necessary. But this'll evolve over the next couple of months. So this one is A, big news, but it's very much a watch this space situation. But John, why don't we turn back to what we talked about the last time we had a popup session. We were talking about all the things that Congress was doing or was not doing. When we had our last conversation, we talked about Build Back Better, we talked about fiscal 2022 appropriations, we talked about the debt ceiling, and we talked about voting rights, which at that point was waiting in the wings.

Congress has now kicked the debt ceiling issue way down the road. Congress won't take this up now until sometime in early 2023. So that's been disposed of by just simply putting it off. Voting rights has come up in the Senate, Democrats were not successful in getting enough votes to proceed. Democrats were not successful in changing the rules on the filibuster to enable them to succeed. And as a result, that seems to have been disposed of for the time being and doesn't seem likely to come back. But Build Back Better, the president's major initiative to invest in human capital is very much around, although its status is a little uncertain. And appropriations is still there. We are operating under a continuing resolution. I think in 28 days, the federal government runs out of money. So over the next month, we could have a number of things happening. Let's start with Build Back Better, how would you describe for the folks online where we are on this one?

Jonathan Fansmith: In terms of Build Back Better, I struggle to find the appropriate term for it. It is for all intents and purposes dead, but people haven't given up hope. I think that the easiest way to understand it is there is no path forward right now. The bill that the House had introduced that had gone to the Senate, that is not going to happen. Senator Manchin has made it clear he won't approve that. He's made it clear that other counter proposals, even he'd put forward around that framework, he's not going to it set. You are in a very different political climate, you talked about voting rights, Terry. There is a big feeling in Washington that Democrats need wins, they need some wins right now.

They've had a couple of tough months where their top priorities, things they'd really put a lot of time and attention and put as the face of what they're attempting to accomplish failed to move forward. There's a real interest in getting things up on the scoreboard before the midterm election. So there is still a lot of interest in doing a reconciliation bill. Again you can do that, it only requires the simple majority of both chambers, Democrats have that. But what that will look like, the only thing we know for sure about is it won't look like the last Build Back Better Act. There's a lot of interest in taking... Oh, sorry, go ahead Terry.

Terry Hartle: No, I was just going to say that we chatted about this earlier this morning. The discussion on Build Back Better seems to be focusing on things that would qualify as wins. But they also seem to be talking mostly about things outside student aid and scientific research. So prescription drugs, childcare, climate change, those are popular with Democrats and they seem to be getting a lot of air time. I'm not hearing a lot of talk about student aid and scientific research. So it's probably a pretty good time for campus officials who want to be doing something to be talking about the importance of Pell Grant of community colleges, of ending the taxability of Pell Grant, putting more money into research. That's probably what we should be emphasizing now.

Jonathan Fansmith: No, that's a great point. I think part of this is you run through the list, it was the things that were in the previous Build Back Better Act, where there was some thought that there might be bipartisan support. But more importantly, that Senator Manchin may have been supportive. So people who are thinking in those terms are thinking, maybe we can build a package that can get through. Muddying the issue a little bit is to the same point, people are also talking about provisions that weren't in the previous Build Back Better Act, but that are now very politically important. Things like supply chain issues, costs of foods and other consumer goods, rising crime rates. There's the sense, well, if this is going to be an electoral year issue bill, let's think about things that might move voters needles.

So all of that is taking place in a pretty compressed timeframe. It's an election year, things stop happening in Washington on an expedited basis. Really the summer, things start to shut down. The president is giving his State of the Union at the beginning of March. Democrats had really hoped to have something to be able to announce at that State of the Union address. But more importantly, I started here and I'll end it here, they're looking for wins. So what makes it into the bill will be the things that they think they can get passage on. And to your point, when they're talking about it, they're not talking about higher education, they're not even really talking about education. They're talking about a handful of big picture items that sadly doesn't seem to include us at the moment. Now, college affordability is a big picture item. I think we've done a really good job communicating that. But people, like you said, need to start reaching out and letting them know what the situation is and the support we have for it.

Terry Hartle: There's been a lot of talk in Washington in the last couple of weeks that what the Democrats have done with Build Back Better and voting rights is not necessarily something that moves large portions of the public. The percentage of Americans who say it's important to pass Build Back Better is modest, the percentage of Americans who think action on voting rights or changing the filibuster is even less large than those who talk about Build Back Better. What Americans seem to be concerned about is, not surprisingly, COVID, the continuation of the pandemic, and the economy, particularly inflation. Evidence coming out that wage gains rose last year significantly, but much of that was eaten up by changes in the consumer price index. So I think what we'll see over the next couple of weeks is Democrats looking for things that they A, can pass by themselves and B, that they can point to the voters, particularly middle of the road voters and say, "This is stuff you wanted to see us do and we've done it." Does that sound about right to you?

Jonathan Fansmith: Yeah, no. I think what you've seen in a lot of ways is a shift. I think you're right, Build Back Better, the things that were in Build Back Better individually, parts of them tested very well among the broader public. Voting rights is a huge issue to democratic voters, and particularly motivated democratic voters. These were things that as you look to an election, things to energize your base, things that were important to your electorate. The shift now is they are moving back more towards trying to capture the broader general public and seeing what are the things that the public wants. There's real concerns on the Democratic side about what the midterms will look like. Historically, that's not great for the party of the president. And there's certainly a lot of concern about that. It really does seem to be the thing that is driving a lot of policy making for this year, is those electoral concerns.

Terry Hartle: Well, certainly if you look back to the last two democratic president, Bill Clinton and Barack Obama, their first midterm election was disastrous for both of them. In part because of a perception, much of it after the fact, of course, that they had misread how much the voters wanted and how far the voters were willing to go. So Democrats are acutely aware of that and trying very quickly to redirect their energies going forward.

Let's move on to appropriations. We're still under a continuing resolution, that runs out in about 28 days I think, John. [crosstalk 00:11:32]. At that point, Congress needs another continuing resolution or they need to start passing some spending bills. What's held up to spending bills so far is the total amount of money to be spent, particularly the amount of money to be spent on defense. And second, the policy riders that are always attached to spending bills, including the Hyde Amendment, which goes back to the 1970s, by prohibiting federal funding for abortion services. I gather we're making some progress on the amount of money to be spent. But the policy riders continues to be a controversial area, particularly abortion, particularly in light of the new Texas law on abortion.

Jonathan Fansmith: No, all of last year it was maybe not a surprise that not much was happening on appropriations. the House moved their bills, Senate appropriations introduced their bills. That's an important distinct because those are democratic bills. In the House, the majority can simply put the bills they want forward in the Senate, these were not bills that were brought through committee, these were bills the Democrats introduced. But really it was a sense on, with other big spending things related to the pandemic, other pressures? You talked about the debt ceiling vote that was coming up, there some other crises, the approach is pretty clearly just keep kicking the can down the road from October 1st to December 3rd, from December 3rd to February 18th, which is where we find ourselves now.

But recently in the last couple of weeks, there seems to be positive movement. The two big areas that you identified, the overall spending amount. Again, none of this is final and it's still appropriations stuff and the members certainly are being pretty close lipped about it, but it seems like they're coming to an agreement on what the overall defense spending will be relative to the overall non-defense spending. The number you keep hearing is that they would spend about $25 billion above the president's request level on defense. And that would be a sufficient increase to secure Republican support. Related to that, a lot of the programmatic level funding doesn't tend to be as controversial. The appropriation staff have long experience at this. They're very good about this working with their peers across the aisle. These things they do very well.

So the money itself doesn't seem to the issue. That's holding them up. There are ongoing negotiations, the four corners are talking. It's those policy issues. And you hit the nail on the head, the biggest one is the Hyde Amendment language that precludes the use of federal funds to support abortions. Democrats because of the Texas law, this is something that's very, very important to their voters, it's a something that their voters want action on. So stripping that language when they control the majority in both chambers is a pretty natural policy response. But similarly, it's a big policy issue for Republicans too. And not including that language is something that their base would be very upset about. So you are trying right now to navigate a process in which somehow you can come to an outcome, whether that's the language is included or not, that gets at some of these political concerns.

And there's discussions about how you do that. Maybe you allow for a process where each policy provision gets its own vote. So allows both parties to show their support or their opposition to something, it's not clear. But that's clearly where the holdup is, it's more about the policy not the money. Money still takes time to resolve, but that's less of the issue. The bigger concern, I think, from the higher ed space is that what is always the most controversial bill in appropriations is the Labor HHS Education Bill because it has so many of these policy provisions. There's a large number of Republicans in the Senate who would be perfectly happy to see a continuing resolution through the end of the year. So carrying forward the 2021 fiscal year levels through 2022. Already very far into a fiscal year to begin with. But that approach makes a lot of sense. If you are opposed to the administration's priorities, you're not letting them get their funding priorities, you're not letting them shift funding to the programs they care about or create new programs.

So really you've got a big obstacle in the path of getting to any agreement on some of these controversial ones. So you may see things, you keep hearing this, that they'll split the difference. Bills where they can get bipartisan agreement or the policy provisions can be resolved, those will move forward. One's like Labor HHS Education, where it's more controversial, where agreement and bipartisan cooperation is harder, those might get CR-ed. It is a very possible outcome at this point that that is what will happen. Again, lots of things to do. The fact is the four corners are meeting regularly, they characterize their discussions as positive. We've heard the same things, that those are positive discussions. But big issues to resolve, not entirely clear how or if they'll be able to do it.

Terry Hartle: And of course, continuing resolution in the Labor HHS Bill would be devastating for students and institutions because we've got big increases in the major student aid programs in that bill as passed by the House and we've got a huge increase in biomedical research funding.

Jonathan Fansmith: I would highlight, particularly for people who are listening to this, PELL Grants is we were talking three months ago about a nearly $1,000 increase in the PELL Grant program in one year, the largest one year increase in program. $550 of that was in Build Back Better, which now looks like it's not moving forward. $400 of that was in appropriations. If there is no FY22 appropriations bill, we just went from $950 to zero increase in the PELL Grant program. It is a major, major swing.

Terry Hartle: Well, and similar with biomedical research funding, it's a $6 billion increase, I think, in the House bill and we could end up with essentially a zero increase. One question for you, John that's come in, what about earmarks? Do you think they'll be in the package or not in the package?

Jonathan Fansmith: So I think they'll be in. This is one of those where it's different than the earmarks of the past, the directive projects approach. There were limitations on how many earmarks members could request, the size of them, who they could go to. I think if you were looking at this as an experiment in whether earmarks would create bipartisanship, it was a failed experiment. Republicans didn't cross the aisle to vote in favor of the appropriations bills the House put forward. That said, as you get towards agreement, as you get towards some consensus, the fact that members will have individual stakes in these bills I think will probably help with those negotiations.

Especially for those members off the committee who might have a purely political reason for opposing or supporting the bill, they may be more willing to go along with leadership if they see a direct benefit they can tell in their district. I think they'll be included. It'll be interesting to see after all this time away what that looks like, which ones get carried forward, how much money is put into those. Obviously, it's a big deal to higher education institutions because we were the largest recipients of earmarks in the last go around. And with the nonprofit requirements this go around, a lot of the earmarks that were advanced, were advanced to institutions of higher education. So it's important, I think they'll be there. But it's better prognostic care than I think would struggle to tell you exactly what it'll look like on the outcome.

Terry Hartle: John, one questions come in for you. You referred a minute ago to the four corners. Do you want to tell folks what the four corners means?

Jonathan Fansmith: Oh, sure. I was using the context of appropriations, but it's true really for any congressional committees. It's the chairs and ranking members of the respective committees in the House and the Senate. So the four leadership positions on committees. So for appropriations, it's the House and Senate appropriations committees, for instance for education and labor and health. In the Senate, it would be the chair and ranking members of those two committees. It's just a term we use to refer to that leadership group.

Terry Hartle: A little inside baseball for you all. Sarah let's talk about one area where we clearly do have some good news to report. In large part, thanks to the work of you and a working group that you have assembled here in DC and a lot of folks on campuses. We're doing pretty well with respect to moving forward on international students and scholars. We've had a couple of wins in this area, including some just recently. Want to summarize for folks the ways in which things have gotten better in this corner of our world?

Sarah Spreitzer: Yeah. Thanks, Terry. So at the start of the Biden administration, folks may remember that we sent letters to the Secretary of State, Blinken and Secretary of Homeland Security, Mayorkas, after their confirmations asking for them to take certain actions, really to send a more welcoming message to our international students and scholars. And part of that was because of all the regulatory actions that we'd seen Trump administration take that made it just much more difficult for our international students and scholars to get visas, to stay in the US for practical training, all those other things that made the US unattractive for students and scholars.

So just this last month, we saw the Department of Homeland Security reestablish the Homeland Security Academic Advisory Council, which is something that we in the higher education community has been asking for. This is an interagency council. It involves the DHS, the State Department, the Department of Education. And allows them to interact with higher ed stakeholders to talk about issues impacting our students and scholars. And so that was great news. Then last Friday, we saw the White House announce a series of actions that they're taking through the State Department and DHS to really support STEM students, both undergraduate and graduate. This includes adding 22 different degree programs to the program list of who qualifies for optional practical training in STEM. And that's important because OPT allows you to stay for a year to get practical training. But if it's in a STEM field, you can stay up to three years. So this expands the number of students that will be able to stay here a bit longer for that practical training.

Terry Hartle: So we're making progress in that area. We've pretty well got back to where we were before the start of the Trump administration. And in some areas, like you just mentioned OTP, we are actually doing a little bit better. So this one doesn't get the public visibility that legislation gets because it's in the agencies, but we're making progress getting back to at least where we were.

Sarah Spreitzer: And it will be interesting, Terry, to see what the impact is on our international student enrollment figures next year. We know that we searched back following COVID and our campuses being closed last year, we saw a big return in interest from international students and scholars. But we're still not back to where we were pre-COVID. So we're hoping that this will be helpful in attracting new students to the US.

Terry Hartle: Now, research security continues to be a topic of discussion. The last week we've had one case filed by the Department of Justice's, China Initiative against a prominent university researcher dismissed. But we've also had another researcher at a different institution plead guilty to not being straight with the FBI. So that continues to move forward. Any thoughts on those two cases?

Sarah Spreitzer: So Terry, the China Initiative was something that was started under the Trump administration. I think right out of the gate, I think higher ed and academics were concerned that it was called the China Initiative. Really it's focused on economic espionage in industry and also in higher education and whether or not China is inappropriately accessing federally funded research and development activities. Terry, you and I just pulled the list of the ongoing cases that DOJ is considering under this China Initiative. One of the interesting things is that out of the 58 current cases that they're working on, only 10 or around 12 are related to higher education.

So we are a small piece of this larger initiative. But I think that a lot of researchers and institutions of higher education are following this closely because the Department of Justice has not had many wins in the courts regarding this. So their biggest win to date has been Charles Lieber, who has found guilty of inappropriately taking money from the Chinese government and not reporting it to the federal research agencies and lying to the IRS. But in other areas they really haven't had much success.

Terry Hartle: And of the 10 or 12 cases that we identified that were clearly related to research or science at colleges and universities, about half of those would be really regarded as serious espionage, clearly illegal activities. The others were more specific failure to disclose cases. And I'm not trying to dismiss failure to disclose, it's illegal, people should be disclosing as is required, and some people weren't. But we've got, as we've said, about 10 to 12 cases that we can identify that they've brought. They've won a couple, they've lost a couple very publicly. And in other cases, university researchers have pled guilty or been pursued for failure to disclose. But part of the issue with the failure to disclose is that the disclosure requirements vary considerably from agency to agency. And the White House is now moving to standardize the disclosure requirements. You want to spend a second talking about that?

Sarah Spreitzer: Sure. So one of the things that happened at the very tail end of the Trump administration is they released the National Security Presidential Memorandum or NSPM 33, that basically lays out a call to the federal research agencies to standardized disclosure requirements. And the Biden administration through the Office of Science and Technology Policy is now moving forward with that guidance. So they are calling on the federal research agencies to standardize their disclosure practices, which hopefully will make everybody on the same page regarding how you disclose your foreign funding or whether or not you have foreign partners on your federal grant applications.

Terry Hartle: So that would simplify disclosure requirements, but people would still have to disclose. And if people forgot or didn't want somebody to know, they would be taking a significant legal risk. Another area where this is going on, much of this we've talked about, is within the agencies, particularly science agencies. But that's also being fought out on Capitol Hill. Last spring, the Senate passed the US Innovation and Competition Act, USICA. I think 68 votes to pass it in the Senate, a big bipartisan win. The bill went to the House where it immediately stalled. The Senate very unhappy that their bill stalled was talking about taking extraordinary measures to get it considered in December. In response, Speaker Pelosi said, "We will take up USICA early next year." And the House is engaged on that. But there's been some significant developments on this, both in terms of how the House will engage with the Senate and some of the issues that we care about. So you want to take it from there.

Sarah Spreitzer: So, Terry, you're right. The Senate passed this very large USICA bill last year with a lot of bipartisan support. The House had been going about it in a piece meal action. They had pieces of the bill, they had the NSF for the Future Act, which would reauthorize the National Science Foundation and authorized funding for the federal science agencies. There was a piece coming out of House foreign affairs that looked at diplomacy and how to interact with foreign governments of concern like China. But it wasn't this comprehensive piece of legislation like they had passed in the Senate.

So now the House has indicated that they are going to introduce a comprehensive piece of legislation. Speaker Pelosi indicated in a dear colleague letter last week that they could introduce it as early as this week. And we know that it involves multiple committees, including labor, the science committee, foreign affairs, ways and means. A lot of different pieces are going to go into this bill. So, John had talked a bit about how they're stalled out on appropriations, they're stalled on Build Back Better, this will give them a piece of legislation that they're hoping to move really in the first quarter of this year to get a win.

Terry Hartle: And the issue here is that the bill passed the Senate with a bipartisan majority. When House Democrats sat down to negotiate with the Senate, they were negotiating against a bill that both Senate Democrats and Republicans were supporting. And House Republicans, if anything, wanted to go further than the Senate bill went. So the Democrats in the House were trying to navigate an environment where they didn't have much to lean on. So by drafting their own bill and passing it presumably, House Democrats want to put themselves in a position to say, "Look, we will negotiate with you with the bill you've passed. You will negotiate with us with the bill that the House has passed. Let's figure this out." So they're doing this in part to put themselves in a much stronger position of negotiation with the Senate going forward. The two areas we've talked about a lot in this, the expansion of section 117, foreign gift reporting and the possible requirement to report gifts to individual faculty and staff made by foreign governments, corporations, or citizens, proposed section 124, looks like both of those are going to be in the House passed bill.

Sarah Spreitzer: Yes, but we are hopeful. We sent a letter back in September to the committees that we thought would be involved in conferencing this bill, talking about the incredible burden of lowering the reporting threshold of section 117 from the $250,000 to the $50,000 level. And again, that's gifts or contracts to institutions not to individuals. And just given the issues that we've had with the Department of Education in getting section 117 compliance under control, we just thought it would be really difficult. And doesn't really capture those really large gifts that Congress is concerned with. So that's something that we'll be watching when the House introduces their language, if there's been any movement on that threshold.

Terry Hartle: And on section 117, that requirement is now almost 40 years old. I don't think the Department of Education has ever found a problematic grant or contract that a university entered into. And the advocacy groups that review the data have never found one that they judged problematic. The course the Senate has embarked on would be to say, well, maybe if we looked for lots more gifts, particularly small gifts, we'd find something that was suspicious. That creates a lot more reporting, it creates a lot more burden for the Department of Education to keep track of things. But it does look like we're going to be more reporting requirements on section 117, which will bring more schools into the mix. And we will probably see this section 124, which will require faculty and staff to disclose information to institutions that the institutions will then have to publish.

Sarah Spreitzer: That's correct, Terry.

Terry Hartle: The question's come in about, when would the threshold be lowered if it is lowered. And the answer is sometime in the future. One, the Department of Ed will have to go through a rule making process on this legislation that's in the Senate pasted bill. The House Democrats have been sympathetic to our observations, that this requirement has been around for 40 years, there's no reporting requirements, there's no regulations. So we assume we will have a regulatory process and it'll probably be a couple of years before we see that reporting requirement kick in. Meanwhile, the reports which now have to be filed every six months are due next Monday, due on January 31st. If you're an institution, you might want to make sure that somebody who is going to report this has got this on their radar screen. Because not reporting is not a good option.

Let's move on just a little bit. In the second year of any administration, we begin to see more activity come out of the agencies themselves. Agencies have staffed up, agencies have found their footing, and they start doing some more things. John Fansmith, Consumer Finance Protection Bureau, CFPB, made an announce last week about looking into higher education and student loans. They said they were going to open an investigation of four or five areas involving the relationship between students and institutions and financial aid. You want to run through those for folks?

Jonathan Fansmith: Yeah. And it's important to understand what kind of lending they're talking about. They're looking specifically at institutional lending to their own students. So not the federal student loan programs, not outside private lenders like you might get from a bank, but cases in which institutions themselves are lending to their students. It's not hard to connect the dots as to why CFPB is interested in this. This internal institutional lending programs at ITT and Corinthian were used in a lot of ways to avoid federal oversight and federal regulation as those institutions were collapsing. So there's concern about that practice generally. But it's also so important to note that CFPB is not saying, we are looking at this only proprietary institutions. And I think in particular, three of the five things they're going to look at really apply to all institutions.

The first one is placing enrollment restrictions on students based on whether they are late on a payment, whether they're not meeting the terms of their loan, another one is withholding transcripts. This is an issue that has gotten a lot of attention recently, that Congress has been very focused on, that congressional staff we hear from about this on a pretty regular basis. The idea that a school would withhold transcripts from students who owe them a debt. And then the other one would be failing to issue... Sorry, not failing to issue refunds, but maintaining improper lending relationships. And this one probably for nonprofits is less of an issue. In the 2008 reauthorization of Higher Education Act, there was actually a significant amount of attention to schools lending lists and the terms under which schools could have those lending lists, who could be on them, how would they'd be maintained. So schools who are in compliance with that, again, this should not be an issue.

The concern more is where they have seen in the past these relationships where outside entities, sometimes created by the institutions themselves, are entering into partnership with the institutions themselves. Students have been directed to use those lenders rather than other options that may have been better for them. The other two issues I started to touch on, failing to issue refunds. This relates to early withdrawal or other conditions in which a student may have paid, left, and then been entitled to some refund, either a whole or in part of a what they've paid. And then improperly accelerating payments. I will be honest, when I saw this, I wasn't aware that this had been an issue. But apparently there are cases in which institutional lenders will say that if you were to withdraw early, the full amount of your loan is due upon that withdrawal.

So these are obviously many of the ways in which the things they're looking at have been used, are very problematic. I think we'd be very concerned about institutions doing that. Likewise, I don't think most of ACs, institutional members, and higher education broadly this will have a direct impact on. With federal policy, there's always a concern that there are things at the margins, unique circumstances that may run up against some of this. But again, what's very clear is CFPB is looking at these well documented, high profile cases where institutions have been involved in private lending in ways that really are harmful for students and get them around outside regulation and governance.

Terry Hartle: I think John, the one area that seems to me to be the biggest vulnerability for college and universities involves the withholding of transcripts for unpaid balances. The colleges and universities have done this for a very, very long time. A survey done last year by our friends at the AACRO, the Registrars Association concluded that the vast majority of schools withhold transcripts for unpaid balances. And a large majority of schools did it for balances of less than $25. The fact is most people on this call today have no idea what their precise institutional policy is. We've been doing this, as I said, for a very long time. But the environment is changing and policy makers are increasingly asking themselves if it's fair that institutions are withholding transcripts and academic credentials when the amount of money involved is de minimis. So I think individual institutions ought to be checking to find out what their policy is, so at least they will know themselves. I think this is one of those areas where we could find Congress deciding that perhaps they ought to intervene in some fashion or another. You think that's a reasonable assessment, John?

Jonathan Fansmith: I strongly agree. I think even if the CFPB investigation isn't really going to be of great concern to institutions in this regard, congressional attention on this practice itself, there's already large national media coverage of it. We know congressional staff in a bipartisan manner have concerns about this practice. So I absolutely, if you are not, you should be looking into what your institution's policy is and thinking about what the best path forward for it is. Because there will very likely be congressional action. Certainly when we get to authorization on this issue. And we are a little bit past time. So I want to thank everyone for assuming your questions. A reminder that we'll be doing again next month, possibly with Sarah. Can we maybe allow Sarah back? And so there'll be another opportunity to ask questions and we'll see where we stand on appropriations and all these other things that are running up against deadlines. Thank you so much for taking time to be with us today. We've enjoyed speaking with you. Take care.

Terry Hartle: Thanks, guys.

Jonathan Fansmith: As always, you can check out earlier episodes and subscribe to dotEdU on Apple, Google Podcasts, Spotify, Stitcher, or wherever you listen to your podcasts. For show notes and links to resources mentioned in the episode, you can go to our website at acenet.edu/podcast. And while there, please take a short survey to let us know how we're doing. You can also email us at podcast@acenet.edu to give us suggestions on upcoming shows and guests. And a very special thank you to the producers who help pull this podcast together. Lori Arnson, Audrey Hamilton, Malcolm Moore, Anthony TruHart, Catherine Amad, Carley O'Connell, and Fatma NaGom. They do an incredible job making this happen and making Mushtaq, Sarah, I sound as good as possible. And finally, before we leave, thank you so much for listening.

About the Podcast

​Each episode of dotEDU presents a deep dive into a major public policy issue impacting college campuses and students across the country. Hosts from ACE are joined by guest experts to lead you through thought-provoking conversations on topics such as campus free speech, diversity in admissions, college costs and affordability, and more. Find all episodes of the podcast at the dotEDU page.

Listen and Subscribe

Apple PodcastsSpotify  

Stitcher Google Play Music

Amazon Music 


Connect With Us

Tweet suggestions, links, and questions to @ACEducation or email podcast@acenet.edu.