Jon Fansmith: Hello and welcome to dotEDU Live, the public policy podcast from the American Council on Education. In this episode of our monthly interactive recording, I’m joined by my regular co-host, Sarah Spreitzer, as well as our ACE colleague, Steven Bloom, to talk about divisive concepts and what’s happening across the world of higher education policy.
Sarah Spreitzer: And Jon, it was a great conversation with Steven. Obviously there’s a lot of interest in this topic of divisive concepts and what’s happening in the states. We also get to hear an update on federal policy, everything going on in Congress and the administration. And if folks can’t get enough of us, they should look to join us at the ACE Annual Meeting, which is going to be here in Washington, DC, April 13th through the 15th. If you’re interested in registering, it’s at aceannualmeeting.org. For the price of registration, you get to hear an update from Jon in person on federal relations, you get to see two live podcast recordings, and also a lot of great panels with folks from the Biden administration and the congressional committees talking about all our favorite federal policy issues.
Jon Fansmith: Thank you, Sarah, and we always love hearing from you and seeing you, the audience for dotEDU Live. So please, I’d reiterate what Sarah said, come out and join us at the ACE Annual Meeting. One of the reasons we always love hearing from you guys is that we appreciate your questions and suggestions for show ideas. And you can share those with us at podcast@acenet.edu. That’s podcast@acenet.edu. Now enjoy the conversation.
Welcome again to the March edition of the Public Policy Pop-Up. I am your host, Jon Fansmith, senior vice president for Government Relations here at ACE. Joining me today is my regular co-host, Sarah Spreitzer, and we have submitted this as, put this out there as a question and answer session, and Sarah and I are going to be dealing with a lot of questions that you’ve submitted. And thank you again for all of you who did submit those questions in advance. But before we get to those questions, we have another guest. We’re lucky to be joined by our colleague Steven Bloom, an assistant vice president here at the American Council on Education, works with us in Government Relations. Steven is joining us today to talk about work that ACE’s been doing on what we’re calling internally “divisive concepts,” issues that I’m sure will be familiar to all of you, that have been of growing concern on campuses across the country. So, Sarah, and especially you, Steven, welcome to the Pop-Up.
Sarah Spreitzer: Hi, Jon. Hi, Steven.
Steven Bloom: Good afternoon, everyone. So glad to be here.
Jon Fansmith: Now, Steven, I introduced you. You’re going to talk about divisive concepts. Maybe it would be helpful for people to just define what we mean when we talk about divisive concepts and a little bit of background as to why we’re talking about them.
Steven Bloom: Sure. And you see around the country in a number of states, state legislators and governors have been taking executive actions to restrict or limit the kind of teaching. Really it started in K-12, but now is migrating towards higher ed on a range of topics that concern race and gender, American history, and LGBTQ identities, and even DEI, diversity, equity, inclusion efforts on campuses and in K-12 institutions and even in state institutions. And so it’s a trend that we’ve seen for the last couple of years.
And you may be aware that ACE put out a resource guide in late February, co-authored with PEN America. PEN America is a longstanding organization that defends the free speech rights of writers. The resource guide has a number of components to it.
One is just an overview of this trend that I was talking about a minute that Jon sort of set up, that what we’ve been seeing going on in states the last several years. Then it discusses longstanding principles and statements around academic freedom. The American Association of University Professors, AAUP, their 1915 and 1941 wrote very important statements about academic freedom and tenure. And then more recent examples of where institutions have the Chicago principles staking out the importance of academic freedom.
And then it includes a discussion of the findings of the public opinion research. It includes a number of tools and strategies that campus leaders and their stakeholders, if they want, can use to engage with elected officials in their states or the media. It has a set of talking points, it has a set of Q&A strategies for crafting op-ed pieces or engaging with the media, as well as a couple of addendums that are some bills that have been enacted that are examples of what we’re talking about, and a summary of the document, which is about 15 pages long. It’s a two-page summary that if campus leaders want to distribute it to their stakeholders, they can do that.
There are pieces of the resource guide that are really, we think, hopefully are valuable to our institutions and folks on campus because we recognize it’s a challenging environment. I mean, in fact the resource guide talks about defending, or its title is defending academic freedom and institutional autonomy in a challenging political environment. And we understand from talking to our members that it is very challenging, particularly I’m sure for public institutions in certain states where there have been these kinds of efforts.
The thing for you to keep in mind in terms of the way we’re approaching it, we’re really not focused on a particular state, but more on the trend. And we see this as a very worrying, dangerous trend that has the potential to really threaten and undermine two basic bedrock principles of American higher education: autonomy from governmental intrusion and academic freedom. These are bedrock principles that have served higher education for decades, served us incredibly well and the students we graduate, and served as a magnet for the smartest students and scholars from around the world to come and study in the United States.
Jon Fansmith: So, Steven, can I ask something? We’re talking about the states mostly here and where we’ve seen this. Do you see this moving to the federal level? Is this something... ACE traditionally focuses on national advocacy and particularly here in Washington, DC. So just curious, as you are looking at this, as you’re looking at these trends, is this something we should be worrying about in terms of federal policy?
Steven Bloom: Regrettably, yes. I mean, I think when we started thinking about this last March, we were worried a little bit, maybe not as much as we are now, that this was going to come to Washington. I do know, and Sarah worked on this, there were efforts in some legislation, the National Defense Authorization bill, a must-pass bill every year, where there was an effort to include some kind of a provision that would have restricted efforts on campus. Not so much what’s taught, but I think around DEI maybe in research. And so that was an early example of this potentially coming to Washington.
And now I think we’re increasingly seeing it, at least verbally. I mean, you see lots of members, particularly in the House, talking about this. Chairwoman Foxx of the House Ed and Workforce Committee has talked about it. There was a hearing recently that you all know better than I do where this was lots of conversation about so-called “woke” universities. And so unfortunately the answer is yes.
Jon Fansmith: And just while we’re on the theme of state-level issues too, and we tend to see a lot of the same bills in different states. Can you talk a little bit about why that is? And certainly we’ve been hearing more and more from members about the fact that what they tend to see popping up in one state quickly follows to their own state.
Steven Bloom: Yeah, well, we don’t have firm evidence. There’s my lawyer hat putting on for a second. But it’s more circumstantial, that we believe that certain organizations, like the Manhattan Institute, for instance, are leading efforts to craft model legislation and talking points and strategies for how you’d go about implementing these things. And I think that’s what we’re seeing is legislation popping up that’s very similar in different states. And when you see that, at least it’s circumstantial evidence that there’s being shared similar pieces of legislation across states. And so I think there’s certainly a good case to be made that there is a concerted effort to spread a kind of model legislation, or different kinds of legislation that would approach us from different angles, that states are picking up or legislators in states are picking up and trying to get passed.
Sarah Spreitzer: So if it’s not at your state yet, just wait a month or so.
So, Steven, speaking of your legal hat, as you refer to it, as a lawyer we have two questions that I think will be of interest or that you will be especially valuable in answering. The first is we had somebody ask, or at least say, “I’m learning that academic freedom may not have the legal protections many of us assume.” What can you say about the existing protections around academic freedom or are there legal protections?
Steven Bloom: It’s a great question. I’m not really aware of specific legal protections for academic freedom. I mean, certainly if you back up, academic freedom is related to free speech. They’re a little different concepts, but they are very much, as I said, related. And so at public institutions, the ability of the government, whether it’s state or federal government, to restrict what’s taught and discussed on campus and what’s researched by faculty members in basic expressions of academic freedom, there’s limits on what the government can do under the First Amendment. And for private institutions, I’m not really aware of specific legal protections, but it’s a deeply embedded norm within higher education.
I think the question came from maybe an academic, I don’t know, a faculty member. So this is a concept that our graduate students learn very much while they’re being trained to be academics, if that’s what they choose to do with their graduate degree, and certainly undergraduates benefit from it. Our institutions are vibrant places of learning as a result of these principles of academic freedom.
But it is a big challenge, in the sense that there may not really be legal protections. I suppose you’d have to look at individual states and individual establishment documents for institutions, particularly public institutions, and maybe for privates too that they’ve committed in some fashion that might have some legal binding. But I guess that’s as much as we know at this point.
Sarah Spreitzer: So we also got a question about whether or not you’ve heard of any plans to challenge the legality of some of these state bills around freedom of speech and other federal protections. Are you hearing anything like that?
Steven Bloom: Yeah, that’s a great question, Sarah. Thank you. I mean, we certainly know that the so-called Stop WOKE Act, which was a bill passed last year in Florida that was challenged in federal court. At least the higher ed component was challenged in federal district court in Florida, and the judge issued a temporary restraining order on the pieces that apply to higher education, which would’ve restricted teaching around issues like race and so-called critical race theory and things like that. And that has been enjoined, which is just basically stopped, a legal term for the court telling the government, in that case, Florida, that it can’t implement that component of that particular statute.
And I wouldn’t be surprised if during this cycle of state legislative action that if things get enacted, and we already know... It’s, again, it’s pretty active this year, since 2021. These are bills that PEN America has identified as “educational gag orders” since January of ‘21. 86 bills have been proposed in 32 states, and there are currently 21 bills that are live, seven bills that have been enacted in seven states affecting about 40 plus million Americans. And so we do see this as part of the activity in state legislatures this year. And so they have to be... If they’re enacted, I would not be surprised if they will be challenged on First Amendment grounds and maybe other grounds as well.
Jon Fansmith: So Steven, I’ll say you are clearly, I don’t know if touching a nerve is the right one, but we are getting lots and lots of questions about this, obviously a lot of interest in the subject area. I had asked you before about state-level issues coming up to the federal level, and Crystal Chambers submitted a question that I thought was a pretty good kind of a question, kind of a point. In some ways, didn’t all of this actually start with the Trump administration and their executive order barring the use of DEI in federal hiring and other practices?
Steven Bloom: That’s a great question and absolutely right. I do think that that certainly kicked off this trend. I mean, I do remember when several of us at ACE worked on that, a response to that executive order. It was at the very end of the Trump administration, I think in September of 2020. And it requested... It would’ve required, not requested, required all federal contractors, including higher education institutions, to disclose to the federal government a range of materials related to DEI efforts on campus and at other federal contractors. And, yeah, we were deeply concerned about that executive order back then. I remember being part of a group of us drafting a letter, and, yes, I think that’s a great point and that’s a good example of where it happened at the federal level. Ultimately that executive order was withdrawn early in the Biden administration, but we can imagine that that could, or something like that could, come back here at the federal level.
Jon Fansmith: And one of the things we often think about this is the policymakers who are driving a lot of these proposals. There’s a political motivation. We’re in an election cycle, a presidential election cycle. We understand somewhat in that context, right, there’s a political motivation behind the introduction of some of these bills and raising these issues. But Marlene Ross, who if it is the Marlene Ross I think it is, a former ACE colleague and a friend to the organization, so happy to hear from her, wrote in, and this is kind of an interesting point to that. She said, “I now live in a more conservative area where people feel these new bills are getting them academic freedom in this ultra-liberal environment that has been existing in higher education institutions. How would you respond to that?” And I am interested to see how you would respond to that, Steven.
Steven Bloom: Thanks, Jon. Just a little pressure there.
Jon Fansmith: You’re just live with hundreds of people watching you, so.
Steven Bloom: Yes. And thanks for–
Jon Fansmith: Formulate on the fly.
Steven Bloom: And thanks, Marlene. I’m filibustering here a little bit. Thanks, Marlene, for a great question. I think it’s hard to make the case that where government is telling an institution what it can and cannot teach and discuss on campus as giving you more academic freedom. We can go back and look at a famous case, Justice Frankfurter, and more than 70 years ago without… I’m not going to discuss the details of the case or get too much into it, but basically the point that he made is that free society depends on free universities, free from government intervention, and that universities rely on four basic freedoms: the freedom to decide who’s going to teach, what they’re going to teach, how they’re going to teach it, and who gets admitted to an institution.
Those are fundamental concepts. So the notion that by restricting what can be taught on campus and how it should be taught on campus to adults, after all, that’s what we’re talking about. We’re talking to young adults. We are trying, our institutions are trying to teach them critical thinking skills so that they go out into the world, they engage in our society, they have families, they work in the workplace, they’re involved in helping maybe lead companies, establish companies, being entrepreneurs, develop innovative technologies, or if they work in the medical space, lifesaving drugs or other developments, that somehow restricting what’s taught on campus is going to lead to that kind of an outcome. It seems like you’re turning that whole concept on its head.
Sarah Spreitzer: Well, it–
Jon Fansmith: Steven, for an impromptu answer, you did quite well. That’s a great response.
Sarah Spreitzer: Yeah.
Jon Fansmith: Clearly we have the right person working on this.
Sarah Spreitzer: Yeah, that was really great, Steven. And obviously this isn’t the last that we’re going to hear on this topic and we’re really happy to have you leading us all in our advocacy around these things. And obviously we’ll likely talk about this in a future Public Policy Pop-Up. But switching to what’s going on with the rest of Congress, Jon, some of these issues are also bleeding into what the House of Representatives is working on, and in fact there’s a vote later this week on one of those bills.
Jon Fansmith: Yeah, and really more on the K-12 side, but I think probably later this week, to answer that particular question, the House Education & Workforce Committee is going to have a vote, or actually, sorry, they’re moving to the floor this week, a bill that the committee passed called the Parents Bill of Rights Act, which is modeled very closely on Florida legislation at the elementary and secondary level. So not impactful for our institutions, but I think one of the things that’s important, and Steven’s talked a lot about institutional autonomy, particularly about academic freedom, the bills that the House has so far considered aren’t on those lines. The other bill that was marked up at the same time as the Parents Bill of Rights was a bill called the Protecting Women and Girls in Sports Act, which would have barred the participation in women’s athletics of people who identified as trans or did not share reproductive biology at birth of that gender.
It’s less important in terms of the things Steven has been talking about. They’re not really related to that. What’s really important is these were the first two bills that committee marked up under Republican majority, and I think you can safely say these are not necessarily the issues that most people in K-12 or higher ed policy think are the most pressing, in terms of where the federal government can intervene and be helpful. These are really the kind of culture war issues that, in an electoral climate like the one we’re at, where both chambers of Congress are so closely divided, where the president, certainly to Republicans, looks very vulnerable, these are the kind of things that are electoral issues. They’re there to drive the base, they’re there to raise support among your base, your caucus. And that’s why we’re seeing those kinds of things.
It does, Steven’s point about coming to the federal level, we’re not seeing it at the federal level in quite the same ways as we’re seeing it at the state level, but the rhetoric is certainly ramping up and we’re seeing more efforts in that area coming up to Washington.
Sarah Spreitzer: And the other big issue I think the House is gearing up to look at on that committee is the student loan forgiveness plan from the Biden administration. Obviously they have a hearing on that later this week. But we also had some movement on the Senate side with our ranking member, Bill Cassidy from Louisiana. Do you want to give us an update on that, Jon?
Jon Fansmith: Yeah, I actually find this really interesting. So Senator Cassidy is the new ranking member on the Health, Education, Labor and Pensions Committee. And it’s not a surprise, anyone who’s been following the Biden administration’s loan forgiveness plan, that it is very, very unpopular with Republicans on Capitol Hill. And Senator Cassidy is proposing a novel way of getting rid of the loan forgiveness plan. It’s important to keep in mind the Supreme Court has already heard oral arguments at the end of February. We’re waiting for them to return a decision which may kill the loan forgiveness plan to begin with. We’ll see. That’s probably likely in June, maybe July, we’ll see that decision.
But until that point, Senator Cassidy has proposed using something that’s very rarely used. It’s called the Congressional Review Act, and it essentially allows Congress by simple majorities in each chamber to strike down regulations if they have been passed within a relatively recent period of time. Now, Republicans control the House. They are very strongly opposed to this. It seems likely that in the House at least this motion would pass. The Senate Democrats maintain the majority, but a very, very slim majority, 51 to 49 at this point. And it’s not impossible to imagine there might be some Democrats who are looking at reelection in 2024 who are in areas where perhaps loan forgiveness isn’t as broadly popular as it is in other parts of the country and think, well, this might be a place where they could pull Democratic votes over.
Ultimately it’s irrelevant. The President would have to sign off on this. President Biden would clearly not sign off on a bill rescinding his own signature proposal. But it’s a novel attempt and it’s one of those things that actually may put Democrats on the defensive because they will have to stake a position on what they think of the Biden administration’s loan plan. For some borrowers that will be very clearly they want their representatives to support it. For others, they may want them to oppose it, and not necessarily an easy vote for senators looking at reelection in a couple of years.
Sarah Spreitzer: So before we move from Congress to the administration, Jon, we always laugh that we always get the question, what’s going on with the Higher Education Act and the reauthorization of the Higher Education Act? And we actually have at least something slight to report for this Pop-Up. So what is going on with the reauthorization of the Higher Education Act?
Jon Fansmith: Yeah, I think the title of this Pop-Up was Hope for Loan Forgiveness and Higher Education Reauthorization.
Sarah Spreitzer: You just killed the hope for the loan forgiveness. So now let’s turn to the reauthorization of the Higher Education Act.
Jon Fansmith: These are very similar sets of circumstances, right? There is hope. It’s just very slim hope. But what’s important is, as difficult as it may be on the loan forgiveness program that the administration has proposed and the court challenges it faces and political opposition, when it comes to HEA reauthorization, there is a little bit of a spark there, right?
Virginia Foxx in the House has talked about, she’s chair of the Education & Workforce Committee, and she has talked very consistently and not just publicly, like her staff has reiterated this point. It is well understood she wants to put a Higher Education reauthorization bill forward in this Congress. She wants to see it move through committee, through the floor. I’m sure she would like to see it advance through the Senate and become enacted into law. I don’t think that is the likeliest outcome, that we’ll actually have a Higher Education Act reauthorization that is approved and that the President would sign and would be enacted. But it’s not impossible. And frankly, having a chair of the committee who has really identified this as a top priority, a lot of times where we see these things happening, where they actually get momentum, is somebody pushes forward, puts their ideas out there, and that invites a response.
Democrats and Republicans, over the last 15 years since it was last reauthorized, there’s huge areas of agreement. When you look at a lot of the areas where, and HEA now is I think a roughly 1,100-page bill. It’s a massive bill. You look at 80, maybe 90 percent of what’s in there and you can find bipartisan agreement. Maybe some slight differences on the approach or exactly what the policy would look like, but a lot of overall agreement. There’s just a few big tricky areas that have always kept it from happening, particularly around loans.
And whatever you do with loans and financial aid is going to cost hundreds of billions of dollars to change, or it’s going to save hundreds of billions of dollars. And that’s important because if you have a bill that makes loans less generous, makes financial aid less generous, it will save the government money. It will certainly be easier to pass among Republicans, especially fiscally conservative Republicans. But it’ll make it almost a nonstarter for Democrats, who will not want to vote in favor of something that cuts support to students, especially in a time when concerns about college costs are so high. The reverse is also true. If you make those programs more generous, you will lose a lot of Republicans, who will think this is fiscally irresponsible, especially on the heels of what we’ve seen the Biden administration doing that has really raised their ire over those proposals.
So it is a challenge. The idea that we’ll get there, we always kind of laugh, right, Sarah? I mean, you said it, about will it happen? It probably won’t happen to actually be reauthorized, passed into law, but action, motion, momentum, putting it behind it, getting these issues back into the forefront of the discussion, having open debate about what are the right policies to pursue. I think that’s all to the good.
And frankly, we have been saying for a long time, there’s a reason to do a Higher Education Act reauthorization. It’s not just Congress doing their responsibility. It’s that in 15 years we haven’t had a holistic look at higher education law and how it works together, how the loan programs interact with financial aid programs, how oversight on campuses works, and putting that all together is something that is long overdue. You wouldn’t want to do anything else based on the state of technology, the state of teaching, the state of higher education 15 years ago. I don’t know why federal laws are any exception to that.
Sarah Spreitzer: Well, I think one of the hopeful areas that we’ve heard about that there have been, we’ve heard from Chairwoman Foxx and from Ranking Member Scott, that they both would like to make short-term Pell a reality. And in fact, we’ve seen Chairwoman Foxx propose a bill, the PELL Act, and so maybe it’s not a reauthorization of the entire act, but maybe there is some hope for bipartisan legislation from those committees. Before we turn from the loan forgiveness, we did have one question about, which Steven could be helpful with, is would the Biden loan forgiveness plan, and when we’re talking about that, we’re talking about federal student loans is different from Public Service Loan Forgiveness, but would the loan forgiveness plan stimulate the economy and what are the tax implications if it is deemed legal by the Supreme Court?
Steven Bloom: Well, let’s start with the second half of that, the tax implications. Normally there would be tax implications, that it would be like a form of compensation that whoever receives it would have to pay taxes on it. But in the Biden administration’s first big bill, the Recovery Act bill, I can’t remember the specific name of it, but early in the Biden administration, they included a provision that would exempt this student loan forgiveness from taxation for five years. So there wouldn’t be any, if it’s upheld by the Supreme Court. And the first part of the question again, Sarah, because I’m old enough–
Sarah Spreitzer: It’s how will it stimulate the economy and will it stimulate the economy?
Steven Bloom: Well, there are those that are worried economists, some economists are worried that it’s essentially pumping more money into the hands of consumers because they wouldn’t have to pay student loan debt. The thing that I sort of scratch my head, and I am not an economist, I’m a lawyer by training, is students, and Jon and you guys know this better than I do, they haven’t been... Student borrowers haven’t been paying their loans for months, over a couple of years during the pandemic. And so it’s not as if it would be a new infusion of capital in the pockets of consumers that they’d have the ability to spend. They just would continue not having to pay these bills. So maybe in the long run you could see that it had a stimulative effect. But in the short term, I’m not sure how that case is being made.
Jon Fansmith: And I think it’s probably worth mentioning none of us are economists by training, but even frankly, economists disagree among themselves. And there is that argument about, well, if you know that you will not have that debt hanging over your head, you’ll feel more free spending. Certainly when repayments resume, which is supposed to happen at the end of summer, August 30th or so, having that relief in place will mean there are people who would otherwise be making student loan payments that come back in. Certainly there was some thought that the pause on repayment had an inflationary impact during the pandemic and through that point that people had more money available to spend as a result of not having to make those payments. But again, I’m kind of with you. It seems harder to say that, we’re going to be over three and a half years of non-payment other than voluntary repayment, that this is going to have a huge inflationary impact beyond certainly many other things that are happening in our economy that I think probably have a much larger impact than this would.
Steven Bloom: On–
Sarah Spreitzer: Well, oh, go ahead, Steven.
Steven Bloom: No, go ahead, Sarah.
Sarah Spreitzer: Well, we also got a question about the Public Service Loan Forgiveness program, which obviously the Biden administration has been very active in making that as broad as possible, issuing waivers to allow more people to qualify for it. The question is, for those that are already on the path of Public Service Loan Forgiveness, and given the current political climate, do we believe that it will continue to be so generous or in the ways that the Biden administration is structuring it?
Jon Fansmith: Yeah, it’s a great question. I think it’s also really important, and somebody in the chat mentioned this too, to be very clear that when we’re talking about Public Service Loan Forgiveness, the understanding that it is a entirely different and separate program from what the Biden administration has proposed for one-time loan forgiveness. The Biden administration has said you can get ten or twenty thousand dollars of your loans forgiven if you are under a certain income threshold and $20,000 if you received a Pell Grant at any point during your education. That’s for everyone who meets those terms, that’s broad-based loan forgiveness.
Public Service Loan Forgiveness has been in place since 2007, I think the program was passed, in 2007, 2008 was when the enacting legislation was passed, and this is a very different program. This is for people who are working in public service, generally defined as working for the government or working for a 501(c)(3) nonprofit organization. And the basic premise of Public Service Loan Forgiveness has been you work for one of those entities for 10 years, you make on-time payments, after those 10 years, all of your debts are forgiven. So if you borrowed $40,000 to go through undergrad and grad school, after your 10 years of payments, you would see all of that balance wiped out.
The Biden administration did something really interesting early on, well before they proposed broad-based loan forgiveness, they created a waiver program that, for Public Service Loan Forgiveness applicants, really made it a whole lot easier to access that benefit. For years, very few people, I think less than 1% of borrowers who applied for Public Service Loan Forgiveness actually received it because for a variety of reasons, there’s complications about you had to be in a specific loan program, you had to meet certain terms as to when the payments were made and who your employers were, and it became very difficult to document.
The Biden administration essentially opened that up and said, “We’re going to accept all sorts of different kinds of payments, including partial payments or multiple payments at one time. We’re going to apply it across all of the federal loans.” And it was hugely successful by that measure. They forgave about, I think 16 to 18 billion of student loans to hundreds of thousands of borrowers through that. But that was a limited time thing. They tied that to the emergency.
What they did while they’re doing that is simultaneously, they are changing the regulations under which Public Service Loan Forgiveness is handled, and they have those in place. Those should be taking effect, July 1st would be the effective date. They’re making it easier for people to essentially bring some of the parts of the waiver over to how they handle it. So it will be easier going forward for borrowers to apply for that, to get that.
Again, these are regulatory changes through the Biden administration. The question is about how secure that is. Well, how secure it is will depend on who wins the next presidential election. If it is a Democratic administration, these regulations will continue going forward. There might even be further tweaks to make them more borrower-friendly. If you see a Republican administration, it is far more likely that that will go away.
Republicans, particularly in the House, have proposed eliminating Public Service Loan Forgiveness, there is an argument to be made that why is one type of employment inherently more meritorious than another kind of employment? What are the rewards for it? I’m not going to get into the arguments around that or the debates around that, but Republicans are far more likely to strike down those provisions. Can’t change the underlying statute, but you can make that flexibility, that ease that’s been added. You can pull that back and you’re getting back, if you do that, into those times where less than 1% of borrowers are getting approved. It’s very difficult to move through the process. So it is very much at risk depending on what happens in 2024.
Sarah Spreitzer: Yeah. And I think we all remember the previous administration, it was less than 1% of the applicants were being approved. So we’ve kind of shifted towards the administration. And, Jon, I know you and our colleague Anne Meehan have been very busy on something called TPS, which Steven and I take to be a visa category, but you think of in a much different way, third-party servicers. What can you tell us about that?
Jon Fansmith: Yeah, interesting staff meetings where Anne and I both have one very clear definition of what TPS is and it’s completely different than what you two see.
Sarah Spreitzer: Yup.
Jon Fansmith: I’m sort of surprised in some ways we’re actually just getting to this now because this is the thing, at least certainly that I know Anne has been hearing a ton about, I’ve been hearing a ton about really more than any other issue. Not tons of time to go too deep on this, but essentially what’s happening is that the Department of Education has long been concerned about the role of online program managers, or OPMs, in higher education. There’s been media reports of contractual relationships between OPMs and institutions that led to bad outcomes for students, in some cases led to bad outcomes for the institutions themselves.
And last year, the Government Accountability Office issued a report after looking into this saying, fundamentally, the Department of Education doesn’t know enough to provide good oversight in this area, and they need to ask for more information. They need to gather more information about how widespread these contracts are, what they look like, the varieties of services offered to just perform oversight and accountability.
When the department looked at the various options for how they would do that, the one they settled on, somewhat surprisingly to a lot of people, they released new guidance on third-party servicers that expanded the definition of who would be a third-party servicer. And I think their intent was to include OPMs. Third-party servicers historically are really understood to be a specific role, assisting in the management and administration of Title IV operations in a financial aid office. Really a pretty technical part of higher education, but one that was well understood by everyone, what the rights and responsibilities were. By making the definition so much more expansive by trying to identify the categories of work that an organization could do on behalf of an institution, it looks like this guidance would pull every, or not every, but a large number of organizations doing things like study abroad programs, or if you are part of a consortium of institutions that co-develop curricula and offer courses jointly, then your institution would be a third-party servicer.
We talked about an association that provides a software tool for federal compliance to their members that if... That would be considered a third-party servicer because they’re helping with the administration of these programs. It is a real mess. The department has asked for comments. Those comments are due on March 30th. ACE will be submitting comments on behalf of the higher education community. We would encourage people who are following this and have those same concerns to submit their own comments. The more people hear about that, the better. We have prepared talking points that give a more detailed summary than I just gave of the issue, as well as some information that might be helpful if you do decide to submit comments for the record.
The guidance itself is not due to take effect until September 1st. That was delayed from it being immediately active. But the other big thing schools need to know about, and if you’re not following this, you really should be following this. Someone on your campus should be following this. On September 1st as well, institutions will have to report to the Department of Education all of the relationships they have with outside entities that would fall under this new guidance, and that will be very tricky. Lots of schools are not thinking of those relationships in these terms. There’s not an attempt to really pull that together. It’s going to be very, very hard for schools to do.
Final point, I know this is a... I want to leave a little time for a few other things, but one of the provisions in existing regulations is that a third-party servicer can’t be a foreign entity, run by a foreign individual based abroad. That’s important because lots of academic publishers are based in Canada or based overseas. Lots of information technology providers are based overseas, in foreign countries. So schools looking at a learning management system, which is the backbone of their educational enterprise, facilitating student interactions, if the vendor you get it from is Canadian, according to the Department of Education, by September 1st, you need to completely transfer that system to one that’s run by a U.S.-based entity.
It’s likely to cause massive, massive chaos on campuses. So, again, hopefully you’ve seen the talking points, get the seriousness of this issue. I encourage you to look into it if you haven’t already, and especially to make comments if this is of concern to you. But, Sarah, one last Department of Education regulatory issue, and we had a question about this one. I always like to ask you about Section 117, and Steven, we have Steven here too–
Sarah Spreitzer: Favorite regulation.
Jon Fansmith: Who also works on 117, so it’s the perfect group. Yeah. Talk a little bit about Section 117.
Sarah Spreitzer: I mean, what can we say about 117? It seems to be in much better shape than third-party servicers, at least.
Jon Fansmith: Not saying a lot.
Sarah Spreitzer: Section 117 is the foreign gift and contracting rule, which many have heard us talk about before, where you have to report foreign gifts or contracts over $250,000. It’s been on the books for about 30 years. The department has never carried out formal rulemaking around it. Our institutions have lots of questions about how to do the reporting. There’s a very problematic portal that our institutions report through. Recently, the department released a new information collection request, and really the purpose of that was to switch the reporting mechanism from the Office of the General Counsel, where it had been moved under the Trump administration, back to Federal Student Aid. And so we took that opportunity to submit a lot of questions, which Steven was also helpful in helping to prepare. But really it was a repeat of what we had submitted during the Trump administration because many of the information that they are asking for are things that were put in place under the last administration.
So it’s an ongoing issue. We’re going to be continuing to work on it. I don’t know whether or not Congress will get around to passing any legislation, but they will likely propose some legislation around foreign gift reporting. And so we will be watching that closely. But, Jon, we did have a question on TPS, which is a question I have for you too, is if the guidance is effective as of September 1st and we are going about this effort to get people to comment, what’s the likelihood it will be changed or it will be pushed back?
Jon Fansmith: Yeah. And this is probably a longer answer than the time allows, but just very briefly, the department has asked for public comments. I think they will probably hear from a lot of organizations that they think, frankly, the guidance itself should be rescinded, that there may not be a good way to fix the problem they are creating, even if they do attempt to make fixes. And we expect that they will make changes to the guidance by September 1st based on the feedback they get. There’s also going to be a negotiated rulemaking session on third-party servicers, which will kick off this year. So there will be a lot of information, a lot of public discussion, a lot of opportunities for the department to hear about the likely impact of what they’re proposing before that September 1st deadline comes. We obviously would like to see very significant changes to what they propose. Whether that will happen or not, I think we will definitely see some changes, exactly what they’ll be, exactly how expansive, whether they’ll address all of the concerns, that’s the bigger question right now.
And I really think we have now actually gone a little bit over our allotted time. Steven, I want to thank you so much for joining us. Maybe we’ll have to figure out some ways to get you back on for other topics as well.
Steven Bloom: Happy to do it. Thank you.
Jon Fansmith: And very thankful to all of you for joining us and submitting so many excellent questions. We could not get to all of them in time. You always make this a very lively session, and we appreciate your participation. Have a great rest of your day, and thank you for joining us.
Sarah Spreitzer: 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 the resources mentioned in the episode, you can go to our website at acenet.edu/podcast. 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.
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