Dear Colleagues:

Thank you to those who have reached out to NAICU and who participated in our webinar last week regarding the Department of Education’s recent guidance that could hold college leaders and board members personally liable for financial losses related to student aid programs.  We know there is growing concern on campuses about the guidance since it does not exclude private, nonprofit college and university leaders. 

Throughout the last week, NAICU has remained in discussions with Department officials about the guidance and its potential impact.  Earlier this week, I sent a letter to Education Secretary Miguel Cardona stressing the concerns we have with the guidance.  I know there are many, and my letter highlighted several, including: 1) the chilling effect this could have on the ability of institutions to recruit board members and senior campus leaders; 2) the likely impact on both the availability and cost of indemnity insurance; and 3) the negative consequences of a sudden loss of Title IV access for an institution’s students.

During last week’s webinar, Deputy Under Secretary Ben Miller described the Department’s reasoning for and objectives of the guidance and fielded questions from NAICU presidents and other campus officials.  Following the webinar, we created a brief issue overview of the guidance and some additional insights we have gained from the Department.

Feedback from both the webinar and ongoing conversations with Department staff indicate that they do not believe they can exclude private, nonprofit colleges leaders because they are simply enforcing existing language in the Higher Education Act and not proposing a new regulation.  This is the case even though the guidance is intended to allow the Department to hold for-profit colleges like Corinthian and ITT Tech liable for large amounts of debt owed.  As our letter to the Secretary indicates, we do not agree with their interpretation. 

The Department has also indicated it is not expecting to focus on smaller traditional private, nonprofit colleges and may provide future assurances to the sector.

NAICU will continue to work with the Department on a solution that does not undermine the intent of holding certain colleges accountable for large financial student aid debt, while protecting the ability of private, nonprofit institutions to attract and retain the strongest campus leadership and boards without threatening important student aid programs.   

Soundbites

• NAICU joined others in the higher education community in sending comments to the U.S. Citizenship and Immigration Service (USCIS) in response to its proposal to increase certain immigration and naturalization benefit request fees.  The comments reflect the community’s understanding that while it has been several years since these fees were increased, concerns remain that a post-pandemic increase will harm efforts to continue welcoming back international students who want to study in the U.S. 
• Due to changes made in the FAFSA Simplification Act, the Department of Education is required to obtain the amount of income an applicant has earned from work under the Federal Work-Study program directly from the student’s institution.  This is required for the purposes of calculating the applicant’s student aid index and determining their eligibility for certain Title IV aid. The Department issued a notice alerting institutions that they can submit feedback on the form that would be used to provide this information.  Feedback is due by May 15, 2023.

Today’s Washington Update covers a new CBO report on the cost of President Biden’s income-driven repayment plan and an effort by the Education Department to use secret shoppers to ensure that colleges and universities are complying with the laws and regulations governing participation in the federal student aid programs.