News

New regulations coming from ED

The Office of Management and Budget (OMB) released this week the updated Unified Agenda for the Department of Education (ED). The 19-item agenda details the agency’s regulatory priorities and provides a prospective timeline for action on each issue. It includes many topics highlighted by President Donald Trump through executive orders and other actions.

At a high level, these topics include:

• Reforming the Office for Civil Rights (OCR) enforcement of Title VI and Title IX violations
• Eliminating the application of disparate impact theory at ED
• Increasing penalties for colleges that do not properly disclose gifts from and partnerships with foreign donors
• Amending the Family Educational Rights and Privacy Act (FERPA) regulations
• Amending campus safety and security reporting requirements under the Clery Act

Of particular note for community colleges, the agenda also includes a new priority to revisit Title IV eligibility issues, including cash management, administrative capability standards, program length requirements and financial aid responsibilities. This priority is listed as in the pre-rule stage.

AACC will keep members informed of upcoming regulatory actions and opportunities for member colleges to weigh in on important issues.

AACC’s response to new OMB guidance

The American Association of Community Colleges (AACC) will submit comments this week in response to a pending proposal from OMB to radically overhaul the federal government’s procedures for awarding grant funds. As covered in Community College Daily, the proposal would turn the current “Uniform Guidance” into a formal regulation with the force of law and would apply across all federal grant programs.

AACC has several concerns with the sweeping regulatory changes outlined in the proposal. The key points of our comments include:

1. The proposed regulation subjects the grant-making process to an inappropriate and counterproductive degree of political influence. It undermines the time-tested principles of merit and peer review that have served community colleges, the government and the public well over time.
2. The proposed rule introduces a high degree of uncertainty into a process that should be reliable. In particular, it allows federal agencies to terminate grant commitments without advance warning and without appropriate justification.
3. Many community colleges have limited means to develop complex grant applications. The considerations outlined above would make it more problematic for colleges to devote resources to write applications.
4. The regulations will compromise congressional and therefore public accountability, by effectively transferring authority for determining the allocation and distribution of federal grant funds from the legislative to the executive branch.
5. Many of the policies that institutions would be required to certify that they are following are controversial and have unclear legal status. Institutions are currently required to comply with a variety of civil rights and other legal and constitutional protections, and this provides sufficient safeguards against unlawful actions by grantees.

AACC has also joined broader comments led by the American Council of Education.

Community colleges are encouraged to submit their own comments to raise these concerns and reinforce AACC’s position. Comments are due July 13. We also encourage institutions to share their comments and general concerns with their members of Congress on these important issues.

House Republicans introduce bill package to formally dismantle ED

Republicans on the House Committee on Education and the Workforce introduced on Thursday a set of 10 bills – called the “Less Bureaucracy, Better Education” package – designed to dismantle the Department of Education (ED). The bills seek to codify program transfers initiated under a series of Interagency Agreements (IAAs) executed by the Trump administration over the past year. In addition to officially and permanently moving programs, the bills remove from the Secretary of Education statutory authority over programs, effectively ending the agency’s remaining policymaking and oversight responsibilities. Among the bills include measures to permanently move career and technical education and adult education programs to the Department of Labor (DOL), Office of Postsecondary Education programs (to include TRIO and institutional aid) to DOL, Child Care Access Means Parents in School (CCAMPIS) to the Department of Health and Human Services (HHS), and Federal Student Aid to the Department of Treasury.

Notably, there are two IAAs not cross-walked in the new legislative package: the recent IAA moving civil rights enforcement to the Department of Justice (DOJ) and moving oversight of special education and rehabilitative services to HHS.

While these bills signal support for the IAAs from House Republicans, Democrats in both chambers remain vehemently opposed to these changes, making the bills unlikely to be enacted.

ED hosts summit on financial aid fraud

ED this week hosted an all-day summit in Washington, D.C., focused on combatting federal student aid fraud. Sponsored by the White House Task Force to Eliminate Fraud, led by Vice President J.D. Vance, the event featured remarks from Under Secretary Nicholas Kent agency inspectors general, federal law enforcement officials from the Department of Justice and the Federal Bureau of Investigation, cybersecurity and information technology industry leaders, campus financial aid and compliance officers, and individuals who had been victims of financial aid fraud. AACC’s Kathryn Gimborys attended on behalf of the sector. The event also featured an update from the Office of Federal Student Aid on the agency’s new real-time identity verification protocols for Free Application for Federal Student Aid (FAFSA) applicants.

In his remarks, Kent highlighted that the new FAFSA identity verification screening system, first implemented in April, has so far rejected more than 53,000 fraudulent applications, preventing more than $212 million in financial aid from being disbursed to fraudulent actors. Combined with enhanced verification measures implemented last summer and a new real-time data-sharing partnership with the Social Security Administration, the Department’s new protocols have prevented more than $2 billion in fraudulent disbursements. While this figure includes aid for applicants that would have been identified through institutions’ own fraud detection systems or through V4/V5 verification protocols prior to disbursement, it highlights the enormous scope of the problem that was, until this year, shouldered almost entirely by colleges conducting identity verification on their own.

Over the course of the day, officials continued to emphasize working closely with ED’s Office of Inspector General (OIG) to report instances of suspected fraud and identity theft. Acting Inspector General Mark Priebe shared that in the past year, OIG investigations into large-scale, coordinated fraud rings have resulted in more than $35 million in restitution, settlements, fines and recoveries of federal financial aid dollars. He also highlighted how OIGs across agencies work with law enforcement to identify and prevent transnational fraud rings affecting multiple government programs. While he assured attendees that each complaint is assigned and investigated, he acknowledged that the office can and will do a better job of following up with institutions to close loops. Several participants asked for more guidance on how to submit helpful reports to the OIG, and department officials agreed this would be useful information to provide for institutions.

Appropriations stalled in the Senate, still time for advocacy

Senate appropriators are still at an impasse on top-line FY 27 funding levels for defense and non-defense programs, and as a result the Senate Appropriations Committee has yet to mark up any of the 12 annual appropriations bills. Traditionally, the committee writes and approves appropriations bills on a bipartisan basis, as that is necessary to pass legislation in the Senate. Because of this, Senate bills are usually a good predictor of final funding legislation.

The House appropriations committee, on the other hand, has approved all 12 FY 27 bills on a partisan basis, including the all-important Labor, Health and Human Services and Education (LHHS-ED) legislation. The House bill eliminates or substantially cuts several important programs, including Adult Basic Education and DOL workforce programs, but it also includes small increases for top community college priorities, including $10 million increases for the Strengthening Community College Training Grants program and the HEA Title III-A Strengthening Institutions Program.

Due to these unforeseen delays, opportunities remain for community colleges to advocate in support of key federal programs. AACC’s top priority for the FY 27 LHHS-ED bill is for Congress to comprehensively address the multi-billion dollar shortfall in the Pell Grant program. The House bill patches the shortfall for one year only and pays for it by eliminating interest subsidies on undergraduate Direct Loans. In a recent letter, AACC urged Senate appropriators to permanently eliminate the shortfall without limiting student aid eligibility. AACC also called on the Senate to retain the House’s increases for SCCTG and SIP while rejecting the cuts made to other programs. AACC urges its members to contact their senators today in support of these positions.

Upcoming AACC events

• AACC will host a Federal Policy Update Webinar focused on accreditation issues on Wednesday, July 15, at 3 pm ET.
• Be sure to register for AACC’s annual Advocates in Action event in Washington, D.C. on September 15 and 16. Space is limited.
• AACC’s “Lead Through the Noise” is a special edition of its Future Leaders and Future Presidents Institutes in Washington, D.C., September 28-30. Registration is open.