Day One & Two Recap of the 2015 National Association of School Financial Aid Administrators Conference

On July 19, the National Association of School Financial Aid Administrators (NASFAA) held its 2015 Conference in New Orleans.  The conference program kicked off with the Keynote speaker Hill Harper, well known actor from CSI NY but also an author and philanthropist as founder of the Manifest Your Destiny Foundation, dedicated to empowering under-served youth through mentorship, scholarship, and Grant programs.

A Federal Town Hall session was held by U.S. Department of Education officials Jeff Baker, Lynn Mahaffie, and Carney McCullough plus several NASFAA officials. They answered questions from the audience on topics of current interest to the community.

The Session on Gainful Employment was, understandably, very well attended. The focus of the presentation included information on changes from the original GE reporting requirements to the current ones and some typical errors schools are making in reporting data and how to avoid them.

Several sessions revolved around projects within NASFAA to Re-imagine and Redesign Student Financial aid; reducing administrative burden, and simplifying R2T4 and the FAFSA. Other sessions focused on very specific topics of importance to the financial aid office that can be applied to real life situations such as unaccompanied homeless youth, R2T4 for module programs, verification changes, professional judgment and, new additions to consumer information. In addition to the specific topics related to financial aid, sessions addressed such topics as helping students borrow responsibly, and working with undocumented students.

Day one ended with an honest-to-goodness New Orleans parade from the Hyatt Regency to the French Quarter. The parade included a Brass Jazz band, a Boy Scout band and about 3,000 financial aid administrators. They do really know how to have a good time.

Will Others Follow? Virginia Requiring Transcript Notations for Sexual Violence

nicholas_hudalla_sm

Starting this month, certain Virginia institutions of higher education are required, by statute, to prominently note on a student’s transcript if the student is suspended for, has been dismissed for, or withdraws from the institution while under investigation for an offense involving sexual violence.  The statute defines “sexual violence” as physical sexual acts perpetrated against a person’s will or against a person incapable of giving consent, and requires that the notation is made in the following form:  “[Suspended, Dismissed, or Withdrew while under investigation] of [insert name of institution’s code, rules, or set of standards].”  The New York State Assembly followed suit, passing a similar law last month which requires institutions of higher education to include a notation on a student’s transcript if the student is suspended or expelled based upon a finding that the student committed an act of sexual violence.  The California State Legislature has also introduced a similar bill that would require institutions of higher education to indicate on a student’s transcript when the student is ineligible to reenroll due to suspension or expulsion during the period of time the student is ineligible to reenroll.  This bill has been re-referred to the California Senate Appropriations Committee.

One of the primary purposes of these statutes is to restrict a student’s ability to transfer to a new institution following discipline for or during investigation into sexual misconduct.  This issue has been gaining traction, but has also been met with some resistance.  A similar proposal in Maryland was halted after advocacy groups such as the Maryland Coalition Against Sexual Assault opposed the bill based on concerns that the requirement would turn disciplinary proceedings into fully litigated trials.

Even in the absence of a statutory requirement, institutional policies often mandate transcript notations in the event of misconduct.   As set forth in the pending California bill, however, existing institutional policies often have “significant inconsistencies” as they vary greatly from institution to institution.

As these statutes continue to gain attention, it will be interesting to see if and how other states choose to address the issue.

PROPOSED REGULATION ON OVERTIME PAY EXEMPTIONS

On March 13, 2014, President Obama signed a Presidential Memorandum directing the Department of Labor (the “DOL”) to update the regulations defining which white collar workers are protected by the Fair Labor Standards Act’s (the “FLSA’s”) overtime standards.  On July 6, 2015 the DOL published the proposed rule defining and delimiting the overtime exemptions for executive, administrative and professional employees.

The FLSA guarantees overtime pay when an employee works over 40 hours in a workweek.  However, certain executive, administrative and professional employees are exempt from these overtime pay protections.  To be considered exempt, employees must: (1) be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (the “salary basis test”); (2) the amount of salary paid must meet a minimum specified amount (the “salary test”); and (3) the employee’s job duties must primarily involve executive, administrative, or professional duties (the “duties test”).

Under the current regulations, an executive, administrative, or professional, employee must be paid at least $455 per week ($23,660 per year for a full-year worker) in order to come within the standard exemption.  The DOL’s proposed changes focus on what the DOL has recognized as the best single test of exempt status, the salary test.

In order to maintain the effectiveness of the salary test, the DOL proposes to set the standard salary level equal to the 40th percentile of earnings for full-time salaried workers (the DOL projects that the 40th percentile weekly wage in the final rule would likely be $970, or $50,440 for a full-year worker).  Furthermore, in order to prevent the levels from becoming outdated, the DOL is proposing to include in the regulations a mechanism to automatically update the salary and compensation thresholds on an annual basis.

While salaried workers such as teachers, academic administrative personnel, physicians, lawyers, judges and outside sales workers are not currently subject to the salary test, educational institutions may still anticipate an impact in entry and mid-level professional positions such as student life, development, administration and academic affairs.  Educational institutions with these types of employees that earn the current weekly salary level of $455 but less than the 40th percentile of earnings would become entitled to overtime protection under the FLSA.

Educational institutions have options in regards to how they decide to implement and administer the proposed rule change.  An educational institution, may of course, keep their current employment practices and pay the overtime wage.  An educational institution may also decide to implement a cap on hours or a reduction of hours for employees during the workweek, and then hire additional part time employees to cover the extra work.  If an employee’s salary is close to the 40th percentile of earnings threshold, an employer may raise the employee’s base pay to the threshold to avoid having to pay overtime.  Finally, educational institutions may lower hourly base pay to offset any overtime hours that may be incurred, as long as the hourly base pay remains above minimum wage.

The proposed rule is subject to public comments until September 4, 2015. After review of the comments, the DOL may issue a final rule change as soon as 2016.

House Committee Approves Labor-HHS Appropriations Bill

Earlier today, as reported in a Committee press release, the House Appropriations Committee approved the draft fiscal year 2016 Labor, Health and Human Services funding bill on a vote of 30-21.   The draft bill includes “$153 billion in discretionary funding, which is a reduction of $3.7 billion below the fiscal year 2015 enacted level and $14.6 billion below the President’s budget request.”  The bill text is substantially the same as the draft passed out of subcommittee on June 17.  The only changes to the text, as discussed in the press release, include the following amendments:

  • Rep. Cole – The amendment makes technical and non-controversial changes to the bill and report. The amendment was adopted on a voice vote.  
  • Rep. Roybal-Allard – The amendment designates $750,000 in funding within the Children and Families Services Programs account to be used for a Child Poverty Study. The amendment was adopted on a voice vote.
  • Rep. Kilmer – The amendment adds report language urging the Department of Education to provide clear and timely guidance to local school districts on how to calculate tax rates for the purposes of receiving certain types of federal aid. The amendment was adopted on a voice vote.
  • Rep. Harris – The amendment prohibits funding to implement or enforce a National Labor Relations Board ruling that allows certain groups of employees within a larger company to form separate unions. The amendment was adopted on a voice vote.
  • Rep. Kaptur – The amendment adds report language directing the Secretary of HHS, in consultation with the Department of Veterans Affairs (VA), to provide a report on certain prescription drug costs for Medicare, Medicaid, and the VA, as well as comparisons of these costs to other countries. In addition, it directs HHS to review and report on steps taken to competitively reduce prescription drug costs since 2001. The amendment was adopted on a voice vote.

As the bill summary for the draft bill explains, the bill funds the Department of Education at $64.4 billion, which is $2.8 billion below the fiscal year 2015 level and $6.4 billion below the President’s budget request.”  Notably, the bill retains prohibitions on the Department of Education from “moving forward with regulations to establish a college ratings system, place new requirements on teacher preparation, define ‘gainful employment’ and ‘credit hour,’ and dictate how states must license institutions of higher education.”  Rep. Rosa Delauro (D-CT) attempted to remove the spending prohibition related to gainful employment, but her amendment was defeated in a voice vote.

The bill also contains the following elements related to education:

  • Special Education – The bill includes $12 billion for IDEA special education grants to states, an increase of more than $500 million over the fiscal year 2015 enacted level, which will increase the federal share of special education funding to states from 16 percent to 17 percent.
  • Charter Schools Program – The bill includes an increase of $22 million over the fiscal year 2015 enacted level for grants to support the creation of new charter schools, for a total of $275 million.
  • Pell Grants – The maximum Pell Grant award is increased to $5,915, funded by a combination of discretionary and mandatory funds.
  • Impact Aid – The bill provides nearly $1.3 billion for Impact Aid, an increase of $10 million above the current enacted level.

The Senate Appropriations Committee takes up its version of the Labor-HHS appropriations bill tomorrow at 10:00am.  The Senate appropriations subcommittee approved the Labor-HHS appropriations bill on June 22.

 

Amendment to Remove Gainful Employment Rule Spending Limitation Fails in House Approps Committee

The House Committee on Appropriations is currently considering the draft appropriations bill passed by the House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies on June 17.  As mentioned previously, Section 309 of this bill contains a limitation on the use of funds to implement and administer the gainful employment rule.  Rep. Rosa Delauro (D-CT) offered an amendment (at 5:24 in the video) to remove this limitation from the  draft.  Rep. Tom Cole (R-OK) rose to the defense of the provision.  The amendment failed on a voice vote.

Senate Sub Committee Passes Labor-HHS Appropriations Bill; Full Committee Vote Tomorrow

In a markup held yesterday, the U.S. Senate Appropriations subcommittee on Labor, Health and Human Services, Education and Related Agencies (“Labor-HHS”) released a summary statement setting forth the key elements of the a $153.2 billion appropriations bill that passed the sub committee.  The full Senate Committee on Appropriations will take up the draft bill on Thursday.  The House Committee on Appropriations is currently considering the draft bill passed by the House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies on June 17.

“While the measure is $3.6 billion below the FY2015 spending level,” the summary statement notes, “the subcommittee increased funding for the National Institutes of Health, Community Health Centers, Head Start and the Child Care and Development Block Grant. ”  Of note, the bill would increase the maximum Pell Grant award from $5,775 in the 2015-16 school year to an estimated $5,915 for the 2016-17 school year.  In addition, the bill “prohibits the Department [of Education] from moving forward with regulations or policies to develop or implement a college ratings system, define gainful employment, establish requirements for the State authorization of higher education programs, define credit hour, and establish a new accountability framework for teacher preparation programs.”  Notably, Sections 309-313 of the House version (also see the draft conference report) of the appropriations bill has a similar limitation.

The other highlights for the Department of Education, as set forth in the summary, include:

  • The bill funds the Department of Education at $65.5 billion, a $1.7 billion decrease from FY2015.
  • Title I Grants to LEAs – $14.560 billion, a $150 million increase above FY2015. Title I provides basic and flexible funding to low-income school districts, that allows States, local school districts, and schools to decide how to best use limited resources improve student outcomes.
  • Individuals with Disabilities Education Act (IDEA) Grants to States $12.415 billion for grants to States under part B and C of the IDEA, a $125 million increase above FY2015, including preschool grants and grants for infants and families. These programs support special education services for children with disabilities from birth through age 21.
  • Charter Schools – $273 million, an increase of $20 million above FY2015. This program supports school choice through the planning, design, initial implementation, and expansion of successful charter schools.
  • Impact Aid – $1.289 billion, level with FY2015. The Committee recommendation maintains support for the Impact Aid program which provides flexible support to local school districts impacted by the presence of federally owned land and activities, such as military bases. The Committee rejects the administration’s proposed elimination of the Federal property program.
  • Supporting Effective Educator Development (SEED) program – The Committee increases the SEED set-aside within the Teacher Quality State Grants program from 2.3 percent to 5 percent. This program supports evidence-based approaches for recruiting, training, or providing professional enhancement activities for teachers and school leaders, particularly for high-need schools most likely to face shortages in these areas.
  • Supports State and Local Flexibility in Education – The Committee recommendation includes a new general provision affirming that the Federal government cannot mandate or incentivize in any way the adoption of any specific standards or assessments, including Common Core.

It is notable that Senate Democrats intend to block all appropriations bills in an attempt to force negotiations that will end domestic spending caps under the Budget Control Act.

Welcome to the Blog

We wanted to extend a very warm welcome to those of you who are new to the Higher Ed Law Blog.  We try to cover all things higher education and ed tech here – although we certainly stray into K-12 and education reform issues, like charter schools, education savings accounts and other tools to create school choice for parents.

Please check out our “About Us” page to learn more about the firm and the folks writing on the blog.  Our “higher ed resources” page attempts to list common higher ed web site and some links to key guidance documents and regulations.  While our calendar is a work in progress, we are hoping to list as many higher ed and ed tech conferences as we can – whether or not we are speaking or attending the conference.  Please send us your event and we will be happy to add it.

Of course, your suggestions are very welcome.  While we don’t allow comments on the site, we do welcome your thoughts.  Please feel free to send your comments to Dennis Cariello at dennis.cariello@hmbr.com.   This goes for comments of a technical nature, as well as comments related to the views expressed on this site.

So, thanks again for stopping by.  We really hope you like the blog.

DC Court Upholds Gainful Employment Rule

Earlier today, the District Court for the District of Columbia held that the US Department of Education’s (“Department”)”‘gainful employment‘ regulations—including the current debt-to-earnings test and disclosure, reporting, and certification requirements—survive this court challenge in their entirety.”  [JUNE 24 UPDATE – here are the Chronicle of Higher Education and Inside Higher Ed reports on the decision.] [ANOTHER JUNE 24 UPDATE – here are the statements from Department Secretary Arne Duncan and  APSCU’s General Counsel Sally Stroup.]  This follows a disappointing decision from the Southern District of New York also upholding the validity of the Department’s Gainful Employment Rule (“GE Rule”) published by the .  In so doing, the Court dealt an important win to the Department, although the effort does not seem to have concluded.  Not only may plaintiff Association of Private Sector Colleges and Universities (“APSCU”) appeal this decision, but the currently pending spending limitations in the Labor HHS appropriations bill preventing the Department of Education from using federal funds to “implement, administer, or enforce” the gainful employment rule (see page 119).

We will have a complete analysis of the decision in short order.    On a first read, however, it was interesting that the court accepted the Department’s argument that the clause “in a recognized occupation” in the phrase “gainful employment in a recognized occupation” sufficiently modified “gainful employment’ to make the phrase ambiguous enough to allow the Department to impose a debt-to-income metric.  Whatever the merits of the the GE Rule or the other merits of the decision, this seems pretty tenuous.  Indeed, the plain meaning of that phrase “recognized occupation” would seem to referred to something like Standards of Occupational Classification Codes.

Also interesting is that the Court disregarded the prior administrative rulings in cases like In re Academy for Jewish Education, where the Department argued that the program did not lead to gainful employment because the education did not provide skills to the student that would enable to them to hold a job.  This APSCU Court found that the because the training in question did not lead to any employment, “the Department had little reason to settle on a more nuanced definition for the full ‘gainful employment’ provision.”  This seems to miss the mark – the point is that the Department’s position in that case (and other administrative cases like it) was the Department’s interpretation of the whole phrase. Continue reading “DC Court Upholds Gainful Employment Rule”

Update to Comment Period on Student Loan Discharge Data Collection

On June 11, 2015, we discussed the issue of student loan discharge by virtue of the student having a state law cause of action against the school (pursuant to 34 C.F.R. § 685.206(c)(1)).  We also reported that “on June 10, the Department published a notice in the Federal Register seeking comment on a proposed “emergency collection” that would “facilitate the collection of information for borrowers who believe they have cause to invoke the borrower defenses against repayment of a loan.” (It does not look like there is a comment period specified).”  On June 16, the Department published a correction to the June 10 Federal Register Notice providing for a 60-day comment period for this collection. As a result, all comments must be due by August 17, 2015.

Jeanne Allen Takes Politico To Task for Calling Florida Education Reforms “Risky”

Here’s an interesting critique of a recent Politico piece (“Bush’s Risky Education Vision”) related to Governor Jeb Bush’s education reform record from one of the leaders of education reform, Jeane Allen.  On her blog,  Ms. Allen takes Politico to task for everything from getting the history of education reform wrong, as well as the idea that Governor Jeb Bush’s reforms were risky:

As Governor, Jeb Bush took on an unwieldy system and returned power to parents and citizens who had lost faith in public schools and whose own individual preferences and needs had long been ignored.  Students with special needs who had fought for services for their children obtained the right to choose schools to meet those needs. Thousands more families would benefit from scholarships aimed at ensuring they have the same opportunities afforded those who find themselves with more advantages. . . . Today over 615 charter schools serve more than 230,000 Florida students for whom traditional schools were not working.  . . . When Bush entered office, in 1999, more than sixty per cent of minority and low-income fourth graders couldn’t read at a basic level, which doomed them to failure in future grades. Barely half of Florida’s high-school seniors were graduating.

After Bush’s programs were enacted, Florida’s gains in math and reading, according to the federally funded Nation’s Report Card, were larger than they were anywhere else in the country—save Washington, D.C.  Florida’s graduation rate has improved twenty-five per cent, and is at an all-time high. This reversal came about because Bush measured results, held schools accountable, and exposed them to competition. Even as adults vested in the system protested, student achievement accelerated.  On top of that, higher education has exploded, improving life and economic conditions for scores more individuals at all levels of life.

She raises some good points.  No matter your views on the presidential candidates, it is difficult to describe any of the reform efforts undertaken by Governor Jeb Bush as “risky.”  Indeed, given that in 1983 we learned we were a “Nation At Risk” due to its poor education system, the status quo may have been the riskiest move of all.

(Note, I am a board member of the Center for Education Reform, a group started by Ms. Allen).