General – Page 10

September 17, 2019 by Katherine D. Brodie

Gainful Employment- October 1 Data Reporting Deadline for 2018-2019

On July 1, 2019, the U.S. Department of Education published a final rule rescinding the Department’s gainful employment (GE) regulations (2014 Rule) in the Federal Register. Institutions were given the option to early implement the rescission of the GE rule. Institutions that did not early implement the rule are still required to comply with the 2014 rule until the rescission becomes effective on July 1, 2020, and are expected to report GE data for the 2018–19 Award Year to National Student Loan Data System (NSLDS) by October 1, 2019. Compliance with the GE rule would be monitored via annual Title IV compliance audits and Title IV program reviews.

Detailed information about the use of NSLDS for reporting GE data is provided in the NSLDS Gainful Employment User Guide, available on the NSLDS User Documentation page of the Information for Financial Aid Professionals (IFAP) website, as well as from the “Resources” section of the Gainful Employment Information Page.

August 30, 2019 by Kristina Gill

U.S. Department of Education Issues Final Borrowers Defense to Repayment Regulation

This afternoon the U.S. Department of Education posted the pre-publication notice of the Final Borrowers Defense to Repayment regulation which rewrites the regulations promulgated under the Borrower Defense to Repayment provision of the Higher Education Act (HEA). A summary of the rule can be found here. The official version will be published in the Federal Register. Continue reading “U.S. Department of Education Issues Final Borrowers Defense to Repayment Regulation”

August 14, 2019August 14, 2019 by Duane Morris

Webinar: How the CCPA Impacts the Higher Education Industry

The California Consumer Privacy Act of 2018 Webinar Series will be hosting its third installment, “How the CCPA Impacts the Higher Education Industry,” to be held on September 5, 2019. The webinar will be presented by Duane Morris attorneys Brandi A. Taylor and Michelle Hon Donovan.

Photo of attorney Michelle Hon Donovan — Michelle Hon Donovan

This session provides an overview of the new law and how it applies to schools and companies in the education sector. Nonprofit educational institutions are exempt from the new law. However, it will apply to any for-profit education institutions, service providers and technology companies that collect any information on California residents and meet any of the following criteria:

Have an annual gross revenue of $25 million or more;
Collect, sell or share for commercial purposes the personal information of at least 50,000 consumers, households or devices annually; or
Derive at least 50 percent of annual revenue from selling consumers’ personal information.

To register for this webinar, please visit the Duane Morris website.

August 5, 2019August 9, 2019 by Duane Morris

U.S. Department of Education Rejects California’s Student Complaint Process But Provides Path to Compliance

Late on Friday, August 2, 2019, the U.S. Department of Education sent a letter to the California Department of Consumer Affairs that rejected California’s proposed complaint process for Californians attending online programs offered by out-of-state public and nonprofit institutions, but provided a clear path to compliance and a promise not to disrupt federal student aid, assuming California takes the steps outlined in the letter. We previously summarized aspects of the 2016 State Authorization Rule in our July 23, 2019, and July 26, 2019, Alerts.

Here are four key takeaways from the Department’s letter.

1. Federal student aid to Californians will not be disrupted IF California takes the steps outlined in the letter to meet the 2016 State Authorization requirements.

The Department’s August 2letter “assumes” California will do three things: (1) modify its plan to refer student complaints to a California state agency for adjudication, (2) require a California state agency to oversee the investigation of the student complaints and resolve them, according to applicable California state law, and (3) receive complaints regarding issues starting from at least May 26, 2019, the date that the 2016 regulations went into effect.

To read the full text of this Alert, please visit the Duane Morris website.

July 3, 2019August 13, 2019 by Duane Morris

California Legislation Targeting For-Profits Progresses

A package of seven interrelated bills proposing tighter regulation of for-profit and private colleges in California moved closer to becoming law this week — but not fully intact.

One of the bills, a proposal to create the nation’s first state-level gainful-employment rule, was watered down to require only the collection and disclosure of data around employment outcomes of graduates at for-profit colleges.

To read the full text of this article quoting Duane Morris partner Anthony J. Guida Jr., please visit the Inside Higher Ed website.

July 1, 2019August 2, 2019 by Duane Morris

Gainful Employment Rescinded with Option for Early Implementation

On July 1, 2019, the US Department of Education published a Final Rule addressing Program Integrity: Gainful Employment (“GE”) in the Federal Register. The regulations rescind the 2014 GE regulations and remove them from subpart Q (gainful employment programs) of the Student Assistance and General Provisions in 34 CFR part 668. The regulatory action also rescinds subpart R (program level cohort default rates) of the Student Assistance and General Provisions in 34 CFR part 668. The regulations are effective July 1, 2020, however, the Secretary is exercising her authority to allow any entity subject to the regulations to choose early implementation.

On June 28, 2019, the Department published Electronic Announcement #122 to provide additional guidance to institutions regarding early implementation of the rule. If an institution chooses early implementation, they must document the early implementation decision internally. An institution does not have to publish its decision to do so; however, it must make such documentation available upon request by the Department. Institutions that do not early implement the rule are expected to comply with the 2014 GE regulations until the rescission becomes effective on July 1, 2020. Continue reading “Gainful Employment Rescinded with Option for Early Implementation”

June 12, 2019July 30, 2019 by Duane Morris

U.S. Department of Education Confirms New Reporting Requirements Apply to Public Colleges and Universities

On June 3, 2019, the U.S. Department of Education issued a Q&A document regarding compliance with the BDR Rule that confirmed that the reporting requirements for certain “triggering” events will be enforced at all institutions, including public colleges and universities. This information supplements the Department’s March 15, 2019, guidance regarding the 2016 BDR Rule.

The Department’s Q&A makes clear that public institutions are required to report, pursuant to 34 C.F.R. 668.171(h), the following events within the stated time periods:

Borrower-defense-related lawsuits brought by a federal or state authority: within 10 days after the institution is served with the complaint and then again within 10 days after the suit has been pending for 120 days.
All other lawsuits: within 10 days after the institution is served with a complaint, then again within 10 days after the court sets certain deadlines relating to motions for summary judgment (MSJ) or disposition, and then a third time within 10 days after certain events relating to an MSJ or dispositive motion occur.
Any debt or liability arising from a final judgment in a judicial or administrative proceeding: within 10 days after a payment was required or the liability was incurred.
Any settlement, including settlements reached prior to the initiation of a formal legal proceeding: within 10 days after a payment was required or a liability was incurred.

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To read the full text of this Alert, please visit the Duane Morris website.

May 8, 2019July 30, 2019 by Duane Morris

Deadline Draws Near for Compliance with U.S. Department of Education’s 2016 Borrower Defense to Repayment (BDR) Rule

The deadline for complying with certain provisions of the U.S. Department of Education’s borrower defense regulations is Tuesday, May 14. These requirements are summarized briefly below and in greater detail in our March 21, 2019, Alert and April 9, 2019, Alert.

Arbitration Agreements and Class Action Waivers

Starting Tuesday, May 14, schools must either stop using binding predispute arbitration agreements and class action waivers or include the language from the regulation removing borrower defense claims from the scope of these agreements. In addition, starting May 14, students who previously signed a binding predispute arbitration agreement must be provided with specified notice language no later than upon exit counseling or the filing of the school’s initial response to a demand for arbitration or service of a complaint involving a borrower defense claim.

To read the full text of this Alert, please visit the Duane Morris website.

April 9, 2019July 30, 2019 by Duane Morris

The Trouble with Triggers: Newly Effective Postsecondary Institution Reporting Obligations Under the Borrower Defense to Repayment Rule

Specifically, this Alert explains the obligations of postsecondary institutions participating in Title IV, Higher Education Act (HEA) programs to affirmatively report to the Department the occurrence of certain “triggering” events that occur after March 15, 2019, many of which must be reported to the Department within 10 days of occurrence.

This Alert also describes the “grace period” provided by the Department in the guidance for institutions to affirmatively report to the Department certain triggering events that have already occurred between July 1, 2017, and March 15, 2019 (the period from the effective date of the 2016 BDR Rule to the date of the guidance). The deadline for reporting events occurring during the grace period is May 14, 2019.

As explained below, the 2016 BDR Rule contains both “mandatory” and “discretionary” triggering events that, after reporting, may cause the Department to recalculate the institution’s composite score—a ratio used by the Department to measure an institution’s financial health. If the recalculated score fails or is in the zone, it could lead to a letter of credit or letter of credit alternative requirement, heightened cash monitoring restrictions, provisional Program Participation Agreement status and/or other Title IV participation restrictions.

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To read the full text of this Alert, please visit the Duane Morris website.

March 21, 2019July 30, 2019 by Duane Morris

Implementing the 2016 Borrower Defense to Repayment (BDR) Rule – Arbitration Agreements and Class Action Waivers

This Alert addresses the actions that postsecondary institutions participating in the federal Direct Loan Program must take now and in the near future if they require students to enter into binding pre-dispute arbitration agreements or class action waivers with the institution. Below, we address how the guidance may affect ongoing arbitrations and current and future arbitration agreements. We will cover the financial responsibility reporting requirement triggers in our next Alert.

The March 15, 2019, guidance makes clear that the 2016 BDR Rule is now in effect. Accordingly, schools are no longer permitted to rely on binding pre-dispute arbitration agreements and class action waivers with Direct Loan borrowers in connection with so-called “borrower defense claims.” Borrower defense claims are those based on an act or omission of the institution attended by the claimant student that relates to the making of a Direct Loan for enrollment at the institution or the provision of educational services for which the loan was provided. The guidance excludes, for example, personal injury tort claims and sexual and racial harassment claims from being categorized as borrower defense claims. Other claims, such as educational malpractice claims, may also be excluded, so long as they do not meet the definition of a borrower defense claim.

Schools should keep in mind certain key deadlines as they work with counsel to determine the best path forward for complying with the 2016 BDR Rule.

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To read the full text of this Alert, please visit the Duane Morris website.