Many of the reforms needed to fulfill the promise of educational opportunity in this country require action by Congress; the Biden administration must work with the legislative branch to pursue these goals, particularly in addressing college affordability and responding to the COVID-19 pandemic.
However, there are a number of independent actions that the administration can take to swiftly improve the system.
Increase college affordability and provide debt relief in the COVID-19 era
The COVID-19 pandemic has worsened what was already a crisis in college affordability and student debt. To address the negative effects of student debt, the administration should expand its pause on student loan payments and collections to include all student loan borrowers, including as many as 9 million borrowers who have been left out of COVID-19 relief due to the type of loan they borrowed.
To help stimulate the economy and address the racial inequities in student loan debt—particularly the burden on Black borrowers—the Department of Education should pursue its commitment to provide at least $10,000 in universal relief to all student loan borrowers, whether through executive action or in collaboration with Congress. In addition, the department has the authority to target more relief to specific groups of borrowers, such as borrowers who die or have a total and permanent disability as well as those who have been misled by predatory colleges. It should also prioritize clearing the backlog of applications from defrauded borrowers whose “borrower defense” claims were stalled for years by Betsy DeVos’ Education Department.
Additionally, the payment pause offers an opportunity for the administration to reimagine how borrowers are treated when they default on their loans. Punitive measures, such as aggressive debt collection that uses tools to seize wages and tax benefits, should be replaced with a more humane system that helps borrowers get into good standing. This means better aligning administrative wage garnishment with the terms of income-based repayment, ending the use of the Treasury Offset Program for forced collections, reducing collection charges, and creating a statute of limitations on collections.
When the payment pause ends, the Education Department should work with servicers to better help struggling borrowers to access income-driven repayment (IDR) programs, give defaulted borrowers access to IDR, and make available more data on the loan programs to allow researchers to assess the programs and develop interventions to help borrowers. The department should also prioritize implementing the Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act passed in late 2019, which enables the IRS and the Department of Education to use shared tax data to automate the annual process of recertifying borrowers’ eligibility—a process that currently can needlessly expel participants from the program over missing paperwork.
One looming crisis that Cardona will inherit: The system that services federal student loans is on the verge of breaking down thanks to expiring contracts, years of missteps by DeVos, and interference by Congress. Current contracts with servicing companies begin expiring in December, and there is no viable replacement system to handle millions of borrowers and billions of dollars in payments. The administration must make immediate decisions about the best way forward and then work with Congress to get a solution approved and funded.
Ensure quality and accountability
During and after the Great Recession, low-quality and outright fraudulent for-profit colleges siphoned away billions of dollars in taxpayer-funded financial aid while leaving many students with worthless credentials, credits that didn’t transfer, and debt that they couldn’t repay—outrages that disproportionately harmed Black and Latinx students. The danger of repeating this history is a serious one, given that the Trump administration dismantled the protections put in place under President Barack Obama and for-profit college enrollment is again on the rise. But it’s not just for-profit colleges that are in need of better oversight; the federal government spends more than $120 billion a year on grants and loans, and every year, millions of students put their faith in this system as their path to a better life.
The Center for American Progress and other organizations have recently outlined some of the most important steps for the Education Department to take in order to increase accountability. These include reinstating regulatory requirements—removed by DeVos—so that for-profit colleges must show that their graduates can obtain gainful employment with their degrees. Moreover, while Congress needs to close a loophole that allows predatory colleges to take advantage of veterans and stay afloat based on their GI Bill benefits, the administration could tackle the problem from another angle by setting standards for colleges to demonstrate that they are not fully dependent on federal aid to keep their doors open.
The administration should also reverse the significant damage done by DeVos to the government’s oversight of accreditors, a group of private nonprofits that the government entrusts with verifying that colleges are of high enough quality for their students to receive federal grants and loans. Improved oversight should include more rigorous reviews of accreditors and reforms to the review and monitoring process, which does not require legislation.
The Education Department should also reform its financial oversight of colleges—particularly those at risk of closure—to make sure that they are serving students and using federal financial aid funds responsibly. The department can also close regulatory loopholes that allow colleges to operate even when their students are unable to get good enough jobs to repay their loans. For example, low-performing colleges use tricks to keep their former students out of loan default just long enough to escape a three-year window during which these defaults are tracked. Treating a loan forbearance the same as a default and monitoring defaults beyond the three-year window would disable the most commonly used tricks and provide greater transparency into how schools perform.
The Office of Federal Student Aid (FSA)—effectively the fifth-largest bank in the United States—must also be subject to closer oversight from the department and be restructured to better use its authority for consumer protection and monitoring colleges receiving aid for potential waste, fraud, and abuse. In addition, the administration should restore the role of the Consumer Financial Protection Bureau as a watchdog on student loan issues, including the activities of FSA and loan servicers.
Finally, the Education Department should use new authority granted by Congress to regulate how institutions calculate the nontuition price of college, which factors into financial aid awards. This could mean creating standards that prevent institutions from setting cost-of-attendance estimates that are too low, which colleges may do to discourage borrowing or appear more affordable than they really are.
Demand a focus on equity
Redressing the ways in which the higher education system reinforces inequity should be foremost in the minds of administration officials as they tackle the priorities of affordability, accountability, and data transparency mentioned throughout this column. Another way to improve racial equity is to take a more expansive view of the work of the department’s Office for Civil Rights (OCR). In addition to investigating allegations of discrimination based on race, sex, and other factors, the OCR could be more proactive in rooting out inequitable practices on college campuses, ranging from where colleges recruit to who gets more financial aid to what groups of students find a welcoming environment in STEM fields. FSA could also use its program reviews of colleges to conduct equity audits that would identify whether certain student groups are suffering worse academic or loan outcomes.
The administration could also use the bully pulpit to address some of the most egregious inequities in higher education. Instead of attacking efforts to address racism in past or present, as the Trump administration did, President Biden could appoint a commission to examine the plight of Black borrowers, whose loan outcomes are so dismal that 12 years after starting college, the average Black bachelor’s degree recipient owes more on their loans than they originally borrowed.
Finally, the Department of Education must ensure that students are afforded an accessible and fair process for adjudicating cases of sexual assault and harassment as well as discrimination based on sexual orientation and gender identity under Title IX.
Improve data and transparency
While the Department of Education has made strides in recent years to collect and share better data, there are still major shortcomings that limit the public’s ability to assess colleges’ governance and student outcomes—especially in terms of how they are serving students of color and the increasing share of older students, who are more likely to be working and raising a family. The administration can use its authority to shine a light on many existing blind spots.
The administration should take a series of actions as quickly as possible. It should use its new authority to add race and ethnicity to financial aid applications and collect data on student loans. In addition, the public College Scorecard tool can be improved with data already in the Education Department’s hands; and the department should make it routine practice to release oversight documents such as reports submitted by accreditors and audits of colleges. Finally, the department should track outcomes on students enrolled in distance education during the pandemic and ensure that colleges are meeting regulatory requirements governing the quality of online instruction.
Conclusion
Today’s political environment is challenging, to say the least, and the future of higher education depends to a large extent on Congress’ ability to act. Regardless, the new administration has the opportunity to make significant and lasting changes to combat the economic effects of the pandemic, ease the student debt burden for millions, and help this country move toward renewing the promise that a college education should lead to a better life.
Marcella Bombardieri is a senior fellow at the Center for American Progress.
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