Washington Update: New Rulemaking on BDR and Gainful Employment; Proposed Cuts to Facilities and Administrative Costs; and More

New Rulemaking on Borrower Defense to Repayment and Gainful Employment
The U.S. Department of Education last week announced that it will re-open rulemaking on two Obama administration-era institutional accountability and student protection rules: Borrower Defense to Repayment (BDR) and Gainful Employment (GE). APLU released a short statement noting that “changes can be considered, but we should not go backward in protecting students from institutions with fraudulent practices and terrible outcomes.”

BDR was due to go into effect on July 1, but will now be largely frozen. As reported by Inside Higher Ed, the administration will issue a stay on BDR that allows the Department to halt the effective date pending judicial review. The rule is presently being challenged by an association of California for-profit colleges. In general, the rule expands students’ ability to seek loan forgiveness from the Department of Education in cases of wrongdoing by institutions such as breach of contract or misrepresentation. The Department of Education can seek recovery from institutions for forgiveness granted to a student or groups of students. The rule also amends financial responsibility standards required of private institutions of higher education. APLU submitted comments to the proposed rule noting support for ensuring students have redress in egregious examples of institutional wrongdoing while expressing concerns that the Department had not established clear definitions of the kind of wrongdoing that would give rise to successful claims and did not articulate procedural protections for institutions. Some concerns were addressed in the final rule and a supplementary procedural rule released in the final hours of the Obama administration.

The GE rule sets disclosure/transparency and accountability standards for a majority of for-profit programs and some non-degree vocational programs of non-profit private and public institutions. To maintain Title IV eligibility, gainful employment programs must meet minimum standards of debt to earnings ratios. The disclosure requirements of the GE rule are already in effect, though the penalties component of the rule have not yet been applied. It is unclear whether the Department can conduct rulemaking in time for a new rule to be in place before programs would fail GE requirements for a second time, thus triggering sanctions.

APLU sends letter on F&A proposal to HHS and OMB
APLU sent a letter to Health and Human Services Secretary Tom Price and Office of Management and Budget Director Mick Mulvaney, expressing deep concerns about a proposal in the FY2018 president’s budget request to cap federal support for facilities and administrative (F&A) expenses at 10 percent for NIH grants, which would have a dramatic impact on universities’ ability to conduct critical life-saving research. The letter also highlights the very real consequences expected if such a plan were enacted. Capping F&A reimbursements would effectively mean cutting research since universities would not be able to afford to conduct research for the federal government if the research grants would not cover the costs of necessary research infrastructure. Other university associations also sent letters to Secretary Price and Director Mulvaney, and many universities are doing so as well. Universities are encouraged to include specific impacts of the cut on their research efforts, including job losses, lab closures and the kinds of research the institution would no longer be able to conduct.

Associations Send Letter to House Science Subcommittees on F&A
APLU along with the Association of American Medical Colleges, the Association of American Universities, the Council on Governmental Relations, the Association of Independent Research Institutes, and the American Council on Education sent a letter to the House Science Subcommittees on Research and on Oversight for inclusion in the hearing record for the joint hearing the two subcommittees held on May 24 on facilities and administrative (F&A) costs. The letter highlights the importance of federal support for F&A costs, which are essential to conducting research, and cites several consequences of imposing caps on federal research grants.

Association and Institutional Letter Urging Strong Support for EPA Office S&T
Earlier this month, APLU sent a university and organization sign-on letter to Senate and House appropriators urging strong funding for the EPA’s Office of Science and Technology in FY2018. The letter urges appropriators to “provide the EPA Office of Science and Technology (S&T) with $754 million, which would help restore funding for important research across the Nation.”

Defense Health Research Consortium Letters
Also earlier this month, the Defense Health Research Consortium sent letters to the House and Senate Appropriations Subcommittees on Defense urging strong “continued support for the critical and highly successful defense health research programs funded through the Congressionally Directed Medical Research Programs (CDMRP) at the Department of Defense (DoD)” in FY2018 appropriations. The letters were signed by 101 universities and organizations, including APLU.