Washington Update - December 2011

The supercommittee fails to strike a deficit reduction deal, Pell Grants targeted for cuts, graduates have new options to repay student loans, ED changes its definition of “direct threat,” some colleges are threatening to leave the military tuition assistance program, and more state-level developments regarding concealed weapons on campus.

Supercommittee Fallout
On November 21, the co-chairs of the Joint Select Committee on Deficit Reduction, colloquially known as the supercommittee, announced their failure to come to agreement on a package of spending cuts and revenue increases. The supercommittee was designed to eliminate procedural hurdles to a deal (such as a Senate filibuster), but it could not bridge the ideological gap between the parties. Because there was no agreement, the Budget Control Act, enacted to increase the debt ceiling in August, requires that $1.2 trillion in cuts be made through an across-the-board process called sequestration. Half of these cuts will be borne by defense; the other half will come from non-defense discretionary and some mandatory programs. Cuts to some areas are exempt or limited, including Social Security, Medicare and Medicaid. Pell Grants are exempt from automatic cuts from sequestration, but Congress could choose to cut Pell Grants in order to avoid reductions to other discretionary spending programs, which is likely because Congress must comply with strict caps on total appropriations. Other higher education financial aid and support programs will face cuts, either from automatic sequestration or from Congressional efforts to protect other programs, and it is not known to what magnitude. Potential outcomes include restrictions in Pell Grant size and eligibility, cuts to SEOG, TRIO, work study, higher federal student loan origination fees, shorter interest-free periods for student loans, and cuts to federally-sponsored research from the NIH, NSF, and Defense Department. Because sequestration does not begin until January 2013, it is also possible that Congress could arrive at an alternative deficit reduction plan at a later date, although it seems unlikely before the 2012 election given the intense polarization within Congress.

FY2012 Pell Grants
More immediately, there are proposals to resolve a shortfall in Pell Grant funding through cuts to eligibility. The Senate has reported an appropriations bill from committee; the House has not, but a draft proposal has been released. Both Senate and House would leave the maximum grant at $5,500, but the House would restrict eligibility, removing about 600,000 students from the Pell Grant program. The Senate bill protects eligibility, but would eliminate the six month no-interest grace period for borrowers after they graduate.

New Student Loan Repayment Option
In October, President Obama signed an executive order to provide immediate relief to a subset of borrowers with federal student loans. Starting in 2012, graduates may elect an income-based repayment option that would limit payments to 10% of income and forgive any remaining balance after 20 years. This option is expected to benefit 1.6 million borrowers (out of 36 million Americans with student loan debt). Additionally, graduates with more than one federal loan will be able to consolidate payments at a lower interest rate. These reforms do not provide any help to students with private loans, which often have higher interest rates and fewer protections for borrowers.

“Direct Threat”
The U.S. Department of Education (ED) has, apparently, changed its view on the definition of “direct threat.” Previously, it was understood that the exemption from Section 504 of the Rehabilitation Act and the ADA included students who pose a direct threat to themselves as well as others, providing universities with flexibility in addressing situations with students who are suicidal. As of a late October decision against Spring Arbor University, ED no longer considers students threatening harm to themselves as being covered by the “direct threat” exemption. This tracks the result of a 2010 Department of Justice (DOJ) final rule, in which the definition of “direct threat” was narrowed in the same manner. NASPA is working to set up a meeting with the ED Office of Civil Rights to discuss this change and request guidance for student affairs professionals. NACUA, the association of higher education general counsels, indicated in a research note that OCR does not currently plan to issue guidance. Until clarification comes directly from the administration or the courts, NACUA encourages institutions to ensure that policies focus on student conduct, rather than a disability, individualized assessments are made, reasonable accommodations are considered, and students are provided with due process.

Military Tuition Assistance Program Changes
The Department of Defense (DoD) has sought changes to the military’s tuition assistance program for active duty servicemembers to eliminate support for institutions of questionable educational value that heavily target members of the armed forces in their marketing. As a result, DoD is requiring colleges and universities that participate in the program to sign a memorandum of understanding outlining a variety of conditions. Many institutions have objections to some of the conditions, which affect both business processes and academic matters, such as the awarding of academic credit. The American Council on Education (ACE), which represents college and university presidents, has been working with DoD to resolve these concerns, with limited success. While DoD has refused to change the MOU, it has offered additional guidance that has satisfied some institutions. Others are unsatisfied and are threatening not to participate in the tuition assistance program. ACE has sent a letter to Secretary of Defense Leon Panetta asking for intervention and for the implementation date for the new restrictions of January 1, 2012 to be delayed. This could potentially affect your students who are active duty servicemembers, whether they are enrolled in online coursework or attend classes at your institution in-person.

Concealed Carry Update
In November, Wisconsin’s new concealed carry law took effect. The law allows holders of a permit to carry in all public places, with exceptions. Public universities and colleges may prohibit the carrying of concealed weapons in their buildings, but only if they post a notice. They cannot restrict carrying on other parts of campus.

A September state court decision in Oregon struck down an administrative policy that prohibited the carrying of concealed weapons on public university campuses. The court ruled that only the legislature has the authority to place restrictions on concealed carry permit holders. This makes Oregon the second state (Utah is the first) to have all public university campuses open to concealed carry.