[Senate Hearing 116-]
[From the U.S. Government Publishing Office]



 
  DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND 
          RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2020

                              ----------                              


                        THURSDAY, MARCH 28, 2019

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The Subcommittee met at 10:09 a.m. in room SD-124, Dirksen 
Senate Office Building, Hon. Roy Blunt (chairman) presiding.
    Present: Senators Blunt, Alexander, Hyde-Smith, Rubio, 
Lankford, Murray, Durbin, Reed, Shaheen, Merkley, Baldwin, and 
Murphy.

                        DEPARTMENT OF EDUCATION

                        Office of the Secretary

STATEMENT OF HON. BETSY DeVOS, SECRETARY
ACCOMPANIED BY LARRY KEAN, DIRECTOR, BUDGET SERVICE


                 opening statement of senator roy blunt


    Senator Blunt. The Appropriations Subcommittee on Labor 
Health, Human Services, Education, and Other Related Agencies 
will come to order. We started a few minutes late; the good 
news is I will submit part of my opening statement for the 
record as a result of part of the delay being on me. Glad we 
are here. This is our first budget hearing of this year.
    Thank you, Secretary DeVos for appearing before the 
Subcommittee again today to discuss the Department's fiscal 
year 2020 budget request and help us kick off our process for 
this year. Last year we passed the Labor-HHS bill prior to the 
start of the fiscal year for the first time in 22 years. The 
conference agreement received 93 votes on the Senate floor. It 
is a pattern that I would like to see developed, but of course 
you do not have a pattern until year two, and so being able to 
do this again one more time would make a big difference. I hope 
we begin a trend that starts today.
    Last year we got 75 percent of the Government funded before 
the beginning of the fiscal year. The lesson of the shutdown 
should be that we should figure out what we did for 75 percent 
of the Government and figure out how to get it done for 100 
percent of the Government.
    I would say the big obstacle we face in getting that done 
is having a number we can work with, and I want to go back to 
that as I talk about the budget that you have submitted. The 
importance of having a number and having it early really 
matters. We had that last year. Many of us on this Committee 
advocated that that number that we would actually be able to 
use would be available, maybe as part of the beginning of the 
fiscal year for those agencies that were not funded last year. 
I was disappointed that that did not happen, but it did not.
    The fiscal year 2020 budget request for the Department is 
$64 billion in discretionary funding. That is almost 10 percent 
less than the amount last year.
    Now the request, frankly, is similar to last year's request 
in many respects. Like last year, it eliminates or consolidates 
approximately 30 programs; it significantly reduces funding for 
several others. All of the programs sponsored for elimination 
or significant reductions were proposed to be eliminated last 
year, too. I appreciate the decisions you have to make and just 
as we approach this budget, we need to do that remembering that 
while we are unlikely when we finally appropriate, to be bound 
by the Budget Control Act, it is the law, and the 
Administration does not have quite the flexibility to wait for 
time to catch up with the law that we do.
    Discretionary spending under the Budget Control Act would 
reduce spending for non-defense by 9 percent this year. To 
remind my friends on the Committee, President Trump did not 
sign the Budget Control Act, President Obama did. Secretary 
DeVos did not vote for the Budget Control Act, almost every one 
of us who were here when we passed it, did. And that is the 
law. It is a law that for the last couple of times, at least, 
we have figured out that it did not seem to make sense in the 
current circumstances, but it is the law as it was put 
together, and it is still the law.
    We would not be having this hearing in exactly the same way 
if we would have come up with what I believe, would have been 
more realistic numbers, both for defense and non-defense, as 
part of ending last year's work. We did not get that done and I 
hope we do get that done quickly.
    The President's Budget proposes to reduce non-defense 
discretionary by $55 billion. That is almost exactly the 
reduction required by the law. The 9 percent that the law would 
require the President to use as his top number is the number 
that the President's Budget has submitted.
    I agree that we really have to constantly evaluate programs 
and be willing to reduce or eliminate funding for programs that 
are ineffective and prioritize that funding elsewhere. In fact, 
Senator Murray and I and others on this Committee did this, 
particularly the first 2 years. We worked together when there 
was no new money, we set some significant new priorities, and 
by doing that, I think we either eliminated or combined 32 
different programs.
    So, we have capacity to do that, and we should have the 
capacity to hear you out and look at the programs that you 
think we need to look at more carefully.
    There are programs here that are unlikely to be eliminated 
in any final budget and I am sure they will be vigorously 
discussed, but I would remind my colleagues the one reason we 
have had, for 3 years now and for the first 3 years in well 
over a decade, a bipartisan committee report out of this 
Committee, is that we have worked hard not to make things we 
agree on more partisan than they need to be.
    This budget is not that much different from the budget the 
President submitted last year. My guess is that the work of 
this Committee will not be that much different from the work of 
this Committee last year--the work of this Committee, what we 
did last year, and we will see how this goes.
    So, we are going to have this hearing today. Secretary, I 
appreciate your willingness to take this job, the hard work 
that you have put into this job, and I am sure there will be a 
number of questions about the budget you have submitted.
    [The statement follows:]
                Prepared Statement of Senator Roy Blunt
    Good morning. This is our first fiscal year 2020 budget hearing. 
Thank you, Secretary DeVos, for appearing before the Subcommittee today 
to discuss the Department of Education's fiscal year 2020 budget 
request and helping us kick off this year's appropriations process.
    Last year we passed a Labor/HHS bill prior to the start of the 
fiscal year for the first time in 22 years. The conference agreement 
received 93 votes on the Senate floor. A pattern begins in year two, 
and I hope this is the beginning of a trend that starts today.
    The fiscal year 2020 budget request for the Department of Education 
is $64 billion in discretionary funding, $7.4 billion, or 10 percent, 
less than fiscal year 2019.
    This request is similar to last year's request in many respects. 
Like last year, it eliminates or consolidates approximately 30 
programs, and significantly reduces funding for several others. All of 
the programs proposed for elimination or significant reductions were 
proposed last year too.
    I continue to appreciate the tough decisions this budget forces you 
to make, many the result of the caps in place from the Budget Control 
Act. The President's budget proposes to reduce non-defense 
discretionary by $55 billion or over 9 percent. The request for the 
Department of Education is roughly in line with those overall numbers.
    I agree that we should constantly evaluate programs and be willing 
to reduce or eliminate funding for programs that are ineffective and 
prioritize that funding elsewhere. We have made those difficult 
decisions in previous budgets and I know we have more we could do in 
that regard. However, as similar as this request is to previous ones, I 
expect the Committee will have much the same reaction as it did to 
those.
    This subcommittee will not pass an appropriations bill that 
eliminates large State formula grants that support afterschool 
programs, STEM education, school safety, and teacher professional 
development. We both agree, and I think the entire subcommittee does as 
well, that decisions affecting the education of children should be made 
as close to the student as possible--by parents, teachers, schools, and 
school districts. That's exactly what these programs do, many of which 
go directly to local school districts to be used for a range of 
activities to best meet the needs of local communities.
    Further, while some small, targeted grant programs may not have 
widespread impacts simply because of their size, they can be life-
changing for the students and families they touch and build the 
evidence-base for States and school districts to fund such activities. 
For example, I have seen Special Olympics athletes compete in Missouri 
and in the World Games. The limited funding this subcommittee provides 
for Special Olympics leverages private resources to help schools 
implement comprehensive policies to transform school climates and 
ensure that students with disabilities are fully welcomed and included 
in student-life. This funding has directly impacted the lives of 
thousands of students both with and without intellectual disabilities. 
It also provides a model for other schools and districts to support 
this kind of work without direct Federal funding.
    While the budget makes significant cuts to existing programs, the 
budget request does include some new initiatives. For example, there is 
a proposal for a new Adult Education Fast Track Apprenticeships for 
Low-Skilled Adults program. This subcommittee has strongly supported 
investments in apprenticeship programs through the Department of Labor 
over the past 4 years. I would like to hear more details on how this 
program would be aligned with and complement those programs.
    Further, I am also interested in how we can support States and 
schools in better preparing all students for college and careers. In 
communities across Missouri, I hear about the importance of providing 
students with the skills and opportunities to compete for the jobs of 
today and the future. When I was in St. Louis in February with the 
Secretary of Labor, we met with students taking part in a program run 
by the St. Louis Community College's Center for Workforce Innovation. 
This program offers students multiple career pathways, including pre-
apprenticeship in advanced manufacturing and pre-employment programs in 
aircraft assembly, allowing students to apply any credits earned toward 
a degree using Pell grants. I believe it is critical that students have 
the opportunity to enhance their education in ways that both help them 
earn industry-recognized credentials as well as supports their goal of 
receiving a post-secondary degree. I will continue to support programs 
that expand STEM education, high-quality career and technical 
education, and promotes college affordability and completion with the 
goal of getting students into good, well-paying jobs and careers.
    Madame Secretary, thank you again for being here today. I look 
forward to hearing your testimony and appreciate your dialogue with us 
about these and other important issues that impact students at every 
level in their academic careers.
    Thank you.

    Senator Blunt. And I would like to turn to Senator Murray 
for her opening remarks.

                   STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. Well thank you very much, Mr. Chairman. 
Over the past 2 years, you and I have been able to pass 
bipartisan spending bills that do invest in our children, our 
students, our workers, our patients, women, families. That was 
only possible because we did work together and found common 
ground and rejected the Administration's harmful budget 
requests, including proposals to gut funding for students, 
teachers, and public schools and requests for Secretary DeVos's 
privatization agenda.

                          GOVERNMENT SHUTDOWN

    I am very pleased we were able to work together and pass 
the most recent Appropriations bill from this Subcommittee 
before the start of the fiscal year. Unfortunately, as we all 
know, President Trump decided to hold half of our spending 
hostage and shut down the Government earlier this year, and 
that temper tantrum over a wall that Mexico was supposed to pay 
for actually cost our--our economy $3 billion, and it forced 
800,000 Federal workers to go without paychecks for over a 
month.
    In my home State of Washington, thousands of workers at 
SeaTac Airport and across the State were forced to work without 
pay, take out loans, forced to figure out how to make ends 
meet, all because of this manufactured crisis. So, I hope we 
can avoid that spectacle this year in this appropriations 
process and keep the Government funded.

                CRITICAL INVESTMENTS AND BUDGET PROCESS

    In addition to rejecting Trump's harmful budget proposals, 
we do have to reach a deal to lift the sequester caps and 
restore critical investments in defense and middle-class 
priorities. I was very proud to be able to reach a deal with 
then-Speaker Ryan in 2013, to do exactly that, lift the 
sequester caps and restore critical investments. And I am 
really glad we have been able to build on that deal since then.
    So, Secretary DeVos, with that in mind, I do want to 
discuss your budget proposal in front of us today. I always say 
a budget is a reflection of your values, and given that your 
budget request fails to invest in our youngest learners, our 
students in public schools, it fails to help students who are 
struggling to better themselves in higher education, and it 
fails the student loan borrowers who are saddled with debt--it 
sort of speaks volumes about where your priorities lay and who 
you are fighting for as the Secretary of Education.
    It is also telling that at the same time as you sit before 
us requesting these devastating cuts to public education, the 
President's budget proposal is still pushing for your 
privatization agenda, which neither the public wants, nor has 
Congress authorized.
    Now, I do want to dig into some of your requested cuts 
today because I believe it is important to fully understand 
your vision for the future of education in our country. Your 
budget requests cut more than $4 billion from afterschool 
programs and other needed investments in public school 
students, including completely eliminating Federal support for 
the program that supports our Nation's teachers and requesting 
no additional funding for low-income students, students with 
disabilities, at a time when many of our schools are struggling 
to meet the needs of those students.
    Additionally, I am disappointed that the budget zeros out 
funding for Special Olympics education programs. You said this 
is about tough choices, but you are also asking at the same 
time, for more money for charter schools when you are having 
trouble spending the increase Congress appropriated for that 
last year.
    So, this is not about tough choices, this is about you 
prioritizing your agenda over students with special needs.
    You have also, once again, failed to take any steps to make 
our schools and neighborhoods safer by addressing common sense 
gun safety measures or reducing the number of guns in our 
schools. This budget proposes cutting funding to colleges and 
universities too, that primarily enroll low-income students, 
students of color, including Minority-Serving Institutions, and 
it proposes to take more than $200 billion from the pockets of 
student loan borrowers by making them pay back more, making 
some pay back longer, and eliminating debt forgiveness for our 
public servants.
    These divisive proposals would not only harm students and 
families, but they are in stark contrast with the efforts that 
Chairman Alexander and I, along with our colleagues in the 
House, are making to find common ground today and reauthorize 
the Higher Education Act.

                             SEXUAL ASSAULT

    So, Secretary DeVos, I do have many questions about your 
budget proposals and other issues at the Department, but I do 
also want to take a minute to address the epidemic of sexual 
assault on our Nation's college campuses and your department's 
proposed Title IX rule.
    Over the past year I have spent a lot of time with brave 
women who shared their experiences with me of being sexually 
assaulted on a college campus. It was not easy for them to 
share their deeply painful, and traumatic story, but they did 
so because they wanted to help ensure it never happened to 
anybody else.
    I am very much in awe of these brave women, and men, who 
have publicly shared one of the worst moments of their life, 
and I am standing with them and will continue to fight the end 
of epidemic sexual assault on our Nation's college campuses.
    So, I was extremely disappointed and concerned when you 
proposed a Title IX rule that would weaken those protections 
for survivors and allow colleges to shirk their 
responsibilities to investigate claims of sexual assault and 
keep our students safe.
    I believe if your rule goes into effect, campus sexual 
assault will once again be swept under the rug, because 
students will not feel comfortable coming forward knowing their 
school is less likely to act when they have been assaulted.
    So, I genuinely hope that you take the time to read some of 
the 100,000 comments students and survivors have submitted on 
that rule. And I hope you listen to their stories, listen to 
these students, and start over on a rule that actually ensures 
schools are doing everything they can to keep students safe and 
gives students a fair process that does not force them to be 
re-traumatized after they have reported an assault.

                 DEPARTMENT RESPONSIVENESS TO CONGRESS

    And finally, I want to note how concerned I am about the 
Department's responsiveness to this Committee's direction. Your 
Department has slow-walked the hiring of staff at the Office 
for Civil Rights despite explicit direction from this 
Committee. You have ignored committee report language directing 
the Department to protect student loan borrowers from unfair, 
deceptive practices of student loan companies.
    The Department has dismissed a Committee directive for a 
new competition for an open textbook pilot program designed to 
help our college students better afford higher education, and 
you have ignored Committee directives to provide relief to 
student loan borrowers who were cheated and defrauded by 
predatory for-profit colleges, which now stands at 140,000 
claims and counting.
    What surprised me about this inaction is that during last 
year's hearing, Chairman Blunt reminded you of the importance 
of being responsive to our Committee. Additionally you have not 
responded to a number of requests for information from me about 
critical aspects of Department policy and administration, and I 
know several of Chairman Scott and Chair DeLauro's letters are 
also unanswered.
    It is unacceptable and unconstitutional to ignore 
Congress's oversight responsibilities and authority. So, I 
expect answers to those letters as quickly as possible. And I 
hope, in addition to answers to all of our questions today, we 
get a commitment from you to respond to those letters in a 
timely manner and be responsive to this Committee's direction.
    Thank you, Mr. Chairman.
    Senator Blunt. Thank you Senator Murray.
    Secretary, welcome again today, and we will look forward to 
your opening remarks.

                 SUMMARY STATEMENT OF HON. BETSY DEVOS

    Secretary DeVos. Thank you Chairman Blunt. Chairman Blunt, 
Ranking Member Murray, and members of the Subcommittee, thank 
you for the opportunity to testify on the President's fiscal 
year 2020 Budget.

                  LIMITS ON FEDERAL ROLE IN EDUCATION

    I thought it would be useful to begin by recalling 
Congress's commitment when it created the U.S. Department of 
Education 40 years ago. Then, Congress vowed that the move 
would ``not increase the authority of the Federal Government 
over education, or diminish the responsibility for education, 
which is reserved to the States.'' And, I will add, communities 
and parents. This budget reflects a commitment to that 
sentiment.
    It also recognizes who actually funds the government's 
budget--American taxpayers. And so, we propose Congress spend 
their money wisely, efficiently, and with restraint. The 
President's fiscal year 2020 Budget would reduce overall 
funding for Department programs by $7.1 billion, which is a 10 
percent decrease from 2019's appropriated level. The budget 
eliminates, streamlines, or reduces funding for many programs 
that are duplicative, are ineffective, or are nonprofit 
organizations already appropriately supported by States, 
communities, or private philanthropy.
    Our proposed reduction is similar to last year's request 
and the year before that, as well. I acknowledge that you 
rejected those recommendations. I also acknowledge that it is 
easier to keep spending, to keep saying yes, to keep saddling 
tomorrow's generations with today's growing debt. But as it has 
been said, the Government will run out of other people's money.
    Over the past 40 years, Federal taxpayer spending on 
education has increased about 180 percent, amounting to over 
$1.2 trillion cumulatively, and yet we are still 24th in 
reading, 25th in science, and 40th in math when compared to the 
rest of the world. Doing the same thing and more of it will not 
bring about new results.

            SCHOOL CHOICE AND EDUCATION FREEDOM SCHOLARSHIPS

    I propose a different approach--freedom. This budget 
focuses on freedom for teachers, freedom for parents, and 
freedom for all students. A great education should not be 
determined by where you live nor by who you know; it should not 
be determined by family income and education should not be old-
school, one-size-fits-all all approach. Every student is 
unique, and everyone learns differently. Every child should be 
free to learn where and how it works for them, where and how it 
unlocks their potential.
    That is why the President's 2020 Budget proposes a historic 
investment in America's students--Education Freedom 
Scholarships. Our bold proposal will offer a dollar-for-dollar 
Federal income tax credit for voluntary contributions to 501(3) 
nonprofit organizations that provide scholarships to school 
students, not school buildings. These students, their families, 
teachers, schools, States, all can choose to participate in the 
program, or they can elect not to participate; it is a choice.
    And since the proposal relies entirely on voluntary 
contributions to nonprofit organizations, it will not take a 
single dollar from local public school teachers, or public 
school students. Indeed, our budget maintains current levels of 
funding for Title I and IDEA (Individuals with Disabilities 
Education Act).
    And something else. Education Freedom Scholarships are not 
only for students who want to attend private school. In fact, 
some States may choose to design scholarships for public school 
options, such as apprenticeships or transportation to a 
different public school. States have the opportunity to be 
really imaginative and to serve the unique needs of their 
students.
    We do not have to look far to see that education freedom 
works. Thanks to a menu of options bolstered by the D.C. 
Opportunity Scholarship Program, embraced by teachers, parents, 
and students alike, more than half of students in the District 
attend schools other than their assigned one. And there is 
still significant unmet demand.

                        OTHER BUDGET PRIORITIES

    We propose that Congress double the D.C. program's funding 
to $30 million to meet those students' needs. This 
Administration believes students of all ages should be free to 
pursue multiple pathways to higher education and successful 
careers. That is why this budget proposes to expand the use of 
Pell Grants for quality, short-term programs. It also invests 
in career and technical education and streamlines student loan 
repayment. The latter is urgently necessary, because today, 
Federal Student Aid holds $1.5 trillion in outstanding loans; 
more than total auto debt, and credit card debt, and 43 percent 
of those student loans are either in default, more than 30 days 
delinquent, or are negatively amortized, and taxpayers are on 
the hook for it all.
    This budget consolidates numerous repayment plans and 
raises the cap on a borrower's monthly payment to 12.5 percent 
of discretionary income. This is one way the Federal Government 
can become a more responsible lender. Policy should not entice 
students into greater debt, nor should they put taxpayer 
dollars at greater risk.
    Education freedom is not just for parents and students--
teachers need greater freedom as well. We seek to empower 
America's teachers and elevate their profession via this budget 
with a new total investment of $370 million. I regularly meet 
with a number of excellent teachers who tell me they would like 
to choose their own professional development and customize it 
for their needs. To that end, the budget requests an increase 
of $170 million to focus on development that is controlled by 
teachers, not dictated by the district office. These teacher 
vouchers treat teachers as the professionals they are.
    Teachers also tell me about the value of mentors or 
residency opportunities. So, we are requesting $200 million to 
enable new teachers more opportunities to learn from the best.
    It is also essential that teachers and students be safe at 
school. In the wake of tragic acts of school violence in our 
country, President Trump asked me to lead a Federal Commission 
on School Safety. To support the Commission's recommendations, 
we request $200 million to help communities develop their own 
school emergency plans and to focus on counseling and healthy 
behaviors for their students.
    In the end, budgets are about priorities. Ours are 
students, parents, teachers, and taxpayers. If our country is 
to remain secure, strong, prosperous, and free we need students 
of all ages who are prepared to pursue successful careers and 
lead meaningful lives.
    Thank you for this opportunity to testify, and I look 
forward to your questions.
    [The statement follows:]
                 Prepared Statement of Hon. Betsy DeVos
    Mr. Chairman, Ranking Member Murray, and Members of the 
Subcommittee:
    Thank you for the opportunity to testify on the President's fiscal 
year 2020 Budget Request for the Department of Education.
    The Department's mission is to promote student achievement and 
preparation for global competitiveness by fostering educational 
excellence and ensuring equal access. We can best accomplish this when 
we come alongside teachers and parents in their efforts to help each 
student pursue the education that works for them.
    This Budget supports this Administration's commitment to expanding 
education freedom. It maintains funding for key formula grants and 
makes targeted investments of taxpayer dollars in education freedom for 
school leaders, for teachers, and for students and their families. The 
Budget would also expand the opportunity to use Pell Grants for high-
quality, short-term training, enhance workforce development and career 
and technical education, and streamline and improve student loan 
repayment.
    Elsewhere in the President's fiscal year 2020 budget, the 
Administration is proposing a Federal tax credit to encourage voluntary 
contributions, of up to a national cap of $5 billion each year, to 
provide scholarships to elementary and secondary students. I would like 
to make three key points about Education Freedom Scholarships that we 
hope will help the tax credit win broad support in Congress.
    First, it relies entirely on voluntary contributions to State-
identified, non-profit organizations that give scholarships to 
elementary and secondary students. So, the proposal does not divert a 
single penny from public school teachers or public school students. It 
is merely a mechanism to empower families to choose the best 
educational options for their children.
    Second, it is not a Federal program. States will control the design 
of their own programs. States will determine which students will be 
eligible, which educational providers can participate, how much 
scholarships should be, and every other detail.
    Finally, the proposal is not just for students who wish to attend 
private schools. States can decide to use scholarships to expand public 
school options--such as career and technical education (CTE), 
apprenticeships, dual enrollment programs, or transportation to out-of-
zone schools. We hope States will empower families to choose all 
options including private education, but I am also committed to letting 
States make their own decisions when it comes to their scholarship 
programs.
    The President's 2020 Budget also demonstrates fiscal discipline. 
When it comes to domestic discretionary education spending over the 
past couple of years, Congress has ignored the Administration's 
recommendations. In fact, Congress has increased the Department's 
discretionary spending by billions of dollars.
    Since President Trump took office, Congressional appropriations for 
U.S. Department of Education programs have increased dramatically--in 
spite of the Administration's call to slow spending. We are not doing 
our children any favors when we borrow from their future in order to 
invest in systems and policies that are not yielding better results. 
Overwhelming Federal debt may prove to be the single greatest barrier 
that future generations will face in trying to achieve the full 
potential of the American dream, and we cannot continue to kick that 
can down the road. For fiscal year 2017, Congress appropriated a total 
of $68.2 billion in discretionary funds. For fiscal year 2019, Congress 
appropriated $71.1 billion--an increase of 4.2 percent.
    American taxpayers cannot afford these sorts of increases. What's 
more, this Administration dispenses with the tired notion that more 
spending equals better results in education. For years, American 
taxpayers have been asked to send bigger portions of their paychecks to 
the Government, which promises more money will cure what ails 
education. But too many students are still left unprepared. So, the 
President's fiscal year 2020 Budget includes $64.0 billion in new 
discretionary budget authority, a reduction of $7.1 billion from the 
fiscal year 2019 appropriated level, or a 10 percent decrease.
    American taxpayers have other reasons to be concerned about 
education spending. Postsecondary education discretionary and mandatory 
funding would make available $131 billion in new taxpayer-financed 
student aid to postsecondary students this year, with $100 billion of 
that total in new student loans, adding to the almost $1.5 trillion in 
the Federal student loan portfolio. Federal Student Aid's loan 
portfolio is the largest consumer loan portfolio in America--larger 
than that of J.P. Morgan and Bank of America. And 43 percent of those 
student loans are in default, more than 30-days delinquent, or 
negatively amortized. Another 20 percent of loans are in forbearance or 
deferment. Only 24 percent of all loans are being reduced by at least 
one dollar in principal, which means the rest of them are growing in 
size rather than shrinking, even if borrowers are meeting the terms of 
their repayment plan and all legal obligations. American students need 
to understand that they are digging themselves into a deep financial 
hole and taxpayers deserve fiscal restraint because they are the ones 
that could ultimately be left holding the bag. That is why the Budget 
proposes crucial student loan reforms which I will discuss in more 
detail below.
                   elementary and secondary education
    In the area of elementary and secondary education, the Budget 
request reflects our continued commitment to providing States and those 
closest to students with the resources and flexibility to ensure that 
students facing the greatest challenges can pursue a great education. 
In particular, we have protected funding for the key formula grant 
programs that support America's most vulnerable children. To supplement 
State and local efforts to support nearly 25 million low- income 
children, the Budget proposes $15.9 billion for the Title I program--
the same level as the fiscal year 2019 appropriation. And to help 
support local efforts to serve nearly 7 million students with 
disabilities, the Budget proposes $13.2 billion for Grants to States 
under IDEA. That's the same level as the fiscal year 2019 
appropriation.
    This Budget builds on our efforts to give families more freedom, so 
that families can find the best educational setting for their children. 
It contains more than $650 million to support public school choice, 
including $500 million for opening and expanding high-quality, public 
charter schools and for helping finance charter school facilities; $107 
million for public magnet schools; and $50 million for districts that 
participate in a student-centered funding pilot that will help 
districts transition to transparent funding systems where school 
funding is based on student needs and money follows children to their 
schools.
    The Budget also includes new investments to empower teachers and 
elevate the teaching profession. Specifically, we are proposing a $200 
million demonstration project under the Education Innovation and 
Research program that would provide individual professional- 
development stipends, or teacher vouchers. These would replace 
district-driven, one-size-fits-all professional development activities 
with those that empower teachers to select training opportunities 
tailored to their individual needs and those of the students they are 
serving. In several conversations and roundtables I've recently hosted, 
teachers consistently criticize the quality of the professional 
development programs they are forced to attend. These stipends will 
free teachers to study and learn what they know will most benefit 
themselves and their students--not what's dictated to them from the 
district office.
    The request also includes $200 million for the Teacher and School 
Leader (TSL) Incentive grant program to support a new competition 
focused primarily on the expansion of quality teacher mentoring and 
residency programs. Many of the classroom teachers I've met have spoken 
with great passion about the important role that high-quality mentors 
and residencies have played in helping them improve their knowledge and 
skill and become excellent instructors. Those who weren't so lucky 
describe how ill prepared they were for the classroom. We want to test 
whether good mentors and residency programs can cost-effectively 
improve both teacher induction and retention while creating compensated 
leadership opportunities for teacher mentors so that they choose to 
stay in the classroom, where their talents are most needed. The 
proposed fiscal year 2020 TSL competition also would test the impact of 
increased compensation on recruitment and retention of effective 
educators in high-need subjects such as STEM and computer science.
    This Administration is committed to ensuring that students are able 
to learn in safe and secure educational environments. The Budget 
includes approximately $700 million, an increase of nearly $200 million 
compared to 2019 appropriation levels, for grant programs in the 
Departments of Education, Justice, and Health and Human Services, to 
give States and school districts resources they need should they choose 
to implement the recommendations of the Federal Commission on School 
Safety, which I co-chaired. At the Department of Education, we are 
proposing a $100 million School Safety State Grant program that would 
help build State and local capacity to identify and address the wide 
range of school safety and student health concerns authorized under 
Title IV-A of the Elementary and Secondary Education Act (ESEA). Our 
request also would maintain support for other school safety programs 
such as School Climate Transformation Grants, Project Prevent Grants, 
and Mental Health Demonstration Grants.
    To protect formula grants and to target our investments on key 
priorities, the Administration reduced or eliminated funding for 
several programs. We recognize that taxpayer funds aren't unlimited, 
and that means making some tough but necessary choices. We know that 
every program has a constituency that is impassioned about its 
importance, but as American families well understand, in order to stick 
with the budget, tough choices must be made and even beloved traditions 
must be abandoned in order to remain solvent.
    First, the Budget does not include funding for the Supporting 
Effective Instruction State Grants authorized in Title II-A of the 
ESEA, saving $2.1 billion compared to the fiscal year 2019 
appropriation. States and local districts have primarily used these 
funds for teacher professional development and class-size reduction. 
The Administration believes such activities are better funded through 
State and local resources, and they could be funded through other 
Federal grants, including Title I of the ESEA. There is no evidence 
that the Federal taxpayer investments in existing professional 
development programs or class-size reduction have meaningfully improved 
student outcomes. In fact, students may be better served by being in 
larger classes, if by hiring fewer teachers, a district or State can 
better compensate those who have demonstrated high ability and 
outstanding results.
    Second, the Budget does not include funding for Title IV-A's 
Student Support and Academic Enrichment Grants, saving $1.2 billion 
compared to the fiscal year 2019 appropriation. These flexible funds 
are typically used by States and districts to enrich student academic 
programs, improve school environments, and deploy education technology. 
Title IV-A is neither well-structured nor sufficiently targeted, 
leading to most districts receiving less than $30,000, too little money 
to have an impact. Title IV-A activities should be, and largely are, 
funded through State and local resources, as well as other Federal 
programs, including Title I grants.
    Third, the Budget does not include funding for 21st Century 
Community Learning Centers, saving $1.2 billion compared to the fiscal 
year 2019 appropriation. Although before- and after-school programs can 
improve student outcomes, 21st Century Community Learning Center 
programs do not generate consistent student attendance or yield 
consistently improved academic outcomes. The Administration believes it 
would be more effective to have local, State, and private resources 
support activities that are designed to meet the unique needs of each 
community, as well as the needs of its students and parents.
              career pathways and postsecondary education
    The fiscal year 2020 Budget supports students in continuing their 
lifelong learning journeys by investing in career and technical 
education, promoting multiple pathways to successful careers, and 
streamlining and improving Federal student aid programs. The Budget 
also continues support for Federal programs that help prepare low-
income and minority students for postsecondary education and strengthen 
postsecondary institutions serving large proportions of minority 
students. These proposals support recent congressional efforts to 
modernize and reauthorize the Higher Education Act to be responsive to 
the needs of both students and employers.
    The Budget includes $1.3 billion for Career and Technical Education 
State grants, which help ensure that students have access to CTE 
opportunities in high school as well as a wide array of postsecondary 
options including certificate programs, applied associate degree 
programs, and apprenticeships. The Budget also includes $20 million for 
CTE National activities to help students enter careers in STEM and 
information technology-related programs, such as advanced 
manufacturing, biotechnology, engineering technology, allied health, 
and mechanics. Additionally, the Budget proposes to double the American 
Competitiveness and Workforce Improvement Act fee for the H-1B program 
and direct 15 percent of the revenues to the CTE State Grants. The 
Budget includes $60 million under Adult Education National Leadership 
Activities to support State efforts to create pre-apprenticeship 
programs that increase the number of adults who are able to meet the 
basic entrance requirements of apprenticeship programs. We have heard 
from too many employers that they want to provide apprenticeship 
opportunities, but cannot find interested participants who have the 
underlying math, science, and reading skills they need to succeed.
    There are many paths to successful careers, and Federal student aid 
programs should be flexible enough to support students on the path of 
their choice. The Budget would expand Pell Grant eligibility to include 
high-quality short-term programs, helping more Americans access 
education programs that can prepare them for well-paying jobs in high-
demand fields more quickly than traditional degree programs. We should 
give students access to a credential that saves them money and gets 
them into the workforce more quickly, so they can enjoy the many 
rewards associated with performing meaningful work and making a valued 
contribution.
    The 2020 Budget would also reform campus-based aid programs by 
focusing limited resources on bolstering effective workforce 
development opportunities for students with the most need. The Budget 
proposes to reform the Federal Work-Study program to support workforce 
and career-oriented education opportunities for low-income 
undergraduate students, rather than subsidizing on-campus employment, 
so that low-income students are engaged in work experiences while in 
school that will lead to higher-paying jobs when they graduate. Our 
proposal also ends the system that diverts the largest portion of 
campus-based aid to the institutions that need it least and serve the 
fewest high-risk, high-need students. Our proposal would focus scarce 
funds on institutions enrolling high numbers of Pell Grant recipients, 
rather than their historical participation in the program. We can no 
longer tolerate a system that allows advantaged students to enjoy the 
prized summer internships while low-income students are limited to 
retail, grounds keeping, office, or food service jobs on campus that 
likely won't improve their longer term employability.
    The 2020 Budget would also save $840 million in fiscal year 2020 by 
eliminating the Federal Supplemental Education Opportunity Grant (SEOG) 
program, which currently allows institutions to provide grant aid to 
students that do not always have the greatest need for assistance and 
that provides disproportionate benefits to students already advantaged 
by attending more selective institutions.
    Importantly, the Budget proposes to improve student loan repayment 
by consolidating multiple Income-Driven Repayment (IDR) plans into a 
single plan. The numerous IDR options currently offered to borrowers 
overly complicate choosing and enrolling in the right repayment plan, 
and provide disproportionate benefit to students who complete expensive 
graduate education, but are more likely to enjoy higher earning 
potential over their lifetime. The proposed single IDR plan would cap a 
borrower's monthly payment at 12.5 percent of discretionary income. For 
undergraduate borrowers, any balance remaining after 15 years of 
repayment would be forgiven. For borrowers with graduate debt, any 
balance remaining after 30 years of repayment would be forgiven. The 
Budget also proposes auto-enrollment for severely delinquent borrowers 
and institutes a process for borrowers to consent to share income data 
for multiple years to reduce the burden on an individual borrower to 
submit forms and proof of earnings. To facilitate these improvements 
and to reduce improper payments, the Budget proposes to streamline the 
Department's ability to verify applicants' income data held by the 
Internal Revenue Service. This improvement would also make it easier 
for students to complete their FAFSA application and would reduce the 
added burden to institutions when they are asked to provide additional 
verification of student eligibility.
    To further simplify the student loan program and take the 
Government out of picking winners and losers among students who may 
have the same debt and earn the same salary-- simply because their 
employers have a different tax status or their parents had different 
earnings--the fiscal year 2020 Budget proposes eliminating Public 
Service Loan Forgiveness (PSLF) and Subsidized Stafford Loans for new 
borrowers. The PSLF program is not only complicated for borrowers to 
navigate, partly because of how the program was designed when it began 
in 2007, but it also uses Government resources to encourage students to 
take jobs based on the tax-status of their employer, rather than on a 
student's unique talents or local workforce needs.
    The Budget also discontinues the subsidized loan program, as it 
provides an after-the-fact benefit that doesn't help students complete 
their programs and does not take into account borrower earnings in 
their chosen professions. It sends the wrong message to suggest to 
students that just because their parents were low-income, they will be 
too. The President's Budget proposes to support all borrowers pursuing 
any career by streamlining multiple IDR plans into a single IDR plan 
which will allow borrowers to make affordable monthly payments based on 
their income.
    In order to effectively implement the student aid programs, we are 
pursuing an innovative strategy to deliver Federal student aid services 
and information to our customers, and the Budget includes strong 
support for this initiative. Next Gen FSA, will create an improved, 
world-class customer experience for FSA's millions of customers, while 
creating a more agile, flexible model that will streamline FSA's 
existing operations. The key to the Next Gen FSA transformation will be 
a comprehensive, FSA-branded customer engagement layer that will create 
an environment where the Department's customers will receive clear, 
consistent information and readily accessible self-service options at 
every stage of the student aid lifecycle, something I think we can all 
agree is worth supporting.
    The Budget proposes to restructure and streamline college 
preparation programs by transitioning a number of the Federal TRIO 
Programs into a $950 million State formula grant program and 
eliminating GEAR UP, which currently supports activities that could be 
supported under the proposed TRIO State formula grant program. These 
grants would support evidence- based postsecondary preparation programs 
designed to help low-income students progress through the pipeline from 
middle school through postsecondary education, and give more 
flexibility to States to design activities that meet the unique needs 
of their students. It also reduces wasteful spending by institutions on 
writing elaborate proposals and by the Department on hosting large 
proposal review panels--money that would be better spent on students 
than review panels.
    The Budget also supports important investments in improving the 
academic quality, institutional management and capacity, infrastructure 
and student support services of Minority Serving Institutions (MSIs) 
and Historically Black Colleges and Universities (HBCUs). Specifically, 
the Budget proposes to create efficiencies and reduce the cost of 
applying for grants by consolidating six MSI programs into a $148 
million formula grant program, which will provide funds the 
institutions can rely on for longer-term investments and to implement 
best practices proven effective by others. In recognition of the 
extraordinary historic contribution provided by HBCUs, the Budget 
includes $626 million for programs that provide funding to help these 
institutions strengthen their capacity to provide the highest quality 
education.
    Finally, the Budget eliminates funding for many discretionary 
programs that do not address national needs, duplicate other programs, 
are ineffective, or are more appropriately supported with State, local, 
or private funds--saving the taxpayer $6.7 billion.
    The Budget reflects our commitment to spending taxpayer dollars 
wisely and efficiently while supporting our Nation's students of all 
ages. Because that's who budgets are for--students. If this country is 
to remain secure, strong, prosperous, and free, we need students who 
are prepared to pursue successful careers and lead meaningful lives. 
The Government must resist the urge to pick winners and losers among 
students, institutions, and occupations. Instead, we must encourage and 
enable every student to be their best self and live their best life.
    Thank you for this opportunity to testify. I will be happy to 
respond to any questions you may have.

    Senator Blunt. Well, thank you Secretary.

                           WORKFORCE TRAINING

    Let's talk a little about workforce training first. Clearly 
this is in most places around the country, a very highly 
employed workforce, in terms of percentage of Americans 
employed. I think in our State--my State of Missouri, the 
number is 3.2 percent. The mayor of Springfield, my hometown, 
was in the other day, and he said the number is 2 percent 
unemployed. People are at work and more and more of the recent 
trips I am taking home people are talking about the people they 
have gone ahead and hired, but who really are not ready yet for 
the jobs they already have and they are--a new term I had not 
heard before used two or three times, was incumbent training. 
You know, training the workforce they already have.
    Constantly the idea comes up of what we can do to give 
people more information and better choices earlier. All of our 
funding programs have very much focused on traditional higher 
education, 2-year, 4-year college degrees.
    What can we do to make it more possible for people to get 
into 15-week certifiable programs? Is there some way we could 
restructure the Pell Grant so that some of them could be used 
for certification programs, and if we did that, who would be 
the more logical gatekeeper in that kind of world?
    Secretary DeVos. Senator, great, great questions and this 
is an issue for all of us to grapple with and to find ways to 
help individuals to really move on to their next opportunities. 
We know that there are over 7 million jobs going unfilled 
today, and one of the proposals the budget makes is around 
short-term Pell Grants to allow for high-quality certification, 
or certificate programs to access, and that is part of the 
proposal.
    Another part, I think, is really wrapped into this notion 
of education freedom that we believe should expand from the 
youngest of ages through lifelong learning. And the proposal we 
have to create a Federal tax credit that States could then opt 
to take and use within their State to create programs to meet 
their own unique needs, could allow for expansion of 
apprenticeship programs in high school--starting in high 
school, expansion of dual enrollment programs.
    I happen to agree with you that students need to learn much 
earlier on what some of their options are and their 
opportunities for advancement, and so these are just a couple 
of the ways that States could address these things with a new 
and creative approach.

                            APPRENTICESHIPS

    Senator Blunt. Secretary Acosta and I went to the 
Carpenter's Union training facility in St. Louis earlier this 
year, and they were talking about the lost decade that most 
people in that program have. That 10 years after someone gets 
out of high school, when they are sort of searching for 
something to do, and usually do that in very low skill, low-
compensated jobs, and then back in a program.
    Another thing, by the way, we learned at that program that 
we have been working on in our State is, what does it take to 
walk at the same time with the trade union certificate and an 
associate degree. And the answer at this program was 15 hours, 
and all of our potential journeyman know that from day one, 
what those 15 hours need to look like, and how, over the 2 or 3 
years of this program while they are working, they can get it.
    The other kinds of apprenticeship programs that are not 
necessarily the trade union programs, how do we certify whether 
they qualify for a 15-week certificate or the access to Pell 
Grants that you mentioned in this report?
    Secretary DeVos. Well, I think these are very important 
questions and we would look forward to working with Congress to 
put the appropriate guardrails around such a program and 
suggest that this is a really important time for employers for 
business and industry to be working closely with educators to 
help create those programs.
    The Swiss model actually has a lot to be learned and gained 
from, and I would recommend that we look more closely at how 
they approach apprenticeships. Three quarters, almost three 
quarters of high school students are in an earn-and-learn 
situation and in a wide variety of paths, of avenues. I think 
those are great opportunities for us to really look at and 
embrace but would look forward to working with you.

                     EDUCATION FREEDOM SCHOLARSHIPS

    Senator Blunt. All right, very good.
    Let me ask one more question. You have mentioned, now 
again, about the Education Freedom Scholarships. You are not 
asking for anything in this appropriation for that. That is 
purely Finance Committee jurisdiction.
    Secretary DeVos. It is part of the Department of Treasury's 
budget.
    Senator Blunt. Not that our members should not have 
questions about it, but there is nothing we are asking for 
here.
    Secretary DeVos. It does not create a new program, just 
creates a new opportunity.
    Senator Blunt. And the funding would come through a Finance 
Committee decision.
    Secretary DeVos. Yes.
    Senator Blunt. All right, thank you.
    Senator Murray.

                FOR PROFIT COLLEGES AND BORROWER DEFENSE

    Senator Murray. Secretary DeVos, since you assumed office, 
Federal student loan borrowers who have been cheated by their 
colleges, and overwhelmingly by predatory for-profit colleges, 
have been blocked from getting the relief that they do deserve. 
You tried to reduce the amount of debt relief students can 
receive and you unsuccessfully tried to block new rules put in 
place by the Obama administration to streamline the borrower 
defense process and put in additional protections for our 
students. And according to the information that you provided to 
this Committee, roughly, 140,000 borrower defense claims are 
pending review by your Department, and this number seems to 
increase by hundreds every day.
    When was the last time the Department approved a borrower 
defense claim?
    Secretary DeVos. Senator, thanks for your question, but 
before--I will be happy to answer that, but before I do, I just 
want to address one thing that you said in your opening 
statement, because I want to ensure--you attacked and 
questioned my personal motives, and my priorities, and I just 
want to be clear where my heart is. My heart is with all 
students and for their futures. I want every single student to 
have opportunity.
    Senator Murray. I appreciate that. I only have three and a 
half minutes left so, if you could answer my question--
    Secretary DeVos. I understand. I wanted to address that 
because----
    Senator Murray. I appreciate that. Can you answer the 
question? When was the last time the Department approved a 
borrower defense claim?
    Secretary DeVos. The Department is reviewing and approving 
the ones for closed loan discharge regularly. As you know, the 
borrower defense rule, the judge has requested that be put into 
effect. We are in the process of doing so.
    Senator Murray. So, has any----
    Secretary DeVos. But, let me just remind you that when I 
came into office, we were greeted with tens of thousands of 
claims for borrower defense, and we did not agree with the 
Obama administration's approach to this. That is why----
    Senator Murray. I understand that, but a court order has 
now told you to--my question is simple. Has the Department 
approved even one borrower defense claim since that court 
order?
    Secretary DeVos. I believe so. We are reviewing them 
regularly and----
    Senator Murray. How many?
    Secretary DeVos. I do not have the specific number, I would 
be----
    Senator Murray. Does any of your staff know how many?
    Secretary DeVos. I would be happy if you would like to 
submit a question for the record, I will be happy to get back.
    Senator Murray. No. I would like to know if any of your 
staff members behind you have an idea of when that--how many 
have been approved?
    Oh, okay apparently not. There is nothing stopping you from 
providing full relief to struggling borrowers today. Surely, 
there must be some of those borrowers who you feel deserve a 
full discharge, and I do not understand why the Department 
cannot fully discharge the loan today for tens of thousands who 
were defrauded years ago by Corinthian Colleges, including more 
than 2,000 from my home State are waiting.
    Secretary DeVos. The Corinthian College students' claims 
are being processed and dealt with forthwith and will continue 
to be. And we are continuing to review the appropriate steps 
based on the judge's request that this 2016 regulation be 
implemented, while at the same time we are continuing to work 
on revising the regulation.
    Senator Murray. That was 6 months ago, and those students 
are still waiting--that the court ordered this to move forward. 
So, these students are waiting, and I want to know, if you can 
get back to me, how many have been approved, because it appears 
to me that we have not moved forward at all on this and that is 
not fair to those students or their families or their future.
    Secretary DeVos. I will be happy to do so.

                    OFFICE OF THE INSPECTOR GENERAL

    Senator Murray. Let me move on. Earlier this year your 
Department attempted to replace the Acting Inspector General 
with a department employee after your Deputy Secretary 
inappropriately, and perhaps illegally, requested that the OIG 
(Office of Inspector General) ``Reconsider any plan that it 
might have to review the department's 2018 decision and 2018 
recommendation,'' to re-recognize the Accrediting Council for 
Independent Colleges and Schools.
    This so-called accrediting agency looked the other way 
while students were being cheated and being defrauded by 
predatory for-profit colleges, including that now defunct 
Corinthian College, ITT Technical Institutes, and Education 
Corporation of American Colleges.
    A number of my colleagues in the House and the Senate have 
asked for information multiple times to understand what exactly 
happened, and the response that we have received so far from 
the Department has really been inadequate.
    Will you commit to us to provide substantive answers to our 
questions on this?
    Secretary DeVos. Senator, I will be happy to if you can 
clarify what exactly you are asking. Are you asking regarding 
the IG or ACICS (Accrediting Council for Independent Colleges 
and Schools)?
    Senator Murray. Well, I--we have been very clear on both, 
and we have that written in to you. We got back a very 
inadequate response, mostly blanked out, and we deserve to have 
an answer on this.
    And Mr. Chairman, this whole episode really leaves me 
concerned about the independence and objectivity of the 
Department of Education's Acting Inspector General. I think we 
have to act to really establish the same kind of protections 
for this department's OIG that several other subcommittees have 
done, to provide their inspector generals the ability to be 
independent and objective, and I would like to work with you on 
that.
    Senator Blunt. I am glad to work with you further on that 
and thank you for----
    Secretary DeVos. Mr. Chairman, could I just respond to the 
IG issue just a moment, before you move on?
    Senator Blunt. Yes.
    Secretary DeVos. I want to clarify the fact that when our 
Inspector General retired, a process was put into place to name 
an Acting Inspector General, Phil Rosenfelt, a 48-year employee 
of the Education Department, who is--his integrity and 
capabilities are unassailable and impeccable. That process was 
begun in October. When the Acting was named, it was later 
changed, and the Acting that assumed the role after Kathy 
retired was put back into place, and we considered the matter 
closed, but to suggest that anything nefarious was unfolding 
there is absolutely wrong, and I want to go very clearly on the 
record.
    Senator Murray. If you would--well, put that all in writing 
to us because you did not do that. But I will say that you 
completely left out the part here, where the Deputy Secretary 
inappropriately and again, perhaps illegally, requested that 
they reconsider a plan that they have to do because of their 
independence.
    I think there are numerous questions about this, if you 
will respond to us as we requested, in writing, fully, then we 
can have a conversation about whether it was appropriate or 
not.
    I, meanwhile, again Mr. Chairman, think it is important for 
us to preserve the integrity and independence of an inspector 
general at this department, as other departments have.
    Senator Blunt. Seems reasonable that we could get that 
response within the same time of the window for the other 
questions that will come in writing, and we will consider that 
a question for the record, and I will be glad to follow up with 
you on this.
    Senator Alexander.

                         COLLEGE ACCOUNTABILITY

    Senator Alexander. Thank you Mr. Chairman. Welcome Madam 
Secretary.
    Mr. Chairman, I want to go back to your earlier comments, 
and it is not a subject for education, but it is an important 
subject for the Subcommittee.
    I want to thank you and Senator Murray, Senator Durbin, 
other members of the Subcommittee for your leadership in 
setting priorities over the last 4 years on the National 
Institutes of Health. It is--you have made significant 
increases in medical lifesaving research and you have done that 
the hard way by setting priorities. That is real legislative 
leadership, and I thank you both for that.
    Second, I agree with you about needing a number. I think 
both Democrats and Republicans would like for us to have a 
number to which we could begin to measure our appropriations, 
and the sooner the better. And, I hope that will happen.
    Madam Secretary, I want to just mention a couple of things 
before I ask you a question. One, I appreciated the President's 
Executive Order about colleges having skin in the game when it 
comes to loaning money to students to go to college.
    Senator Murray and I, as she said, are working together to 
try to reauthorize the Higher Education Act. We hope to do 
that, in the next few months have something before our 
Committee, and accountability and colleges having more 
participation and a, sort of skin in the game, is an important 
part of that discussion, and the Administration's position, in 
my view, is helpful.

                FREE APPLICATION FOR FEDERAL STUDENT AID

    Secondly, I want to thank you for putting the FAFSA (Free 
Application for Federal Student Aid) on a mobile device. Twenty 
million families fill out the Federal application form for Pell 
Grants and student loans every year, it is 108 questions long. 
Again, Senator Murray and I are working to simplify that. We 
cosponsored legislation up to take 22 questions off the FAFSA 
and keep families from having to give the same information 
twice to the Government by allowing them to just one-click-
import from the Treasury Department the information they have 
already given to the application for student aid. You have 
supported that, and you have made it easier for students to 
fill this out. I watched the students in Sevier County, 
Tennessee work through even the 108 questions, a lot more 
rapidly than I would have thought. So, that is a big help.

                            CHARTER SCHOOLS

    The other thing I wanted to say, is I want to commend you 
for your support for charter schools, and I keep wondering what 
the opposition to charter schools is when--they were invented 
by the Democratic Farmer Labor Party in Minnesota, 12 of them, 
in the early 90s. They have grown to 7,000, their goal is to 
give--they are all public schools. The goal is to give teachers 
more freedom and children more freedom. They have been 
supported by every Education Secretary we have had since then 
and by every President, including President Obama, President 
Clinton, and the last Democratic Secretary of Education was an 
operator of charter schools.
    So, I admire your support for charter schools. If you have 
got some extra money in one account, I would like for it to be 
put in another account so we can encourage giving teachers more 
freedom and students more choices of public schools.

               TEACHER PROFESSIONAL DEVELOPMENT VOUCHERS

    Now here is one thing you have that is new, and I just have 
a minute and a half left, but I am intrigued by your idea of 
giving stipends to teachers. I always thought--I know Secretary 
Duncan, President Obama's Secretary expressed this thought, 
Senator Harkin said the same thing, that the Title II funding 
was probably the worst spent money in the education, Federal 
education program. It is supposed to be for professional 
development, but it is split up between reducing class size by 
most States and check-the-box programs that most teachers do 
not find useful.
    Your proposal, as I understand it, is to begin a 
demonstration project to give teachers, actually stipends, so 
they could spend it at programs that they choose. I think back 
of the Governors School for Teachers of Writing that we had at 
the University of Tennessee when I was governor. Teachers loved 
it. They went for 2 weeks, learned about writing, went back 
reinvigorated to their schools. It only cost a few hundred 
dollars each. Purdue University offers STEM (Science, 
Technology, Engineering & Mathematics) programs, there are many 
programs across the country that could be accredited.
    What is your thinking about stipends for teachers to use 
their development money to choose their own professional 
development?
    Secretary DeVos. Thanks Senator for that question. It is 
part of our budget proposal to really empower teachers directly 
to advance their own careers, to develop themselves through a 
teacher voucher. The concept is such that teachers would--we 
would have a pilot program and demonstrate through the program 
the effectiveness of giving teachers the empowerment over 
development dollars for them.
    So, early-stage career teachers may choose one type of 
training, a mid-career teacher may choose something around 
developing their own subject area or matter further, and then 
later stage career teachers may be involved with learning how 
to become mentors and guides for the newer teachers. A very 
wide range of opportunities and possibilities, and the thought 
is to have a pilot-targeted program to test this out, but with 
meaningful funds behind it to give teachers the opportunity to 
make some meaningful decisions for their own development.
    Senator Alexander. Thank you very much, Madam Secretary. I 
think if we called it a stipend instead of a voucher, you would 
have fewer heart attacks on the other side of the aisle.
    Thank you, Mr. Chairman.
    Senator Blunt. Thank you, Senator Alexander.
    Senator Durbin.

                            SPECIAL OLYMPICS

    Senator Durbin. Thank you very much, Mr. Chairman.
    Madam Secretary, there has been some press reports about 
your testimony yesterday related to the Special Olympics and I 
hope we can get that clarified here. Did you personally approve 
the elimination of the $18 million from your budget to help the 
Special Olympics?
    Secretary DeVos. Senator as you know, the budget process 
within the Administration is a collaborative one, and it has 
been my responsibility to present the budget here on behalf of 
the Administration, the President's Budget. As I said then, and 
I will say again, this--we had to make tough choices and 
decisions around the budget priorities, and we elected to hold 
harmless Title I and IDEA funding and funding for English 
language learners, knowing that that is going to really reach 
the greatest number of students. And let me just be very 
clear----
    Senator Durbin. Can I ask you, did you personally approve 
this--just, I think a yes or no will do, the $18 million cut of 
the funding for Special Olympics?
    Secretary DeVos. No, I did not personally get involved in 
that.
    Senator Durbin. Well, I want to tell you, whoever came up 
with that idea at OMB gets a Special Olympic gold medal for 
insensitivity to think that we cannot spend $18 million to 
support this dramatically successful venture, which 
incidentally started in Chicago, Illinois, and now reaches 
countries all across the world, millions of young people with 
disabilities.
    Let me tell you an area where I think you can save some 
money for Special Olympics and other worthy causes. We know 
that 9 percent of post-secondary students go to for-profit 
colleges and universities. Do you know what percentage of 
student loan defaults, total student loan defaults in the 
United States, involves students from for-profit colleges and 
universities?
    Secretary DeVos. Senator, let me just comment on Special 
Olympics, and you know I love Special Olympics myself. I have 
given a portion of my salary to Special Olympics. I hope all of 
this debate encourages lots of private contributions to Special 
Olympics. So, let's not use disabled children in a twisted way 
for your political narrative. It is--that is just disgusting, 
and it is shameful, and I think you should be----
    Senator Durbin. Well Madam Secretary, let me tell you what, 
eliminating $18 million out of an $80--$70 or $80 billion 
budget, I think is shameful too. I am not twisting it. I asked 
you to answer yes or no, and you said that you did not 
personally approve this.
    Secretary DeVos. It is not a yes or no answer.
    Senator Durbin. Well, it certainly is as far as I am 
concerned. Someone has to accept responsibility for a bad 
decision.

                FOR PROFIT COLLEGES AND BORROWER DEFENSE

    Back to the for-profit schools. Do you know what percentage 
of the student loan defaults in the United States are students 
from for-profit schools?
    Secretary DeVos. 34 percent.
    Senator Durbin. 34 percent. Nine percent of the students 
coming out of post-secondary schools go to for-profit schools, 
but 34 percent of all student loan defaults are the students 
from these schools. They are being asked to pay too much for 
worthless training and education. They drop out heavily in debt 
with nothing to show for it, or end up completing the course, 
and again, cannot find a job to pay off their loans.
    So, let me ask you again, as Senator Murray has, do you not 
have a heart when it comes to 140,000 of these victim students 
who are trying, through the borrower defense rule, to get 
relief from the fraud that was perpetrated on them by these 
schools? Why is it taking so long for your department to give 
these students a break?
    Secretary DeVos. Senator, no student should be defrauded, 
and if fraud is involved there are consequences and there will 
be consequences, but we should not be judging institutions by 
their tax status. And let's be very honest here, there are bad 
actors on both sides of the equation. Bad actors should not----
    Senator Durbin. I beg your pardon, but 34 percent of the 
student loan defaults come from this one branch of tax status 
for-profit colleges and universities.
    Secretary DeVos. And we should not be judging by tax 
status, but by results, results for students. Let's talk about 
the ones that are doing a great job for students, such as 
Monroe College in New York, Strayer and----
    Senator Durbin. What are the results if 34 percent are 
defaulting, 6,000 students, and 6,000 students at Monroe. I 
read the Wall----
    Secretary DeVos. Let's also talk about the nonprofits that 
are doing a bad job.
    Senator Durbin. They should be held accountable, as well.
    Secretary DeVos. That are subject to bribes that are 
changing--that are lying in order to improve their U.S. News & 
World Report statistics.
    Senator Durbin. Monroe College has 6,000 students. There 
are 140,000 victim students waiting for your Department to give 
them relief so they can get on with their lives. You have a 
court order now saying do not delay it, and Senator Murray has 
said, why are you waiting? Why do you not help these students? 
They need some help right now from this borrower defense rule.

                            TEACHER SHORTAGE

    Let me ask you one last question. Do you know the teacher 
shortage across this country and the damage it is causing in 
school districts?
    Secretary DeVos. I know that teachers need to be honored, 
and respected, and elevated and----
    Senator Durbin. Are you aware of the shortage?
    Secretary DeVos. And that is why our proposal does just 
that.
    Senator Durbin. I hope you are aware of the shortage.
    Secretary DeVos. Gives them opportunities to advance their 
career and gives them opportunities to develop themselves.
    Senator Durbin. I will just tell you that there is a 
shortage. I have seen it in my own State last week in Decatur, 
Illinois and Zion, Illinois. I asked the principals, what is 
the problem, and they said, ``We cannot pay them enough money 
to keep them, and they are burdened with student debt.''

                    PUBLIC SERVICE LOAN FORGIVENESS

    Your unwillingness in your department to deal with the 
Public Service Loan Forgiveness Program is destroying an 
incentive. And now you want to eliminate the program. That is a 
program and incentive for those to go on and become teachers 
with the prospect that after 10 years their student loans will 
be forgiven. You would not help these students, you have not 
approved any of their applications, and now you want to 
eliminate that program. How did that help us?
    Secretary DeVos. Sir, every single student that has 
qualified for that program is being dealt with accordingly.
    Senator Durbin. How many would that be?
    Secretary DeVos. Remember it is a 10-year program.
    Senator Durbin. How many would that be?
    Secretary DeVos. The students that have applied have not 
yet qualified. We are----
    Senator Durbin. How about those who have applied? How many 
have been approved?
    Secretary Devos. We are very much honoring the--both the 
spirit and the requirements of that program and continue----
    Senator Durbin. And now you want to eliminate the program.
    Senator Blunt. Thank you, Senator Durbin.
    Senator Lankford.

                     EDUCATION FREEDOM SCHOLARSHIPS

    Senator Lankford. Thank you, Mr. Chairman.
    Madam Secretary, thanks for being here. Thanks for the 
work. You put in a lot of work in a lot of areas and have 
identified some areas of high need and are paying attention to 
some things.
    Let me ask you, what the Chairman had mentioned before on 
the Education Freedom Scholarships and Opportunity Act, I know 
that it does not come through this committee, but it certainly 
affects education, and it is something that my State is 
currently dealing with right now in ongoing debate.
    We have had a program for a while where individuals are 
able to give money toward public schools and their foundations, 
or towards a private, or charter, what it may be, and have a 
tax credit based on this. Describe this to me and how this 
would work.
    Secretary DeVos. Thanks for the question, Senator. I will 
be happy to. The proposal for Education Freedom Scholarships is 
to establish a Federal tax credit that individuals and 
corporations could voluntarily contribute to, a $5 billion 
annual program--or annual fund, that States could then elect to 
participate in, or not. The States that did, the proposal is 
for it to be distributed similarly to Title II-A, so, based on 
both population and poverty levels.
    And then States would have great latitude in using those 
funds to develop more choices and more opportunities for the 
student, the K-12 students in their State. It would allow for a 
State to use something like or to advance something like an 
apprenticeship program, and opportunity to increase dual 
enrollment opportunities, to expand career and technical 
opportunities, in addition to the more traditional ways that we 
think about choices and adding choices.
    And so, it really is a wide open and very great 
opportunity, we think, for States to be able to meet the needs 
of students without taking anything away from the public school 
classrooms or public school students that are being served 
today.
    Senator Lankford. Now these are individuals committing 
their own dollars to be able to sink into and be able to invest 
into it.
    Secretary DeVos. That is correct.
    Senator Lankford. Again, this is something that has been a 
successful program in my State that there is currently debate 
in my State legislature about doubling a program like that 
within my own State.
    The current technical education in Oklahoma is ranked 
number one in the country for what they are doing in career 
tech and the innovation that they continue to do. It is a long-
standing program, but we could always certainly use the help. 
Though we are number one in the country on it, we would like to 
be able to stay that way and continue to be able to advance 
those types of programs.
    So, I appreciate your engagement on that, and I will look 
forward to getting a chance to work on that. I serve in the 
Finance Committee as well and look forward to the ongoing 
dialogue about that in the days ahead.

                         COLLEGE ACCREDITATION

    There is an ongoing question about accreditation, if there 
is an issue with accreditation and accreditors. As Senator 
Durbin brought up before on some questions on accreditation, 
there seems to only be a heavy hand, basically, the nuclear 
option of taking them out entirely. That does not just affect 
one institution that affects every institution that they have 
been around.
    As you examine the accreditation process, are there 
specific areas that you are trying to evaluate on how to be 
able to work with the accreditors that are there?
    Secretary DeVos. Thanks for that question. As you probably 
know we are in the middle of a negotiated rulemaking session 
around accreditation and around innovation in higher education. 
There has been some very good dialogue, very good debate, very 
good discussions. I am very hopeful that the negotiators are 
going to come to consensus and that very soon we are going to 
be able to put forward some recommended changes to make 
accreditation more relevant to the 21st century, and more 
relevant to higher ed institutions today. I am very optimistic 
about that.
    Senator Lankford. Good. Well, we will look forward to that 
and hopefully that negotiated agreement comes to pass. We could 
use some clarity in that.
    One quick comment, and then another question, as well. Your 
department stepped up in the area of religious liberty and 
contracting and followed the Supreme Court decision. You took 
the several months that it took to be able to evaluate that 
decision, to be able to put it in place, and to say that the 
Department is not going to discriminate on any faith of any 
background, or any entity based on contracting simply because 
they have any faith.
    Thank you, for engaging in that. That has been an ongoing 
conversation for quite a while, and that just because an 
institution is Jewish, or Muslim, or Christian or Sikh, or 
whatever it may be, does not mean that they also cannot 
contribute services to our schools and to the Department of 
Education. I appreciate your engagement in that area and for 
completing that.

                           PARENT PLUS LOANS

    One of the areas of loans that I have been very concerned 
about that I am concerned about for families long-term, is the 
Parent PLUS Loan Program. Schools have very little visibility 
in that. They see where the student loans are, but they cannot 
see on the Parent PLUS Loans. Many parents want their kids to 
be able to get into grad schools and to be able to be sustained 
and not carry debt. They carry debt; those Parent PLUS Loans 
will then garnish their Social Security in the days ahead, and 
everything else. It is a ticking time bomb for those parents as 
they approach retirement in the days ahead if it is not 
fulfilled.
    Any conversation on the Parent PLUS Loan field?
    Secretary DeVos. I think this is a very real issue and one 
that I hope that Congress deals with in a meaningful way. We 
know that 70 percent of the increase in student loan debt 
total, comes from additional loans to current students. So, it 
is 30 percent that are coming in as new students. And the fact 
that we are at $1.5 trillion of student loan debt and growing, 
is indeed a ticking time bomb.
    This--the Administration has some proposals around 
simplifying student loan repayment, but we also are working on, 
in a more upfront process or information, that will provide 
students with a lot more information going into school 
programs. They will be able to compare earnings level--program 
level data around earnings potential between institutions and 
among programs.
    We think that will be a very important tool and a very 
important step, but I think the question about unlimited Parent 
PLUS Loans and unlimited graduate school loans is a very real 
one to be dealt with.
    Senator Lankford. Yes, thank you.
    Senator Blunt. Senator Shaheen.

                            TRIO AND GEAR UP

    Senator Shaheen. Thank you, Mr. Chairman.
    Secretary DeVos, as I am sure you are aware, first 
generation college students and those who come from lower 
income families face unique challenges when they get to 
college. First, in trying to get there, and then in succeeding 
when they get there.
    Two of the programs that have really--have good data to 
show how successful they have been are the TRIO Program and 
GEAR UP. So, I am very concerned about your proposal to 
eliminate funding, all funding for GEAR UP next year, and to 
make significant cuts to the TRIO Program, including 
eliminating the very successful Student Support Services.
    Yesterday, I had a group of TRIO folks in my office. 
Students who had gone through the program, and one young woman 
I met yesterday, a woman named Ashly Dukus, who is from 
Rochester, New Hampshire, credits TRIO educational talent 
search program as the reason that she was able to go to 
college. She is the first generation in her family to graduate. 
She said, ``I never even thought college was an option until I 
was engaged with the TRIO Program.''
    She went to the University of New Hampshire. She has 
graduated. She said that Student Support Services helped her to 
succeed there. She has begun to participate in Trio's McNair 
Program, it allowed her to go to graduate school to study 
psychology. She is now out beginning her career as a 
psychologist and is counseling 9/11 first responders, and she 
says without TRIO she never would have been able to achieve any 
of this success.
    So, do you believe--No, I would like for you to explain, if 
you would, the proposal to cut so much of TRIO's funding, and I 
would also ask if you believe that at the Federal level we 
should provide any help to low-income or first-generation 
students to help them succeed in higher ed?
    Secretary DeVos. Senator, thanks for the question and let 
me just begin by saying, I believe that we do in many ways 
support first-generation students and I am totally with you on 
the need to ensure that they have opportunities.
    If I could just comment to your specific question around 
GEAR UP and TRIO. GEAR UP, we have proposed that GEAR UP be 
folded into TRIO essentially. They are very similar activities, 
similar programs and that the program be consolidated into a 
State formula-funded program rather than the current 
competitive grant program that we have, because we have 90 to 
95 percent of those grants that go to the same institutions 
time after time, and in fact, are not necessarily targeted at 
helping the most needy students.
    So, our proposal would suggest that States that are closer 
to the students they are serving would be able to better target 
those resources and would save administrative costs in the 
process. That is what we have put forward as the proposal.
    Senator Shaheen. But you are cutting both of those programs 
significantly as part of doing that, are you not?
    Secretary DeVos. Well, as I said earlier, we had to make 
decisions as part of this budget, we were constrained in the 
total budget. We were insistent on holding some of the most 
broad and largest programs harmless so that we could serve the 
most students.
    Senator Shaheen. I understood that you said that. I think, 
however, those kinds of cuts ultimately undermine what the 
Department is trying to achieve by helping those students, 
particularly those who come from lower-income families, those 
students who are first-generation in their families to go to 
college, who have more difficulty succeeding.

                           STUDENT LOAN DEBT

    I want to go onto student loan debt, because in New 
Hampshire, we have the second-highest student loan debt burden 
in the country. Our office heard from a woman named Valerie, 
who is a teacher in Lee, New Hampshire, and she said, ``I have 
been repaying my student loan since 2002 and what I have 
learned is that debt begets debt. This debt has caused me to 
acquire higher interest rates for loans and credit cards, and 
the first 5 years of my career, I struggled to support 
myself.''
    She goes on to say that because of all of the challenges of 
that student loan debt, and the current salaries for teachers 
that she has not been able to improve her financial scenario. 
And you and Senator Lankford, your exchange about the amount of 
student loan debt that is currently out there, is devastating. 
We are hearing from people in the real estate community, people 
across New Hampshire, that the amount of student loan debt is 
affecting young people's ability to marry when they want to, to 
get the job they want to, to have kids when they want to, to 
buy a home when they want to.
    So, given all of that, I do not understand how the 
elimination of key college affordability programs is going to 
help us address the student loan debt burden.
    Secretary DeVos. Good questions, and a concern that we 
share. We want students that most need to be able to access 
higher ed, to be able to do so. I am really enthused about some 
of the efforts we have underway through Federal student aid to 
bring the whole framework and experience around Federal student 
aid into the 21st century, and to give students many more tools 
in being able to research and consider their path, their 
opportunities; to be able to know what they are likely to be 
able to earn through a specific program at a specific 
institution; to make comparisons to give them a lot more tools 
to be financially literate about the debt that they are taking 
on; and what those implications are for the longer-term.
    That is one way that we can begin to help them become 
better consumers, and then in the process to have an experience 
with FAFSA with Federal Student Aid that is much more consumer 
friendly, and much more world-class in its orientation.
    Senator Shaheen. Well, thank you. I think what my 
constituents need is help with that debt burden, not more 
options.
    Thank you, Mr. Chairman.
    Senator Blunt. Thank you Senator Shaheen.
    Senator Rubio.

                    STUDENT LOAN DEBT AND REPAYMENT

    Senator Rubio. Thank you. Thank you for being here, Madam 
Secretary, and thank you for holding this hearing, to the 
Chairman and the Ranking Member.
    I am glad to see student loans have become such a prominent 
topic of conversation. I have often talked about the student 
loan burden that I, myself faced, after going to school and law 
school, and I know the significant burden it placed on us for 
many years. I know people are impacted; the numbers speak for 
themselves.
    So here shortly, we are going to be introducing legislation 
that tries to tackle this in a different way. It would 
eliminate interest in the direct Federal loan, and it would 
replace it with a one-time fee that would not increase, not 
accrue interest, it would be paid over the life of the loan. It 
would basically establish a one-time fee that would account for 
the cost of servicing the loan and so forth, but at least the 
student is not facing the compounding effect.
    Another thing this bill that we are going to file will do 
is, it is going to automatically place borrowers in a repayment 
plan that reflects their income. So we can guarantee that they 
are not into default, because once, as we all know, these are 
loans that can never be discharged not even in bankruptcy and 
in many cases, and once you get into default you are locked out 
of home ownership and it has a sort of a, scale effect on the 
rest of your life.
    I know this is sort of a new idea. I think we have shared 
it with your staff a little bit. We have not filed it yet, but 
what is your sense of what the Department's position would be 
on that, or at least their willingness to work with us on it.
    Secretary DeVos. Well, I think we share a lot of your 
concerns and a lot of your goals, and I look forward to more 
closely reviewing your proposal and working with you on that. 
Student loan debt is a crushing burden on way too many in this 
country, and it is soon to be a crushing burden on our country 
as a whole.
    Senator Rubio. Again, I think what we are trying to really 
focus on is the impact that the accrued interest has, and also 
the disconnect that exists between how much someone is paying 
or borrowing. Which leads to another bill that we have, which I 
think is consistent with what the Department has recently 
announced as a priority.

                           INFORMED BORROWING

    And that is, providing students information before they 
seek a particular path, and the right to know before you go, 
which would provide them with baseline information, this is how 
much people make when they graduate from here with that degree. 
We are not banning any degrees, we are not prohibiting people 
from even borrowing to pay for those degrees, but we do think 
there is a massive disconnect between how much people are 
borrowing and assuming as a liability and a real understanding 
of what they can expect to earn at the back end of that 
process.
    So, the combination of those two things, dealing with the 
compounding effect of interest and more information on the 
front end, we think could help, from this point forward allow 
students and families to make more informed decisions.
    That second provision about more information, that is 
consistent with some of what the Department is directing, 
correct?

                             LOAN SERVICING

    Secretary DeVos. Yes, absolutely.
    Senator Rubio. Related to student loans on a separate 
topic, and I have gotten a number of emails and inquiries about 
the way that the contracts are being handled and the servicing 
of the existing loans. And again, what--the emails I have 
gotten from a couple of folks. And I was just curious to see 
what is going on here with this, is that, it really deals with 
some report language that was included in last year's bill 
about not awarding new contracts to the Next Generation 
Program. Apparently, at least according to those who are 
contacting us, they are saying that the intent of that language 
has not been followed by the Department, and I guess now it is 
entangled in lawsuits and so forth.
    Could you give some insight or explanation as to the status 
of all--what is happening there with all of that?
    Secretary DeVos. Sure, so the move to the Next Gen 
framework requires a lot of new contracting because providers 
are going to be doing different pieces of the behind-the-scenes 
loan servicing support for the whole Federal Student Aid 
program.
    Heretofore, it has been a real patchwork, and it has been 
sort of layered upon, year after year, after year. So, in the 
process of moving to that new framework, some change is going 
to have to take place for some of those who have provided 
services before, and all of the various contractors have every 
opportunity to bid for work under the new framework. We are in 
the middle of that process now, and predictably, there are 
challenges to, and lawsuits about, the change, the changes that 
are being made, because we know change is hard.
    Senator Rubio. But has the Department been meeting or 
talking to some of these incumbent providers or others that 
have bid in the past?
    Secretary DeVos. Yes, and regular contact and regular 
dialogue, and making sure that they are aware of and clear on 
their opportunities for bidding on pieces of the business. So 
yes, we are being very diligent along the way in ensuring all 
of those processes are followed.
    Senator Blunt. Thank you Senator Rubio.
    Senator Reed.

                  LOAN DISCHARGE FOR DISABLED VETERANS

    Senator Reed. Thank you very much Mr. Chairman and thank 
you, Madam Secretary.
    Let me begin with an issue of totally disabled veterans who 
have student loans. I am pleased the Department now has a data 
matching program for easing the process for student loan 
discharge to the veterans who are totally and permanently 
disabled.
    We have been urging you, along with some of my colleagues, 
to have an automatic discharge for these individuals. One 
holdup was prior to the Tax Cuts and Jobs Act of--recent Act, 
that there was some income tax liability. That has been 
eliminated.
    So, does the Department plan to automatically discharge 
these loans, and if not, why not?
    Secretary DeVos. Senator, I believe that is the case, but I 
will be happy to clarify that for you and check with the folks 
that are responsible for that to assure that.

           CAMPUS FINANCIAL SERVICES AND PROTECTING STUDENTS

    Senator Reed. Thank you very much, Madam Secretary.
    Another issue that came up late last year through a Freedom 
of Information Act request, a CFPB (Consumer Financial 
Protection Bureau) report was made public, which did an 
analysis of those college campuses that had a financial 
relationship with the bank, and the benefits or costs 
associated with that to the students. And they found out that 
these relationships usually result in students paying much 
higher fees than otherwise.
    The most egregious example was Wells Fargo students at 
campuses with--that had an arrangement with Wells Fargo, paid 
an average of nearly $47 in fees compared to less than $12 at 
other campuses, without these exclusive type deals.
    What steps are you taking to carry out your mandate, which 
is to ensure that the schools act in the best financial 
interest of their students?
    Secretary DeVos. Sir, we take that responsibility seriously 
and are working, continuing to work with the servicers through 
this period and into the Next Generation framework, which will 
be a different construct for servicing the student loans.
    Senator Reed. These are not student loans, Madam. These are 
the relationships where the school has a contract with the bank 
providing debit cards to students, providing other services, in 
fact, insisting sometimes the student must use this debit card. 
And it turns out that the fees are quite a bit more steep 
than----
    Secretary DeVos. Sorry, I misunderstood, sir. Actually, as 
part of the Next Gen initiative we have launched a pilot 
program that will include a debit card for students very 
clearly delineating the fact that fees cannot be added to by 
the banks that are providing the services and ensuring that 
protection for students.
    We are very keen about this issue and are aware that we 
need to be ensuring that students are not taken advantage of in 
that way.
    Senator Reed. Will you continue to ask CFPB to monitor this 
issue?
    Secretary DeVos. Well, we are monitoring it directly with 
Federal Student Aid.

                  SCHOOL FACILITIES AND INFRASTRUCTURE

    Senator Reed. Okay. Let me turn to another issue. There has 
been a lot of discussion of emergency, but one emergency, I 
believe at least, is the crumbling schools throughout the 
country, elementary and secondary schools. I am very pleased 
that Senator Tim Scott, my colleague from-- Chairman, excuse 
me, Chairman Bobby Scott, my colleague from the House of 
Representatives has joined me in a Rebuild American Schools 
Act, to invest we hope, $100 billion in school infrastructure. 
I do not think there is anyone in this committee that has not 
visited a school in their State that it needs significant 
repairs, and also updating, because of the technology that is 
available now to teach young people, and also the savings that 
can be accomplished through better heating systems and better 
cooling systems.
    I would hope you would support this effort. I think it is 
important, and I would just get your reaction to helping out in 
this school infrastructure issue.
    Secretary DeVos. Well, I think it is an interesting 
proposal, a very costly one at that. I think what I would 
actually advocate for is giving more students and more parents 
more freedom and choices to find the right fit for their 
child's education. I think we are going to have--we are going 
to make more progress and have more gains in student 
achievement, if students are able to find schools and education 
environments that work specifically for them.
    Senator Reed. Well that is an interesting concept, but we 
still have an obligation to provide public schools in every 
community, and many of those schools just are, absolutely 
unsatisfactory, in fact, sometimes pose a danger to the health 
of the student. And the reality too, is that choice is not 
infinite for some families and very limited because of 
transportation, because of many factors. But our fundamental 
commitment to public schools, which I hope we honor, would I 
hope, encourage us to invest in their reconstruction.
    Thank you very much, Mr. Chairman.
    Senator Blunt. Thank you, Senator Reed.
    Senator Hyde-Smith.

                       SUPPORT FOR RURAL SCHOOLS

    Senator Hyde-Smith. Thank you Mr. Chairman. And Madam 
Secretary, thank you so much for the phone call last week. I 
have found you to be so responsive and you are just making me 
really proud of the job that you are doing.
    And as we discussed in that phone call, and I have gotten 
some more information, I just believe it is imperative that the 
Department support research grants to address specific 
challenges, especially those of rural schools and rural school 
districts such as we have in Mississippi. And I understand that 
the Department has a grant program Education Innovation and 
Research, dedicated to funding ideas that will fill educational 
needs and to improve student achievement.
    How are you working to ensure that these grants address the 
challenges that are most pressing in rural communities, such as 
literacy achievement, and teacher recruitment, which we are 
really having a tough time with in I think, the entire 
Southeast.
    Secretary DeVos. Thanks Senator for that, for your 
encouragement, and also for the question about the challenges 
that rural schools face.
    We have a number of initiatives that I think really get 
after the challenges that rural students and rural educators 
are facing, and one of them is one that will really help 
advance teachers in their own development and in their 
professional life and their career paths. It is through the EIR 
Program and it would allow for teachers to be able to continue 
to develop with a stipend or a voucher that would allow them to 
do professional development in ways that are going to work for 
them, to control that rather than having the district or the 
State mandate whatever it is.
    And then secondly, to create a program around mentorship of 
new teachers or ones that really need to have a little extra 
help early in their career and that would allow really 
seasoned, excellent teachers a career path to pursue, aside 
from feeling like they have to go out of the classroom into an 
administrative role. That coupled with a focus on enabling 
rural schools and rural communities to have more flexibility 
with the students they are serving and how they do things.
    I think about a school that I visited in Mississippi that 
did not have an AP physics teacher. They partnered with a 
private organization to provide distance learning for their AP 
physics students, and it was a win-win for everyone involved.
    Being able to work flexibly and creatively in that way, I 
think, are some of the ways in which we can help rural 
communities meet the needs of their students.
    Senator Hyde-Smith. Wonderful. Just a follow-up to that. 
How are you ensuring geographic and institutional, diversity 
for these grant programs and other education grant programs 
that are being implemented?
    Secretary DeVos. Well, we work with you on a framework for 
each of these programs and then carry out the grant programs in 
accordance with that. We know that there is a need in rural 
communities, and so, we will continue to work with you to be 
focused, specifically in that area.

        WORKFORCE DEVELOPMENT AND CAREER AND TECHNICAL EDUCATION

    Senator Hyde-Smith. Okay, I have a little time left.
    Congress has continued to show support of the workforce 
development, which is something very near to me, most recently 
with the reauthorization of career and technical education 
legislation. And as we have talked before, there are many of 
these well-paying jobs within Mississippi and across the 
Nation, which we are waiting to be filled by students with 
special technical skills. It is important that we work together 
to remove any remaining stigmas associated with career and 
technical jobs.
    What can the department, and actually Congress as well, do 
to help support and expand access to career and technical 
education programs in our K-12 system and the community 
colleges?
    Secretary DeVos. Great questions. Part of the answer to 
that is to implement the Education Freedom Scholarships plan, 
which would allow States to create programs specifically around 
these needs, or whatever needs they have in their State and in 
their local communities. And part of it is related to proposal 
for $60 million to create pre-apprenticeship programs in high 
schools that will allow students to explore and pursue some of 
these great opportunities and tracks.
    I said earlier that I think we need to be helping students 
learn as early as early middle school, what some of these 
alternatives are. Waiting until they are in 11th or 12th grade 
is almost too late. We know that there are so many good 
opportunities out there, and at the same time it is a really 
important time for business and industry to come close to, and 
partner with educators to create the programs that are going to 
meet those needs and that are going to give students the 
opportunity to pursue those jobs.
    Beyond that, the short-term Pell program, our proposal, I 
think, helps to get after that as well to allow students to 
pursue certification and certificate programs that are shorter 
in nature, but that is obviously post-high school.
    Senator Hyde-Smith. To your point on that, what do we do to 
really encourage industry to invest in workforce training, even 
at a high school level that we could do to attract industry to 
invest their actual dollars in those programs?
    Senator Blunt. Secretary, you need a pretty quick answer on 
that.
    Secretary DeVos. I think it is happening in multiple 
communities; it needs to happen more, but it really happens by 
region and by community.
    Senator Blunt. Thank you Senator Hyde-Smith.
    Senator Murphy.

                TAX CUTS, DEFICITS AND DOMESTIC SPENDING

    Senator Murphy. Thank you very much, Mr. Chairman.
    Welcome Madam Secretary, thank you for being back here 
again. I do appreciate the way that this Committee and the 
Subcommittee has worked together in the past to reject these 
very hurtful cuts that have been proposed by the 
Administration, and I agree that we will likely come to a 
bipartisan consensus on how to at least hold the line on 
education spending.
    But I just will say to my committee members that it is a 
little hard to stomach a lecture from this Administration on 
the danger of deficits. In February of this year we had a $234 
billion deficit, which is a record for this country. Never 
before have we had that big of a deficit in any 1 month. That 
is the result of a tax cut that was passed, 80 percent of the 
benefit going to the richest 1 percent of Americans, which now 
commands us to cut money from schools. And that is the choice 
we are being asked to make, we need to tighten our belts when 
it comes to funding for kids because we have chosen to give a 
massive tax cut, mainly to folks in this country who do not 
really need it.
    So, I think it is important to lay the foundation for why 
we are being asked to pass along these big, big cuts to our 
kids. It is to finance a tax cut that by and large, when it is 
fully implemented, will not help those kids in those lower 
performing or middle-class schools.

               TITLE IV, SCHOOL SAFETY AND MENTAL HEALTH

    Towards that end, Secretary DeVos, I wanted to ask you 
about the effect of your proposal to completely eliminate Title 
IV. And I say that in the context of a conversation that we are 
having in this country right now about suicides. Suicide rates 
amongst children ages 10 to 17 has increased 70 percent between 
2006 and 2016. It has obviously been in the news tragically, 
over the past several weeks.
    And Title IV provides over $1 billion, for a variety of 
activities to improve school climate and to address trauma in 
schools; it funds suicide prevention programs throughout the 
country.
    So, I want to ask you what the rationale could be for 
cutting the Federal funding that helps schools build these 
suicide prevention programs, they are just not going to be 
replaced magically by private dollars, when we have a national 
epidemic that we have to get our head and hands wrapped around.
    Secretary DeVos. Senator, thanks for the question. The 
budget proposal does include Title IV funding elimination 
because we believe that that particular fund has been very 
thinly spread, it has not been specifically used for just 
school safety activities. Our budget does propose collectively, 
administration-wide, $700 million specifically for issues or 
for programs related to school safety, and the Department of 
Education's budget includes $200 million, $100 million of which 
is designated for mental health, and health and social 
emotional well-being of students, specifically. Specifically 
targeted to really getting at school climate and helping 
schools to better, to better deal with these issues, these 
heartbreaking issues, at the school level.
    Senator Murphy. It comes nowhere close to making up for the 
cuts in this bill and a lot of that money is spread out over a 
whole bunch of different kinds of programming, other than the 
mental health and suicide prevention funds that are used by 
schools in Title IV.

                     SIGNIFICANT DISPROPORTIONALITY

    I wanted to turn to one more issue and that is the issue of 
what has become known as the significant disproportionality 
rule. This--you and I, I thought, had very good conversation 
before your hearings about the concern that disabled students 
and students of color are disproportionately identified for 
special education, and also disproportionately subject to 
overly harsh discipline.
    You attempted to push off a rule that would get us more 
information on how these vulnerable communities of students are 
being treated, and the courts actually intervened and said that 
you could not delay that rule commanding States to give us data 
on how those communities of color and disabled communities are 
being treated, requiring you to implement that rule.
    So, I was hoping that you could give us confirmation that 
you are indeed requiring States to comply with the significant 
disproportionality rule in accordance with the court order.
    Secretary DeVos. Well Senator, thanks for that question, 
and let me just reiterate that every student should receive the 
services they need. I am concerned about both over and under 
identification of students in need of special education 
services. We are committed to treating students as individuals 
and not more broadly as statistics.
    The Department is reviewing the court's decision and 
discussing our options, and we will certainly move forward from 
there.
    Senator Murphy. But the court's decision is that you cannot 
delay the--rule that you have to implement it. So, what is 
there to review about it?
    Secretary DeVos. Well, it is a lengthy decision and we are 
still in the process of reviewing it.
    Senator Murphy. So, you are not implementing the rule as of 
today. You are not requiring States to provide that data?
    Secretary DeVos. We are reviewing our options.
    Senator Murphy. I think it is worth the Committee's 
attention to this. There is a court order telling the 
Administration that they must implement this rule, and there is 
no reason for additional review. It would be worthwhile 
following up.
    Thank you, Mr. Chairman.
    Senator Blunt. Thank you Senator Murphy.
    Senator Baldwin.

             STUDENT SUPPORT AND ACADEMIC ENRICHMENT GRANTS

    Senator Baldwin. Thank you Mr. Chairman.
    Secretary DeVos, once again, in your budget it proposes 
eliminating the Student Support and Academic Enrichment Grant 
program under Title IV-A, of the Every Student Succeeds Act.
    This grant, which Congress funded in fiscal year 2019 at 
$1.17 billion supports programs that provide for a well-rounded 
education, safe and healthy schools, and the effective use of 
technology.
    In your testimony before our House counterparts on Tuesday, 
you suggested that this program is thinly spread and not shown 
to be effective.
    I have heard quite the opposite from school districts 
across the country, including in my home State of Wisconsin. 
For example, the school district of Janesville has used its 
Title IV-A funds to provide robust professional development and 
training for teachers that enhance the way they use technology 
in the classroom. And in Milton, Wisconsin they have used their 
Title IV-A dollars for afterschool programs that teach coding, 
STEM and E-sports, providing students with exposures to key 
skills, and even helping them compete for scholarships for 
college in these very areas.
    So, given what I have heard around the State of Wisconsin, 
Secretary, I am surprised by the conclusion that you have drawn 
about this program, and I am really curious about how you came 
to that. Was your decision based on data collected by the 
Department of Education from school districts on how they are 
using Title IV-A funds? And what have the results been?
    Secretary DeVos. Senator thanks for that question. And I 
will again reiterate our contention that again, in the context 
of finding areas to reduce in the budget, this particular 
program was deemed to be very thinly spread and not 
particularly effective for any specific activity----
    Senator Baldwin. And was that----
    Secretary DeVos. And let me just say that allocations of 
less than $30,000 are going to an estimated two thirds of local 
education agencies, and of less than 10,000 for another one 
third. So, pretty thinly spread.
    Senator Baldwin. Was that--you said it is deemed to be 
spread too thin and ineffective. Was that decision based on 
data, evidence collected by the Department of Education from 
student districts--from school districts on how they are using 
the funds, or is that just sort of, a gut level assessment that 
a school district cannot do anything useful with $30,000?
    Secretary DeVos. Well since the program was reoriented in 
2017, there is not enough new data to be able to collect to do 
a specific research project, but we know that $30,000 is going 
to two thirds of the LEAs and less than $10,000 to another one 
third.
    Senator Baldwin. Well, again, this does not seem to be an 
assessment based on evidence, on study, and I am getting very 
powerful information from school districts across the State of 
Wisconsin that these are vital. Think about the use of $30,000 
to train teachers in using and teaching with current and modern 
technology. That can go a long way, a long way. You get them 
all up to the latest skills, and I worked on that provision of 
the ESSA (Every Student Succeeds Act) with Senator Orrin Hatch.
    So, I really want to call into question how you can decide 
to eliminate funding for the Title IV-A program without any 
sort of thorough review of how the dollars are being spent. And 
I want to point out at the same time that one of the purposes 
of Title IV-A is to enhance school safety and address student 
health concerns.

                          SCHOOL SAFETY GRANTS

    So, alongside the elimination of the Title IV-A program, 
your budget proposes a new $100 million School Safety State 
Grant that would, according to your testimony, help build State 
and local capacity to identify and address the wide range of 
school safety and student health concerns authorized under 
Title IV-A.
    This proposal is perplexing to me for so many reasons. 
First, Congress has already provided dedicated funding for 
school safety under the Stop School Violence Act at $100 
million in fiscal year 2019.
    Second, if the $1.17 billion under Title IV-A program is, 
in your words, too thinly spread, I fail to see how a much 
smaller amount could possibly replace it and provide meaningful 
support to school districts for the broad range of student 
health and safety needs.
    Third, Title IV-A intentionally supports a broad range of 
programs, gives school districts the ability to make targeted 
decisions based on their own needs. Any school district could 
choose to direct their Title IV-A funds to focus on student 
health and safety, if that is what makes sense to them. So, 
your proposal would force them to make the choice--that choice.
    So, Secretary DeVos, I agree that student safety is a 
paramount, paramount importance, but why does your budget make 
that choice for school districts, and simultaneously give them 
drastically fewer resources to implement it?
    Secretary DeVos. Well Senator, like I said earlier, we had 
to make some difficult decisions with the budget proposal, and 
in order to meet the target of a 10 percent reduction in 
overall spending, and I will just remind every one of the 
contexts of that, $7.1 billion represents less than 1 percent 
of education spending nationally. So, it is in the scheme of 
things, a pretty minimal reduction amount. But we have 
suggested the elimination of Title IV-A just because it has 
been a very thinly spread, and not particularly effective 
program for any specific purpose.
    Senator Blunt. Thank you Senator Baldwin.
    Senator Merkley.

                    PUBLIC SERVICE LOAN FORGIVENESS

    Senator Merkley. Thank you very much. Madam Secretary, 
thank you for coming to talk to us.
    I am very concerned about the Public Service Loan 
Forgiveness Program. We have a teacher in Oregon, Jed Schaefer, 
who automatically made his payments every month and then 
continued to make those payments even after he completed his 10 
years. And eventually the Department said yes, you have paid it 
all and they sent refund checks. Great, all is on track. Except 
that the servicer then proceeded to completely wreck his 
credit. So, he was not able to take the money he now had 
available because he was not making student loan payments and 
invest in other things he had planned to.
    And this is just one small story on this massive situation 
in which 99 percent of those who apply for this program are 
being rejected by your department and the loan servicers that 
you employ. Every report on it shows that it is a confusing 
quagmire; that the servicers are poorly informed. They work for 
you. What are you doing about it?
    Secretary DeVos. Senator thanks for that question. The 
department is providing loan forgiveness to those students who 
qualify under the Public Service Loan Forgiveness Program. It 
takes 10 years to qualify, and Congress made it particularly 
difficult for students to qualify for it, the rules that you 
set up, the legislation you passed, make it difficult. So, 
within that context, we are forgiving as many student loans--
under the Public Service Loan Forgiveness Program as are 
qualified for it.
    Senator Merkley. So, Madam Secretary every single study of 
this says otherwise. It says that tons of people qualify, but 
the servicers are poorly informed, they are poorly trained, 
they often give extremely misleading information. And those 
studies provide recommendations on how to make all of this work 
better; how to make the rules from your department work better; 
how to make the servicing through the subcontractors.
    Why not champion this effort to make this program work 
rather than blaming the law, which had a flexibility on it 
handed down to your department?
    Secretary DeVos. Well sir, it actually did not have a lot 
of flexibility, Congress made it apparently, very difficult to 
qualify. So, we are going to continue to honor those that 
qualify for the Public Service Loan Forgiveness, but perhaps, 
perhaps it would be good to look at some of the things that are 
making it difficult.

                 DEPARTMENT FAILURES IMPLEMENTING PSLF

    Senator Merkley. It is an unsatisfactory response, because 
you have responsibility here. Tens of thousands of public 
servants were told they would qualify. They started to become 
eligible in August 2017 in large numbers. And you are the point 
person, so you should be up here saying, hey, here is what I 
can do, here is what the servicers can do, but here is what 
you, Congress, have to do, if indeed, you feel that the law 
needs to be changed, because this is a massive disservice to 
those who have served. They were told in very simple terms, 10 
years teaching, nursing, policing, 120 payments the Government 
will forgive what is left as a thank you. Well, they are not 
getting thank yous, they are getting rejection notices. 99 
percent are getting rejection notices.

            FEDERAL PRE-EMPTION AND LOAN SERVICING OVERSIGHT

    And I am very disturbed that your team has put forward a 
unique legal argument that because the servicers work for the 
Federal Government, they cannot be held accountable for their 
failures. Should you not be holding those servicers 
accountable?
    Secretary DeVos. We are sir.
    Senator Merkley. But you are not. Every report shows you 
are not. Where is your plan? I would like to see it submitted 
here on behalf of these students. It appears that what is going 
on is that you are working in partnership with these for-profit 
servicers rather than fighting for these public servants who 
were promised forgiveness.
    I was very struck by the letter that was written by Seth 
Frotman when he was resigning from the CFPB. He said, ``Mr. 
Mulvaney, unfortunately, under your leadership the bureau has 
abandoned the very consumers it is tasked by Congress with 
protecting. Instead, you have used the bureau to serve the 
wishes of the most powerful financial companies in America. Are 
you serving the public servants you are tasked with, or to 
protect and assist, or are you serving the powerful financial 
companies profiting off of this malfeasance and incompetence?''
    Secretary DeVos. Senator, the Department is forgiving all 
of the loans that qualify under the Public Service Loan 
Forgiveness Program, and we will continue to do so.
    Senator Merkley. And so, you say, but every study shows 
otherwise. I would love to see you championing these wonderful 
nurses, these wonderful healthcare workers, the teachers, the 
police officers who were made promises that your department is 
responsible for honoring.
    Please champion them.

                  OPIOID PREVENTION AND MENTAL HEALTH

    Senator Blunt. Thank you Senator Merkley.
    Let's go to a second round of questions.
    Madame Secretary, the Congress voted on the Support Act 
which was the opioids act passed last October. In that we 
authorized a new $50 million grant program to improve trauma 
support services and mental health care in schools related to 
addiction of students or others that students deal with. The 
budget request did not include any funding for that.
    Are you open to more feedback on this proposal and working 
with us to see what might be available to put that October 
support act, the portion that was designed to be in effect for 
students, in effect?
    Secretary DeVos. Certainly are Senator, and I am just going 
to reference here, we did run a couple of new grant 
competitions in fiscal year 2018, and we are running one this 
year. In 2018, we made 14 new awards and we expect to make 80 
awards this year to local districts for programs targeted on 
opioid prevention in their communities.
    Senator Blunt. What program are you doing that under?
    Secretary DeVos. School Climate Transformation Grants.
    Senator Blunt. And what was the total of those awards?
    Secretary DeVos. I do not have that information right here, 
but I would be happy to get back with you on that.
    [The information follows:]

                  school climate transformation grants
    In fiscal year 2018 the Department made 96 School Climate 
Transformation Grant awards totaling $52,261,948 consisting of: 14 new 
awards to State educational agencies ($9,005,206); 12 continuation 
awards to State educational agencies ($7,578,012); and 70 continuation 
awards to local educational agencies ($35,678,730).

    Senator Blunt. All right. Well, the view of the Congress 
last October was that something in the $50 million category 
when you look at all of the opioid money being spent now, could 
well be spent directly with students.
    So, let's talk about that. It is a new piece of 
legislation. I know you are working with some real restrictions 
here, but one of the things we may want to move forward on as 
we get a better number to work with, would be what are we going 
to do in this school opioid area.
    On school safety, I think there was about $95 million in 
the budget otherwise and you have added a $100 million State 
Grant program. You said today that was part of a $700 million 
overall school safety effort in the Administration. Is most of 
the rest of that in Homeland Security or do you or your budget 
chief, there----
    Secretary DeVos. Well it is actually spread between 
Homeland Security, DOJ (Department of Justice), and HHS 
(Department of Health and Human Services), so it is collective 
between all of them. I actually did just get the number for 
those grants in 2019, the amount is going to be $40 million.
    Senator Blunt. $40 million, okay. All right, well let's 
look at that and see if they are doing what we think in the 
opioid bill, if we are meeting that need, if there is a little 
head room there beyond that, and let's talk about that later.

                        TIMING OF APPROPRIATIONS

    Now, last year the Congress passed our bill and along with 
the Defense Bill and got this done as I have said in my opening 
statement, for the first time in 22 years, we got your budget 
to you, your appropriated amounts of money on time, before the 
fiscal year started.
    What difference did that make to have the money on October 
1, rather than when the other 25 percent of the Government got 
their money or say the March 1 date that you probably got your 
money in your first year you were Secretary of Education. What 
difference did it make to have that money with a full 12 months 
that you can plan and spend it?
    Secretary DeVos. Well, it clearly makes operationally, 
things much smoother and better to be able to plan ahead and to 
plan the flow of work over grant competitions and the like, 
over that period of time rather than waiting to find out what 
is going to happen, and having to do things in a rushed manner 
in a shorter period of time.
    Senator Blunt. Well, I just think you can spend the money 
more effectively and more wisely, and did more effectively, and 
hopefully we can accomplish that again this year.

                             LOAN SERVICING

    On this, the loan servicing issue, this issue you and I 
have had some serious conversations about before. What you see 
as a patchwork, I see as a competitive environment where people 
are trying to outperform their competitors and in return for 
superior performance, get more of the work to do in the future.
    Both in fiscal year 2019 and fiscal year 2018, the bill 
included language requiring the Department to ensure certain 
elements are included in the Next Generation processing and 
servicing environment to promote accountability, transparency, 
and competition in student loan servicing.
    Will you ensure that the Department will fully comply with 
whatever we put in the law on this topic?
    Secretary DeVos. Yes, absolutely, we have been and will 
continue to do so. I totally agree and know that we need to 
have a competitive environment on loan servicing, and that will 
continue under the new Next Generation framework as well.
    Senator Blunt. Well, we will continue to talk about that, 
but we are likely to address this specifically in your 
appropriating bill, and however it is signed into law is the 
way I would expect it to be fulfilled. And I anticipate that 
you would want to do exactly the same thing.
    Secretary DeVos. I understand.
    Senator Blunt. Senator Murray.

                  HIGHER EDUCATION ACT REAUTHORIZATION

    Senator Murray. Thank you Mr. Chairman.
    Secretary DeVos, as you know, I am working with Senator 
Alexander to reauthorize the Higher Education Act and we are 
both very hopeful that we can get a bipartisan bill passed out 
of the Senate this year.
    At the same time as we are working on this your department 
has been considering major regulatory changes to how students 
learn in higher education. Some of those proposed changes are 
extremely troubling to our caucus and the Department should not 
be sidestepping the will of Congress.
    Given that we are having bipartisan negotiations on HEA, 
will you commit that the Department will not issue proposed or 
final regulations during our negotiations?
    Secretary DeVos. Well Senator, first of all I am very 
enthused and optimistic about the discussions that you and 
Senator Alexander are having and hope that you are going to be 
able to come up with some very significant legislation around 
higher education and reauthorizing that Act.
    As you have indicated, we are underway with a number of 
different rules, and the timeline is such that I do not think 
we are going to have any final rule prior to Memorial Day, but 
we are going to continue with our timeline. I am doing so 
according to the process.
    Senator Murray. I must say I am disappointed with that 
response, and I will be talking with Senator Alexander on that 
because it does make it very difficult for us to continue to 
move forward, in what I think is very good way and bipartisan, 
which is going to have to be if we want to get this passed.

                 LOAN SERVICING ENFORCEMENT DISCLOSURE

    Let me ask you one other question. More than 5 weeks ago 
Chair DeLauro and I wrote you about the Department's lack of 
responsiveness to a directive that was included in last year's 
Senate Committee Report that directed, and I am going to quote 
it, ``the Secretary to respond to enforcement disclosure 
requests within 10 days of receipt,'' and to publicly explain 
its policy about disclosures. The attorney general from my home 
State of Washington and 19 other attorneys general have written 
to you expressing concern about the department's recent 
actions, and I must say I am really disappointed that we do not 
have a response to this letter. And I want to know why you are 
preventing the sharing of information that is required by your 
own department's regulations that would help these States to 
execute their laws protecting student loan borrowers from 
abusive and deceptive practices of student loan companies.

           DEPARTMENT STAFFING AND RESPONSIVENESS TO CONGRESS

    Secretary DeVos. Senator, our goal has been, and it 
continues to be to provide responses in a timely manner. I 
would just like to cite the fact that since my confirmation in 
2017, I have received--my office has received 124 letters from 
you, specifically, to my office. 110 of those have been 
responded to, and that does not include the numerous requests 
that come directly from your staff to other members of my 
staff. And since being confirmed, my office has received more 
than 1,050 congressional inquiries, 979 of which have been 
responded to, so, we are trying to be responsive in a timely 
manner. Often----
    Senator Murray. Okay, I am specifically referring to the 
enforcement disclosure requests that you are required to 
respond within 10 days of receipt, that you have not. This is 
required of you, it is required of your agencies and these 
attorneys general need you to share that information about--for 
law enforcement purposes. And it just appears like you are 
trying to hide something without responding. You are required 
to do so within 10 days.
    Secretary DeVos. And I said, our goal has been and 
continues to be, to be responsive and timely, and we will 
continue to do that.
    Senator Murray. Well it has not been so far, and we are 
expecting that and want to know from you when you are going to 
respond to those States, as you are required to do.
    Secretary DeVos. Thank you.
    Senator Blunt. What are your confirmed positions in the 
office? Are you fully staffed up at the confirmed position 
level, now?
    Secretary DeVos. No, still waiting for two assistant 
secretaries, for OPE and Rehabilitative Services.
    Senator Blunt. Well hopefully we can get that done in the 
near future. I actually share Senator Murray's concern on this, 
and it is not uniquely you, but there are two or three 
departments that we are just not getting the responses back 
from as quickly as we think we should.
    So, anything that we can do to help work with you to know 
how to direct that better, to specific members of the staff, or 
whatever. It is very helpful to us to get the information back 
quickly. It is sort of the daily oversight responsibility, and 
it eliminates an area of friction that we should all want to 
eliminate if we can, and the response number is not what it 
should be.
    I think early on not being staffed up made a big 
difference, but we should be at the end of that. You did not 
use that as a reason today, but it may be part of the reason 
over the last several months, but we need to get you your team 
in place, but your team really needs to be as quickly 
responsive as you can be.
    We are your funding source, we have an oversight 
responsibility in addition to that, and I would hope that staff 
from top to bottom would have a sense that that reporting is 
not just a nuisance, but absolutely essential, and I would hope 
we can continue to work on that and get that where, by this 
time next year there are no complaints about--from either side, 
about either too much information being requested over and over 
again, or not being responsive to those requests.
    Senator do you have any further comments?

                   BUDGETS AND EVIDENCE-BASED POLICY

    Senator Murray. I just want to make a couple of comments. 
Obviously, I am disappointed with the budget that has come 
before us. You have heard numerous statements on our side and 
on the other side, and I am confident that Senator Blunt and I 
will work together to make sure we are funding our education 
system adequately. And I do know we need to put a budget cap 
adjustment in place, but I am disappointed in this budget and 
I--we want to work to make sure that our schools and our 
students across the country are getting the support they need, 
and this is a critically important to them and I just do not 
agree with the direction of your budget.
    But I did want to say Secretary DeVos that earlier this 
year the Foundations for Evidence-Based Policymaking Act of 
2018, it is legislation that I worked with Speaker Ryan on, 
became law. It is a very important law, it will make sure the 
Department of Education and other Federal agencies are making 
decisions based on evidence, not rhetoric, not partisanship. 
And I expect your department, as well as others, but your 
department to quickly and effectively implement that law and I 
will be submitting questions for the record on the Department's 
plans on that.
    So, I just wanted to make sure you are aware of that.
    Secretary DeVos. Thank you.
    Senator Murray. Thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Blunt. Thank you, Senator. Thank you Secretary 
DeVos.
    The record will stay open for 1 week for additional 
questions.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
                Questions Submitted by Senator Roy Blunt
nextgen compliance with spirit and letter of fiscal year 2018 and 2019 
                         appropriation language
    Question. Both the fiscal year 2019 and fiscal year 2018 Labor/HHS 
bill included language requiring the Department to ensure certain 
elements are included in the Next Generation Processing and Servicing 
Environment (NextGen), to promote accountability, transparency, and 
competition in student loan servicing. Specifically, it requires that 
NextGen include the participation of multiple servicers/vendors that 
contract directly with the Department to manage a unique portfolio of 
borrower accounts and the full life-cycle of loans from disbursement to 
pay-off with certain limited exception, and that it allocates borrower 
accounts to eligible student loan servicers/vendors based on 
performance. Will you ensure that the Department will fully comply with 
the letter and intent of the law, including as part of the Enhanced 
Processing Solution component of NextGen, and any potential transition 
periods to the full implementation of any components of NextGen?
    Answer. Yes. The Department is committed to fully complying with 
all statutory provisions related to Next Gen.
   timelines for nextgen solicitations, awards, and account migration
    Question. Please provide the current anticipated timeline of major 
milestones for NextGen implementation, including when contract 
solicitations for each component will open, when contracts will be 
awarded under each component, and when borrower accounts will be 
migrated to NextGen?
    Answer. The Digital Customer Care Solution was awarded in February 
2019. The Optimal Processing Solution (OPS), the Enhanced Processing 
Solution (EPS) and the Business Process Operations (BPO) solicitations 
were issued in January 2019. The planned award date for EPS is spring/
summer 2019. The planned award date for OPS and BPO is the fall of 
2019. Borrower accounts are to begin migration shortly after the award 
of EPS. All dates are tentative as all three of these solicitations are 
currently under protest.
                      nextgen 5-year funding needs
    Question. What is the current estimate of how much it will cost in 
discretionary administrative funding annually over the next 5 years to 
administer NextGen, compared to the activities NextGen will replace? 
Please include any key assumptions behind those estimates.
    Answer. While Next Gen encompasses all Federal Student Aid 
activities, the largest costs involve student loan servicing. The 
current estimate for discretionary loan servicing costs assuming 
current pricing and contract structures is $5.1 billion in fiscal years 
2020--2024. Market research indicates that once fully implemented, Next 
Gen should reduce these costs by 10 to 20 percent. These savings would 
be driven primarily by providing customers with a common set of easy-
to-use digital and mobile self-service options that will reduce our 
current reliance on costly, large-scale call center operations, 
standardizing systems and processes to eliminate duplication and 
inefficiency, and shifting contract pricing from a static per-account 
basis to one that pays vendors based on work performed.
           contingency plans for expiring servicing contracts
    Question. Current student loan servicing contracts are set to 
expire later this year, what is the contingency plan if there is a 
delay in awarding NextGen contracts or otherwise transitioning to 
NextGen?
    Answer. The Department extended the contracts of the four Title IV 
Additional Servicers (TIVAS) for 6 months (until Dec. 15, 2019). We 
continue to review our plans for the remaining servicing contracts. We 
remain committed to Next Gen FSA's goals and objectives and are 
confident in the initiative's ultimate success.
               role of compliance in servicing allocation
    Question. A recent OIG audit found significant instances of 
servicer noncompliance with Federal requirements, and notes that FSA 
did not incorporate a performance metric relevant to servicer 
compliance with Federal requirements into its methodology for assigning 
loans to servicers. Why hasn't the Department included such metrics 
into its student loan allocation process?
    Answer. The OIG audit referenced three or four isolated incidents 
that, in fact, through the Department's internal servicer oversight, 
were discovered before the audit; the Department was already addressing 
the incidents through process improvements. It is through that servicer 
oversight process that the Department monitors and tracks servicer 
compliance with requirements.
    The Department holds its servicing vendors accountable for 
instances of non-compliance through the use of contractual provisions 
and corrective action plans. Nevertheless, the Department recognizes 
there is room for improvement in how student loans are serviced. 
Accordingly, the Department launched the Next Gen initiative, which is 
restructuring its systems, processes, and contracts to introduce even 
greater accountability based on more-targeted standards, metrics, 
incentives, and disincentives to drive outstanding performance.
     maintaining assistance to struggling borrowers during nextgen 
                               transition
    Question. The Department has indicated that it plans to 
significantly revamp the way it services delinquent and defaulted 
student loans as part of NextGen. Until the Department fully 
transitions to NextGen, how has it ensured that defaulted borrowers 
have access to services to help them rehabilitate their loans or 
otherwise get out of default? What specific metrics does the Department 
use to ensure defaulted borrowers have access to such services?
    Answer. The Department has determined that the existing PCAs under 
contract through 2024 have sufficient capacity to provide effective 
debt collection services from now until full implementation of Next Gen 
FSA.
    The volume of new accounts private collection agencies (PCAs) 
receive is determined through a set of metrics, one of which is call 
quality: the percentage of issues the PCAs correctly handle in calls 
that are monitored by the Department. PCAs that improperly counsel 
borrowers about the rehabilitation program incur a reduction in the 
number of new accounts the Department assigns. PCAs that fail to meet a 
minimum acceptable level of accuracy are excluded from receiving new 
accounts for an entire quarter.
    For the Default Resolution Group (DRG) servicer, there is a 
performance metric for response management in which the Department 
measures the accuracy of the DRG servicer's responses to borrower 
inquiries, either via telephone or in written form. In any given month 
during which the servicer fails to provide an acceptable level of 
accuracy in responses--including responses pertaining to 
rehabilitation--the DRG servicer can incur a disincentive of up to 2 
percent of the amount the Department would normally pay the servicer 
for operations and maintenance.
                                 ______
                                 
            Questions Submitted by Senator Cindy Hyde-Smith
              decrease in teachers served by seed program
    Question. Nonprofits in my own State of Mississippi are helping 
improve teacher effectiveness in the classroom, thus improving the 
academic achievement and success of hundreds of students in high-needs 
school districts. This critical training for teachers and school 
leaders is funded through the Supporting Effective Educator Development 
(SEED) program. In previous grant cycles, the SEED program had a large 
footprint serving many teachers and students nationwide. In the most 
recent SEED grant awards, I notice the number of teachers and students 
served have dropped significantly from previous grant cycles. It is my 
understanding that in fiscal year 2015, more than 50,000 teachers were 
reached, but in fiscal year 2018, only 12,000 teachers and 1,300 
principals benefitted from SEED grants. Please explain this decrease of 
teachers served by the SEED program.
    Answer. Changes in eligible applicants following the 
reauthorization of SEED by the Every Student Succeeds Act, in 
particular the addition of institutions of higher education as eligible 
applicants, have led to more locally based projects that involve 
smaller numbers of teachers compared to awards under the previous 
authority that were focused on nonprofit organizations that often 
operated on a statewide basis.
                 equitable distribution of seed grants
    Question. Last year, the Senate Labor-HHS-Education Report included 
language directing the Department to ensure that SEED grants were 
awarded to diverse set of eligible entities, including national 
nonprofit organizations implementing evidence-based activities across a 
number of sites. How will the Department ensure equity of awards 
between nonprofits and universities?
    Answer. The 15 grants awarded from the 2018 competition were those 
judged to be of the highest quality by the external peer reviewers. 
Both nonprofits and universities were reviewed against the same 
criteria. Five nonprofit organizations received $19.7 million for their 
first-year award; 10 universities received $22.4 million for their 
first-year award. National nonprofits are winning the awards at a rate 
equal to or greater than the proportion of the applicant pool they 
comprise.
                         rural charter schools
    Question. In 2017, the Mississippi Charter School Authorizer Board 
received a Charter Schools Program State expansion grant. Last year, 
Mississippi opened the first rural charter school in Clarksdale, and I 
understand the school plans to add classrooms to meet growing demand. 
In addition, there are plans to open three new charter schools in the 
Jackson area next year.
    What educational advantages do you see from these State expansion 
grants? Does the Department take a different approach working with 
States that are opening charter schools in rural areas? What do you see 
as the greatest benefits and most pressing challenges facing rural area 
charter schools?
    Answer. Charter schools play a critical role in American public 
education by increasing educational options for families and driving 
innovative instructional practices that can benefit students across a 
range of school settings. Research shows that charter schools--which, 
in exchange for stricter accountability, are generally exempt from many 
of the State and local requirements governing other public schools--can 
deliver impressive results for our Nation's students, including those 
living in poverty or at risk for educational failure.Charter school 
developers seeking to open schools in rural areas may confront unique 
challenges, including in hiring staff and acquiring facilities. The 
Department provides support in various ways to help overcome these 
challenges, including by providing customized technical assistance to 
State entities receiving Charter Schools Program funds in making 
subgrants to developers and through information dissemination on key 
topics. To the latter end, for example, the National Charter School 
Resource Center, funded by the Department, has engaged in a variety of 
efforts to highlight charter schools serving rural areas, including by 
hosting webinars focusing on how developers can successfully engage 
rural communities. Additionally , the Department has adopted priorities 
for applicants serving students in rural areas for CSP programs 
including the CMO and Developer grant competitions.
                      investment in hbcu capacity
    Question. Mississippi has a number of distinguished Historically 
Black Colleges and Universities. HBCUs in my State are nationally 
recognized for their academic programs and contributions to research. 
How is the Department investing in HBCUs to strengthen their 
educational capacity, including areas such as science, technology and 
mathematics and graduate studies?
    Answer. The Budget supports important investments in the academic 
quality, institutional management and capacity, infrastructure and 
student support services for Historically Black Colleges and 
Universities (HBCUs). In recognition of the extraordinary contribution 
provided by HBCUs, the Budget includes $626 million for programs that 
provide funding to help these institutions strengthen their capacity to 
provide the highest quality education. More specifically, the 2020 
President's Budget provides $282.4 million for the Strengthening HBCUs 
program, $73 million for Strengthening HBGIs, $8.7 million for Master's 
Degree Programs at HBCUs, $221.8 million for Howard University, and 
$40.5 for HBCU Capital Financing program.
                      fafsa process and complexity
    Question. I have heard from constituents with concerns about the 
Free Application for Federal Student Aid (FAFSA) process. Students are 
apprehensive about the complexity of the application process and the 
requirement to provide additional verification or auditing several 
weeks after the initial submission. Often the additional verification 
review and auditing takes longer than expected, resulting in aid 
approval after the school year begins. A significant number of 
Mississippians rely Federal grants and loans, so students are placed at 
a substantial disadvantage if they do not receive financial aid until 
after the school year begins. One suggested solution is to allow 
students to apply for the FASFA even earlier.
    Do you believe this is a viable solution? What are some potential 
challenges associated with an earlier application process? What can the 
Department and Congress do to help streamline the application and 
additional verification process?
    Answer. The Department must balance the burden it places upon 
students by requiring additional verification related to the FAFSA with 
the risk of increasing improper payments. It has recently taken steps 
to reduce the burden to students, while minimizing additional risks to 
taxpayers.
    In January of 2019, the Department acted to reduce the burden on 
students and families that have difficulty in obtaining documentation 
needed to verify their FAFSA and Institutional Student Information 
Record (ISIR) information (see Note 1).\*\ Specifically, the Department 
allowed students to submit signed copies of income tax returns as an 
alternative to obtaining tax transcripts from the Internal Revenue 
Service (IRS). The Department has also made the FAFSA available for 
students to fill out on their mobile phones, through the myStudentAid 
App, to ease burdens to students.
---------------------------------------------------------------------------
    \*\ Note 1: https://ifap.ed.gov/eannouncements/
010919Chngsto1819and1920VerificationReq.html.
---------------------------------------------------------------------------
    The Department currently allows students to complete the FAFSA 
beginning on October 1st of the year preceding the award year. For an 
institution that has a traditional Fall start date, a student attending 
the institution would have nearly 1 year to fill out the FASFA before 
the school year begins. The Department believes this is sufficient time 
for students to complete the electronic version of the form.
    To further streamline the verification process and to reduce 
improper payments, the Department has also sought from Congress 
exemptions from certain information-sharing restrictions in statute. 
The Department believes that such information sharing is in the best 
interest of students, institutions, and taxpayers.
                                 ______
                                 
               Questions Submitted by Senator Marco Rubio
           extending student loan contracts beyond april 2019
    Question. In last year's appropriations bill, this committee 
directed the Department to extent current student loan financing 
contracts beyond April 2019 for loan services that are in good 
standing. Does the department plan to extend these contract? If not, 
could you please explain why?
    Answer. Having no legal basis upon which to non-competitively 
extend these contracts under existing laws, FSA allowed them to expire 
upon the conclusion of their competitively negotiated period of 
performance, while taking all the necessary steps to ensure as seamless 
a transition as possible.
                   recalling accounts not in repayment
    Question. The same act also directed the department not to recall 
accounts that are not in repayment from private collection agencies and 
allow them to continue services the loans to avoid disruptions to 
borrowers. Did the department recall these accounts? If so, could you 
please explain why the department disregarded the direction of this 
committee?
    Answer. The Department allowed the contracts to expire upon the 
conclusion of their competitively negotiated period of performance 
because there is no legal basis upon which to non-competitively extend 
the contracts under existing laws. The Department is taking all 
necessary steps to ensure as seamless a transition as possible for 
borrowers.
                 servicer management of account volume
    Question. How is the department keeping track of how well servicers 
are managing account volume? Could you please provide information 
showing the number of agencies are able to handle the volume of 
borrower accounts and provide timely responses to borrowers?
    Answer. Throughout the life cycle of the Small Business Private 
Collection Agency (PCA) contracts, the Department has continually 
assessed the capacity and capability of the 11 Small Business PCAs to 
effectively collect on current and future volumes of defaulted student 
loan borrower accounts. For example, in September 2018, the Department 
requested all PCAs provide forecasts by month of the number of account 
assignments they could accept. In addition to the September 2018 
capacity assessment, the PCAs are contractually required to submit 
reports each month, referred to as monthly deliverables, which contain 
data related to the prior month's performance. These data include items 
such as staffing levels, collections results, borrower complaints, and 
quality assurance scores as calculated internally by each PCA. Since 
October 2018, FSA staff has met with each PCA on a monthly basis to 
review and discuss results provided via the monthly deliverables. 
Results of call monitoring performed by FSA staff are also reviewed; 
issues are addressed as needed.
       meeting with private collection agencies regarding nextgen
    Question. During your testimony, you mentioned the department 
continually meets with loan servicers. In the past year, when have you 
met with private collection agencies to resolve concerns with the 
transition to the Next Generation system?
    Answer. The government regularly meets with both loan servicers and 
private collection agencies regarding their performance under their 
current contracts; however, discussions regarding an active procurement 
with a subset of potential offerors (e.g. such as those that currently 
have contracts with the Department) without making the same opportunity 
available for others would be inappropriate and contrary to law.
                                 ______
                                 
              Questions Submitted by Senator Patty Murray
              hiring delays at the office for civil rights
    Question. Despite Congress increasing appropriations for the Office 
for Civil Rights (OCR) for fiscal years 2018 and 2019 and this 
Committee directing OCR to increase the number of full-time equivalent 
staff, OCR staffing levels have fallen from 579 in fiscal year 2017 to 
510 in fiscal year 2019, according to the 1st quarter staffing report 
submitted by the Department. Right now, staff at OCR handle an 
unacceptably high 37 cases each, more than double the number 10 years 
ago.
    Why is the Department acting so slowly to hire these needed staff? 
Have there been any changes to the hiring process from the one followed 
prior to 2017? If so, what are they? Please provide the timeline for 
posting job announcements, selecting applicants, and making offers of 
employment to applicants for all approved hiring actions.
    Answer. There has been no change in the Department's hiring 
process, which includes six major steps: Workforce Planning, 
Classification, Vacancy Development and Posting, Certificate of 
Eligibles, Interview/Reference Check, and Offer/Onboarding. Each one of 
the steps has variable components that directly impact the time it 
takes to hire staff. The Department is devoting contract and Federal 
resources from across the agency to improve the hiring process and 
reduce the time it takes to on-board staff. However, even after an 
offer is made and accepted, the security clearance process could take 
weeks or even months before an employee is cleared to start work.
    The Office for Civil Rights (OCR) hired 14 staff members since 
January 2019. In addition, OCR currently has 89 positions for which 
interviews are being conducted; 4 individuals that have accepted offers 
with a start date in April 2019; and 2 outstanding offers. Finally, 13 
Position Descriptions are in the Classification stage of hiring. Once 
the classification is complete, OCR will post announcements that will 
result in multiple selections nationwide for positions such as Regional 
Director, Team Leaders, and new FOIA Personnel.
     response rate regarding specific requests from senator murray
    Question. After I raised concerns about the lack of a substantive 
response to my letter to you about the dismissal of the acting 
Inspector General and noting in my statement concerns about the 
Department's lack of responsiveness, Secretary DeVos claimed that the 
Department has responded to 110 of 124 letters I've signed. However, 
those figures overstate the true response rate because many of the 
responses do not provide the information I've requested. Please provide 
the number of specific requests I've made in my letters to which the 
Department has provided me with the requested information.
    Answer. The Department has made every reasonable effort to provide 
substantive and timely responses to your letters and the information 
you have requested from the Department through these letters, as well 
as the significant number of follow up requests for information, 
briefings, and calls with your staff on matters related to your 
letters. We value the relationships we have with you and your staff and 
consider our regular and consistent dialog and engagement on issues 
related to the Department of critical importance.
        foundations for evidence-based policymaking act of 2018
    Question. Earlier this year, the President signed into law (Public 
Law 115-435) a bill I co-wrote with former Speaker Paul Ryan called the 
``Foundations for Evidence-Based Policymaking Act of 2018.'' 
Accordingly, please provide the following information:
    What steps is the Department of Education taking to prioritize 
implementation of the bill's key provisions, including those related to 
developing a multi-year learning agenda, tapping senior leaders to 
fulfill the law's goals (e.g., a Chief Data Officer and Evaluation 
Officer, and Statistical Officer), improving coordination of data 
government at the Department, and improving accessibility of education 
data?
    Answer. The Department looks forward to supporting the key 
provisions of the Foundations for Evidence-Based Policymaking Act of 
2018 and to providing internal and external stakeholders with more 
opportunities to use and generate evidence to improve opportunities for 
students and families. The Department is working to identify qualified 
senior leaders for the key designations--including a Chief Data 
Officer, Evaluation Officer, and Statistical Official--that will best 
position the Department for success. The Department is also exploring 
new cross-office mechanisms that efficiently bolster agency-wide 
prioritization, decisionmaking, and support for program offices, 
especially with respect to developing a learning agenda, evaluation 
plan, open data plan, and establishing enterprise solutions for 
evidence and data governance.
    Question. The Department did not include a request for additional 
resources to support implementation; how does the Department intend to 
ensure the capacity exists to implement this new law?
    Answer. By the time the Foundations for Evidence-Based Policymaking 
Act of 2018 was signed into law in January 2019, the Department's 
proposed budget had already been submitted to the Office of Management 
and Budget. However, for the time being, the Department is currently 
exploring opportunities to identify efficiencies and redirect resources 
to support the new responsibilities contained in the Act.
    Question. What is the Department's timeline for designating the 
senior leaders?
    Answer. The Department is actively exploring these designations to 
identify qualified senior leaders that best position the Department for 
success. The Department fully plans to designate a Chief Data Officer, 
Evaluation Officer, and Statistical Official no later than July 2019, 
in accordance with the statutory deadline contained in the Foundations 
for Evidence-Based Policymaking Act of 2018.
                   special olympics budget amendment
    Question. As I indicated in my hearing statement, I was 
disappointed to see the President's budget proposal to eliminate $17.6 
million for Special Olympics education programs. This is the third year 
President Trump's budget has included such a proposal. Now that 
President Trump has ``just authorized a funding of the Special 
Olympics,'' when will a budget amendment be submitted to the Congress 
consistent with his statement?
    Answer. The President submitted a budget amendment to Congress on 
May 13th that included $17.6 million for the Special Olympics program 
for fiscal year 2020.
          data collection on student access to arts education
    Question. The Every Student Succeeds Act lists the arts alongside 
reading, math, and other subjects in the Federal definition of a 
``Well-Rounded Education.'' It has now been 10 years since the 
Department has collected data about student access to arts education 
through its Fast Response Survey System (FRSS). New information is 
critical to fuel progress in providing equitable access to learning in 
dance, media arts, theater, music, and visual arts. According to the 
FRSS website, findings from FRSS surveys have been included in 
congressional reports, testimony to congressional subcommittees, NCES 
reports, and other Department of Education reports. The findings are 
also often used by State and local education officials.
    What plans does the Department have underway to collect and report 
this data?
    Answer. The Department does not currently have plans to collect 
data about student access to arts education. However, it will examine 
the feasibility of collecting such information, as well as information 
on other subjects that contribute to a well-rounded education, such as 
foreign languages, computer sciences, and digital literacy.
             hbcu capital financing advisory board outreach
    Question. The Consolidated Appropriations Act, 2018 directed the 
Department to create and execute an outreach plan to work with States 
and the Capital Financing Advisory Board to improve outreach to States 
and help additional public HBCUs participate in the program. It's been 
almost 9 months since the Department indicated it was ``making progress 
in developing such a plan.'' What is the status and timeline of the 
creation and execution of that outreach plan? Please describe each of 
the activities that will be undertaken under the plan.
    Answer. The Department has finalized an outreach plan and has begun 
to execute the plan. The execution of the plan is ongoing with no end 
date. The plan is outlined in the following four points:
  --1. Providing information about the program to eligible HBCU 
        presidents and chancellors of HBCUs that are not yet 
        participating in the program to remind them of the opportunity 
        to participate
  --2. Attending conferences, if resources are available, to share 
        information with leaders in the HBCU community and to provide 
        points of contact within the Department for those institutions 
        that seek technical assistance on the HBCU Capital Financing 
        Program. Some of those conferences may include the White House 
        Initiative on HBCUs; the Thurgood Marshall College Fund; the 
        United Negro College Fund; the National Association for Equal 
        Opportunity in Higher Education; the National Association of 
        HBCU Title III Administrators, Inc.; the National Association 
        of College and University Business Officers; and various 
        accreditation conferences.
  --3. Working with State universities, State systems, or both to 
        specifically address State-level challenges to participation 
        and share potential solutions to increase public HBCU 
        participation as resources permit and where legally feasible. 
        Examples include working with State Bond Commissions, Board of 
        Regents, and State Attorneys Generals.
  --4. Asking the bonding authority of ways that it can further efforts 
        to increase outreach.
    To date, a number of activities have been implemented in support of 
this plan and information about the capital finance program has been 
disseminated accordingly. The bonding authority sent a newsletter to 
101 HBCUs as well as higher education authorities that have approvals 
over State funding. The Executive Director met with public HBCU 
presidents and chancellors at the Thurgood Marshall College Fund Winter 
Convening. The Department worked with Morgan State University and the 
State Attorney General office to close a loan. Additionally, it closed 
a loan with Florida A&M University after working years with the State.
          evidence as a priority in competitive grant programs
    Question. The Department included priorities for the use of 
evidence in 12 competitive grant programs in 2017 but only three in 
2018. What explains this reduction? For how many competitive grant 
programs does the Department plan to include an evidence priority in 
fiscal year 2019 and fiscal year 2020? Please describe the specific 
actions, including training of Department staff, technical assistance, 
monitoring and support that the Department is taking in fiscal year 
2019 and will take in fiscal year 2020 with respect to evidence 
requirements in formula grant programs under ESEA.
    Answer. When the Department develops evidence priorities and other 
components of competitions, staff review each competition individually 
and weigh the body of evidence along with other policy considerations 
to determine the most appropriate approach. In addition to the three 
fiscal year 2018 competitions that included a priority for moderate or 
strong evidence, an approximately 25 additional competitions required 
or encouraged applicants to provide evidence that meets the promising 
evidence, evidence-based, or demonstrates a rationale standards. The 
Department conducted a robust review of competitions for the 
appropriate use of evidence in fiscal year 2019 and will do the same in 
fiscal year 2020. We can share more about final decisions for fiscal 
year 2019 competitions when all notices have been published.
    The Department has begun to provide technical assistance on the use 
of evidence in formula grant programs. For example, it convened a 
community of practice focused on evidence that resulted in resources 
that were published on our website. The Department is undergoing a 
review of its capacity and opportunities to better support staff and 
the broader education community in the use of evidence, including in 
formula grant programs. The Department has reorganized in two key 
offices to support this work. First, the Office of Elementary and 
Secondary Education now includes the new Evidence-Based Practices Team 
to inform policy and planning, evaluate program outcomes using data, 
and facilitate best-practice sharing in the field. Second, the Office 
of Planning, Evaluation, and Policy Development now includes a Grants 
Policy Office that, among other things, is focused on supporting the 
Department and the field to continuously improve performance and 
results by building stronger evidence, helping offices make decisions 
based on a clear understanding of the available evidence, and 
disseminating evidence to decision makers. These teams will collaborate 
and will partner with the Institute of Education Sciences and other 
offices in the Department that focus on training and capacity-building 
to advance this work. These efforts will also be aligned with the 
requirements of the Foundations for Evidence-Based Policymaking Act of 
2018.
                    recovery efforts in puerto rico
    Question. Appropriations subcommittee staff visited Puerto Rico 
last November and documented the lack of recovery of Puerto Rico's 
public schools. School buildings and programs are still not available 
because of hurricane damage. Power, Internet connectivity, and mental 
health issues for students and school staff continue to pose challenges 
to operating schools. Please describe efforts and outcomes associated 
with the Department's efforts with funding available in the Bipartisan 
Budget Act of 2018 to assist with the restart of Puerto Rico's schools, 
including up to $3 million available for program administration. What 
additional efforts, including technical assistance with procurement and 
contracting, are planned? Further, what additional efforts will the 
Department, working in coordination with the Federal Emergency 
Management Agency, take to fully operationalize public schools in 
Puerto Rico?
    Answer. The Department of Education has engaged in extensive and 
continuous outreach and technical assistance to Puerto Rico related to 
its hurricane education recovery efforts since the hurricanes made 
landfall in fall of 2017. In particular, it has worked to ensure the 
effective and timely use of the Federal hurricane education recovery 
funding provided in the Bipartisan Budget Act of 2018. However, 
recovery efforts continue to be hindered significantly by local 
capacity and resource issues, including issues related to local 
procurement and contracting requirements. The Department currently is 
working on a range of proposals that, in cooperation with the 
government of Puerto Rico, could help address these capacity issues. 
The Department also has coordinated its hurricane education recovery 
efforts in Puerto Rico with the Federal Emergency Management Agency, 
including through the provision of guidance clarifying the 
circumstances under which Puerto Rico may use hurricane education 
recovery funds for authorized activities that otherwise might be 
covered by FEMA. For example, Puerto Rico may use Department of 
Education recovery funds to cover many of the immediate costs of 
restoring the learning environment while requests to FEMA for 
assistance are pending and repay or repurpose those funds once FEMA 
assistance is received.
  expanding performance measures for 21st century community learning 
                                centers
    Question. In April 2017, the Government Accountability Office made 
a number of recommendations related to the 21st Century Learning 
Centers program (GAO-17-400), including ``The Secretary of Education 
should direct the Office of Academic Improvement to expand its 
performance measures for the 21st Century program to address all 
program objectives. Specifically, Education should establish 
performance measures related to key behavioral, including student 
attendance and disciplinary incidents, and socio-emotional outcomes.'' 
Please update the Committee on the status of your plans for 
implementation of this recommendation.
    Answer. In fiscal year 2018, the Department awarded a contract to 
coordinate a review of the Department's performance measures for the 
21st Century Community Learning Centers program to obtain stakeholder 
feedback on those measures, inform options for revising existing 
measures, and explore the feasibility of creating new measures in the 
areas highlighted by the GAO report. Consequently, the Department 
engaged with State educational agencies, local educational agencies, 
and other stakeholder groups in facilitated teleconferences in early 
2019. Department staff and the contractor are currently collaborating 
to develop revised performance measures which the Department will then 
send to the Office of Management and Budget for review.
  borrower defense backlog and compliance with congressional directive
    Question. Secretary DeVos testified that she believed borrower 
defense claims were being reviewed as of March 28, 2019, even though 
the Department had already prepared data for a report to this Committee 
showing that not one borrower defense claim had been approved in the 
last 6 months of 2018. In Senate Report 115-150 accompanying S. 1771, 
the Committee directed the Department to report on"specific actions 
taken and planned to process this workload in a timely manner.'' 
However, the Department has not provided such information as directed 
and has taken no action to reduce the backlog of pending claims which 
has now grown to 158,000. What is the Department's timeline and plan 
for eliminating the backlog of pending borrower defense claims and for 
coming into compliance with the Committee's directive by reporting on 
actions taken to process pending borrower defense claims in a timely 
manner?
    Answer. The Department continues its efforts to implement the 2016 
final regulations. Although ongoing litigation enjoins the Department 
from using the Department's relief methodology for approving borrower 
defense claims, the Department continues to adjudicate the applications 
on the merits so that applications can be processed swiftly once an 
alternative relief methodology is determined.
                       impact aid research agenda
    Question. Please describe the Impact Aid research agenda identified 
in the fiscal year 2020 Justifications of Appropriation Estimates to 
the Congress ``to help determine the appropriate Federal share in 
supporting districts impacted by the presence of Federal property.''
    Answer. The Department held preliminary discussions and scheduled 
additional meetings in spring 2019 to gather information and ideas to 
inform an Impact Aid research agenda. Possible options include building 
on analyses completed in 2007-2008, when the Department contracted for 
a study that examined the financial burdens school districts faced due 
to the Federal presence and how well funding formulas were targeted to 
affected districts. That study focused primarily on the Basic Supports 
Payment and Payments for Children with Disabilities programs and did 
not look at the Payments of Federal Property program. The Department 
has also looked at revenue data compared to current Payment for Federal 
Property formula payments and found 89 percent of LEAs received 
payments that accounted for less than 5 percent of their total revenue 
in fiscal year 2017. Further analysis could help the Department 
determine to what extent LEAs are still impacted by the Federal 
acquisition as long as 60 years ago and inform future budget requests 
for the various components of the Impact Aid program.
details on proposed grants for school choice under special programs for 
                            indian children
    Question. Within Special Programs for Indian children, the fiscal 
year 2020 Justifications of Appropriation Estimates to the Congress 
states that ``the Department plans to conduct Tribal consultations. . . 
. Based on the feedback gathered during these consultations, the 
Department will provide up to $10 million in fiscal year 2020 to 
support grants that expand the ability of families to choose high-
quality educational opportunities that meet the needs of Native 
youth.'' Please provide more specific information about these proposed 
grants, including absolute priorities, eligible uses of funds, eligible 
applicants, and plans for evaluation of the proposed grants.
    Answer. In general, the Administration is focused on putting 
decisionmaking power back in the hands of students, families, and 
communities. We do not have specific information to share about this 
proposal at this time. The Department will publish a notice of proposed 
priorities, requirements, definitions, and selection criteria (NPP) in 
the Federal Register for public comment prior to finalizing the details 
of the fiscal year 2020 competition, and the NPP will reflect input 
from Tribal consultation.
    role of pre-apprenticeships in existing apprenticeship program 
                             infrastructure
    Question. The Department proposes $60 million to support State 
efforts to create pre-apprenticeship programs that increase the number 
of adults who are able to meet the basic entrance requirements of 
apprenticeship programs. Please clarify whether the purpose of such 
pre-apprenticeship programs is to enable participants to qualify for 
and participate in existing registered apprenticeship programs. If not, 
why does the Department choose to ignore the existing infrastructure 
around such high-quality registered apprenticeship programs and instead 
propose pathways into duplicative, lower quality programs?
    Answer. The Administration's pre-apprenticeship proposal would help 
low-skilled adults qualify for and participate in existing high-quality 
apprenticeship programs identified by each State, including registered 
apprenticeships. The proposal would utilize the infrastructure both of 
State agencies that operate Adult Education programs as well as those 
of existing apprenticeship programs.
   institute of education sciences funding for research partnerships 
                       versus alternative models
    Question. The director of the Institute of Education Sciences (IES) 
has publicly expressed criticism of the value of research practice 
partnerships previously funded by this agency, including those funded 
under the Regional Educational Laboratories program. However, this does 
not align with what educators say about this model of conducting 
research being vastly superior to the purely academic approach to 
education research. Is there a better approach to involving educators 
in setting education research agendas? If so, what is it and does IES 
plan to fund this approach?
    Answer. IES's main responsibility is to produce research that can 
help improve the education outcomes of learners throughout the life 
cycle. Our experience with Researcher-Practitioner Partnerships (RPPs) 
suggests they often elevate the process of partnering between 
practitioners and researchers without sufficient attention to whether 
or not these partnerships produced results that improve educational 
outcomes. IES is not discouraging partnerships between researchers and 
practitioners. Indeed, it recognizes that these partnerships can help 
translate research into practice; however, it also believes that 
researchers should be free to use a variety of approaches to involving 
educators in research.
     public service loan forgiveness outreach and compliance with 
                        congressional directive
    Question. The Department received $2.3 million in each of fiscal 
years 2018 and 2019 ``to conduct outreach to borrowers of loans made 
under part D of title IV of the Higher Education'' including ``the 
Secretary shall also communicate to all Direct Loan borrowers the full 
requirements of section 455(m) of such Act.'' Unfortunately, the 
Department has failed to comply with this requirement and has instead 
pursued various information and social media campaigns that have both 
failed to comply with the fiscal year 2018 and 2019 appropriations 
acts. By when will the Department comply with these requirements to 
contact all Direct Loan borrowers about Public Service Loan 
Forgiveness? Additionally, what specific strategies will you adopt, and 
when, in the remaining months of fiscal year 2019 and for fiscal year 
2020 so that public servants that are eligible for the forgiveness 
programs created by Congress (PSLF and TEPSLF) to receive the relief 
they need and deserve?
    Answer. A series of targeted email campaigns sharing specific 
information about PSLF Program requirements and procedures are planned 
to segments of Direct Loan borrowers. FSA currently plans to conduct 
these email campaigns in July and November/December 2019. Routine 
emails sent to all borrowers whose grace periods are ending already 
provide information about PSLF and various repayment plan options to 
every Direct Loan borrower about to enter repayment.
    Additionally, on a weekly basis, FSA emails all PSLF applicants 
denied that week with specific information about TEPSLF eligibility and 
the application process. To date, FSA has sent approximately 20,000 of 
these emails.
    FSA is reviewing all PSLF borrower communications to improve 
content and clarity to ensure borrowers receive sufficiently detailed 
information regarding counts of qualifying payments and their repayment 
history. FSA is also planning additional blog posts, webinars, and 
other outreach events for the coming months to help promote PSLF and 
TEPSLF to borrowers. FSA also plans to conduct organic and paid social 
media outreach about PSLF, the PSLF Help Tool, and TEPSLF. 
Additionally, FSA will continue to reach out to all borrowers, whose 
PSLF applications were denied, with information about TEPSLF.
    FSA recognizes there is substantial confusion among borrowers 
regarding PSLF and intends to implement improvements that will help 
clarify program eligibility and provide confidence to eligible 
borrowers that they are on track for forgiveness. On a more long-term 
basis, new functionality being considered as part of the Next Gen FSA 
initiative is expected to provide borrowers with real-time, self-
service access to information about their eligibility for PSLF and 
progress towards completion. Through the myStudentAid mobile app, for 
example, customers will be able to receive information about how to 
participate in the program, be reminded via push notification to submit 
an Employment Certification Form (ECF) and check the number of 
qualifying payments they have made. Additionally, later this year, FSA 
will be integrating the PSLF Help Tool into the new Digital and 
Customer Care platform. This will allow the Department to eventually 
add functionality to the tool, such as a database of qualifying 
employers. Next Gen FSA will also eventually give the Department the 
capability to fully digitize the ECF and application process, which 
will allow borrowers and employers to sign and submit their forms 
electronically. We are unable to provide a precise schedule at this 
time, however, as procurement activities are ongoing.
   necessity of separate school safety program given essa title iv-a 
                              flexibility
    Question. The President's budget includes $100 million for an 
unauthorized program related to school safety that seeks to replace the 
currently funded $1.170 billion ESSA Title IV-A program that State 
Education Agencies (SEAs) and Local Education Agencies (LEAs) are 
familiar with, have the constructs in place to administer, and are 
making great strides in implementing. States and local educational 
agencies are required to use Title IV-A funds to support well-rounded 
education, safe and healthy school environments, and the effective use 
of technology. How would the proposed program be more efficient or 
effective and reach the same number of school districts as a program 
more than ten times its size? Given the inherent flexibility of ESSA 
Title IV, and its strong deference to local implementation, I am hard-
pressed to believe that the proposed program allows something SEAs and 
LEAs cannot already do under the existing ESSA Title IV.
    Answer. The President's budget would eliminate the Title IV-A 
program as part of overall efforts to streamline the Federal role in 
education and promote fiscal discipline. States and local communities 
retain primary responsibility for ensuring that our schools remain safe 
places for students and teachers.
    In addition, the Title IV-A program is poorly structured to provide 
meaningful support to LEAs because it provides allocations of less than 
$30,000 to an estimated two-thirds of LEAs and less than $10,000 for 
one-third of LEAs. Small allocations, combined with the wide range of 
allowable activities under Title IV-A, make this program an inefficient 
vehicle for supporting school safety. The proposed $100 million School 
Safety State Grants program would overcome these limitations by 
delivering meaningful State-level grants--nearly twice the amount of 
State-level funding provided by Title IV-A--targeted solely to 
supporting State and local efforts to improve school climate and 
safety.
reducing funding for adult education programs in context of shortage of 
                             skilled labor
    Question. I was disappointed to see that the Department's budget 
proposal included a $156 million (24 percent) cut to adult education 
programs, which provide education and literacy assistance to low 
skilled Americans, enabling them to acquire foundational reading, math, 
and English skills, as well as career readiness skills for employment 
or transition to advanced postsecondary education. According to the 
Bureau of Labor Statistics, we have 7.6 million open jobs, but our 
workforce does not have the skills to fill many of them. Adult 
Education is a central component of increasing the skills of our 
workforce, as over 1.5 million Americans annually participate in adult 
education to improve their literacy and work skills offered at the 
local level through public schools, community colleges, libraries, and 
community-based organizations. Can you tell me how cutting nearly one-
quarter of adult education funding will improve the education and 
skills of our workforce, as well as meet employers' needs for skilled 
workers?
    Answer. The Administration's proposed decrease to Adult Education 
State Grants primarily reflects the need for fiscal discipline while 
supporting the President's goal of directing a greater share of 
existing discretionary funding toward national security and public 
safety. In addition, the effectiveness of the program as implemented 
following its reauthorization by the Workforce Innovation and 
Opportunity Act (WIOA) remains unclear, and the Administration believes 
it makes sense to redirect a portion of the proposed reduction in 
funding for Adult Education State Grants to support pre-apprenticeship 
programs. This $60 million initiative under Adult Education National 
Leadership Activities would allow States to create pre-apprenticeship 
programs that increase the number of adults who are able to meet the 
basic entrance requirements of apprenticeship programs. The 
Department's budget also supports workforce development through $1.3 
billion in Career and Technical Education funding.
    request for documentation of communications regarding employee 
                               bargaining
    Question. Last September, I requested all communications since 
January of 2017 between yourself, members of your senior staff and any 
officials representing the Department in bargaining, and any 
individuals not employed by the Department that relate to bargaining 
with Department employees--and have yet to receive the requested 
communications. I restate that request here and ask you to give me a 
date on which I will receive all such communications.
    Answer. With regard to communications with outside entities that 
relate to the collective bargaining process, although there have been 
communications with the FMCS and the Federal Service Impasse Panel 
during the bargaining process, those communications capture sensitive 
pre-decisional discussions involving internal management deliberations 
and guidance connected to the ongoing dispute before the FLRA 
referenced above. The Department declines to provide those 
communications while the dispute is still pending before the FLRA.
    data and tools to evaluate educational programs and credentials
    Question. We know that students, workers, veterans, employers and 
others face a very confusing and opaque marketplace of programs and 
credentials. In fact, there are currently nearly 750,000 credentials 
available in the U.S. alone. Your department houses and shares data on 
many, but not all, those programs and credentials, and oversees laws 
and programs affecting more of the market. It's important to share 
information about these offerings--such as their cost, quality 
controls, pathways, and outcomes--with the public. It's also important 
that individuals are able to easily search across different types of 
credentials--such as certificates, certifications, licenses, 
apprenticeships, and degrees--make meaningful comparisons, and reach 
fully informed decisions. Can I ask for your support in taking steps to 
make all data about credentials both public and fully comparable, and 
to work to support the development of tools and apps that put such 
information in the hands of students, parents, employers, and others?
    Answer. The Department strives to promote student achievement and 
preparation for global competitiveness, including highlighting multiple 
pathways toward competitiveness in the 21st century. However, the 
Department's required data collection is currently limited to Title IV 
participating programs and does not include collecting data about 
certifications. In fact, IPEDS specifically instructs institutions to 
NOT report information about certifications since these are not well-
defined and many are not the subject of accreditor review and approval. 
In March 2019, the College Scorecard updated its homepage to include a 
link to the Department of Labor's apprenticeship finder tool so that 
students considering college options would also be made aware of 
apprenticeship options. In addition, by the end of 2019, the Department 
will also begin providing preliminary program-level loan debt and 
earnings data among recipients of Title IV aid for all Title IV 
participating programs at the certificate, baccalaureate, graduate and 
professional degree level.
                 title i performance reports under essa
    Question. Recently, the Department released fiscal year 2018 Title 
I performance reports for six States, including Alaska, Arizona, 
Illinois, Louisiana, New Mexico, and Texas. The reports cited each of 
these States as needing to take immediate action to address 
``significant compliance and quality concerns'' related to ESSA 
implementation. These reports highlight ongoing concerns I have with 
the implementation of the Every Student Succeeds Act (ESSA) and States' 
compliance with the myriad of requirements in the law. Each State was 
given 30 days to provide evidence to the Department to resolve these 
issues, and three States were required to submit amendments to their 
approved ESSA plans.
    Has the Department received the requested evidence from each of 
these States, and were any necessary amendments and assurances to the 
State plans also submitted?
    Answer. The Department has received additional documentation from 
each State that has received a final report and continues to work 
closely with each State to resolve the outstanding issues. In some 
cases, this documentation has included amendments to State plans; these 
amendments are currently under Department review.
    Question. What steps will the Department take to ensure these 
States come into full compliance? What additional monitoring will the 
Department conduct in States cited for ``significant compliance and 
quality concerns'' in the coming year?
    Answer. The Department will continue to work with each State until 
all issues are fully resolved. This starts with the State providing a 
response within 30 days of receiving the report and may include an 
iterative process of reviewing State submissions and asking for 
clarification or additional information as needed. The Department will 
continue to communicate with each State and provide technical 
assistance, as needed, until all monitoring findings are resolved. In 
addition, conditions on grant awards or other actions are sometimes 
used to account for long-standing issues identified in monitoring 
findings. The number of conditions from recent monitoring events, the 
time since the previous monitoring event, and any conditions on grant 
awards are all risk factors that are included when the Department is 
determining future monitoring and compliance activities.
    Question. How will the Department make the amendments and 
assurances to these States plans transparent to Congress and the 
public?
    Answer. The Department posts each approved amendment on its web 
site at https://www2.ed.gov/admins/lead/account/stateplan17/
statesubmission.html. In addition, the Department posts all monitoring 
reports since 2006 for Titles I, II, and III. They can be found at: 
https://www2.ed.gov/admins/lead/account/performance/index.html.
    Question. If the States cited in these monitoring reports do not 
submit sufficient evidence, what additional steps will be taken by the 
Department to ensure these States come into compliance with the law?
    Answer. The Department works with States in the event that a State 
does not meet the timeline established for resolving a monitoring 
finding or submits insufficient or incomplete information, including 
offering technical assistance if needed. The Department may take 
further action as appropriate in a given situation, including increased 
monitoring, placing a condition on a grant, placing a grant or an 
entire entity on ``high-risk'' status, entering into a compliance 
agreement, or withholding funds.
    Question. Which States, if any, received Title I monitoring visits 
from the Department in fiscal year 2018 in addition to Alaska, Arizona, 
Illinois, Louisiana, New Mexico, and Texas, and when will their 
performance reports be made publicly available?
    Answer. California, Georgia, and Michigan were also monitored for 
Title I, Part A in 2018. The Department will finalize these monitoring 
reports in the coming weeks.
                     monitoring essa implementation
    Question. Please detail the Department's plans for monitoring the 
implementation of ESSA, including:
  --a. How the Department will ensure compliance with ESSA's 
        requirements for the vast majority of States that did not 
        receive a monitoring visit in fiscal year 2018 and will not 
        receive a monitoring visit in the upcoming year;
  --b. Whether the Department will monitor each State for compliance 
        with the law, including the plan and timeline for conducting at 
        least one monitoring visit in each State;
  --c. The number of monitoring visits planned for fiscal year 2019 and 
        fiscal year 2020, which States, and what programs and 
        requirements of ESEA they will cover;
  --d. How the Department is determining which States to conduct 
        monitoring visits in, a description of any risk assessment 
        protocols used to set the schedule for monitoring visits, and 
        whether the States are selected for earlier or more frequent 
        monitoring because they have greater risk for noncompliance 
        with ESSA's requirements;
  --e. The follow up that will be done for States that the Department 
        finds do not comply with all of ESSA's requirements during the 
        monitoring visits.
    Answer.
  --a. The Department monitors grantee performance in a variety of 
        ways, including formal on-site and desk performance reviews and 
        formal assessment peer reviews. For example, over the past 3 
        years, the Department has reviewed almost all States' 
        assessment systems and is continuing to work with States as 
        they address issues identified in the peer review. The 
        Department also reviews annually the data that States submit to 
        EDFacts as part of the annual report to the Secretary required 
        by ESEA section 1111(h)(5). This data includes student outcome 
        data across ESEA programs as well as key school-level 
        performance metrics such as school status (e.g., comprehensive 
        support and improvement, additional targeted support) and 
        performance on accountability indicators. The Department also 
        reviews all proposed amendments to a State's consolidated State 
        plan to ensure compliance with the statute.
  --b. The Department intends to monitor each State, though it has not 
        yet developed a specific plan and timeline for each ESEA 
        program for future years.
  --c. In fall 2019 , the Department will conduct two on-site 
        monitoring visits that will include a review of Title I, Part 
        A; Title II, Part A; and Title III, Part A. For Title I, Part 
        A, the Department has been phasing in the ESEA components over 
        the past 3 years. Each year, the Department has piloted a 
        component of its protocol, made changes based on the pilot, and 
        finalized that component of the protocol before using it in the 
        subsequent year. The first phase focused on fiscal 
        requirements--both financial cross-cutting requirements across 
        ESEA programs and Title I, Part A programmatic fiscal 
        requirements; the second phase added in data quality, report 
        cards, accountability, and school improvement; and this year 
        the Department will pilot the remaining programmatic components 
        of Title I, Part A along with the programmatic requirements for 
        Title II, Part A and Title III, Part A. The Department has not 
        yet completed its monitoring plans for fiscal year 2020.
  --d. The Department conducts an annual risk assessment, using a tool 
        developed by its Office of Grants Administration (formerly 
        called the Risk Management Service), and documents and closes 
        out instances of noncompliance through written correspondence 
        with grantees following on-site and desk reviews. The 
        assessment looks at program, entity, and grant award risk. 
        Program risk refers to the program design, such as whether the 
        program relies on self-reported child counts and how the person 
        responsible for such counts is impacted by the grant status. 
        Program risk applies across all grantees and helps the 
        Department prioritize which programs to monitor. The entity 
        risk component reviews administrative (i.e., high-risk status, 
        noncompliance, staff inexperience), financial (i.e., credit-
        worthiness, past use of the Department's grant system G5), and 
        internal controls (i.e., audit findings and resolution) risks 
        of an SEA. Grant award risk assesses results, quality, 
        compliance, and financial domains for individual grant awards. 
        This process is used to identify potential areas of concern and 
        helps OESE program offices determine if (1) grantees have 
        ongoing issues with program implementation, (2) those ongoing 
        issues could result in noncompliance, and (3) new areas of 
        concern merit attention.
  --e. The Department follows up with States on all issues identified 
        through monitoring that require State action. The Department 
        notifies the State of such issues through a monitoring exit 
        call, the monitoring report, regular follow-up, and, as needed, 
        technical assistance. If such Department support and oversight 
        does not lead to a State resolving the issue, the Department 
        may take further action as appropriate in a given situation; 
        such actions may include increased monitoring, placing a 
        condition on a grant, placing a grant or an entire entity on 
        ``high-risk'' status, entering into a compliance agreement, or 
        withholding program funds.
    oversight to ensure schools with underperforming subgroups are 
                    identified for targeted support
    Question. The Every Student Succeeds Act contains numerous Federal 
requirements to ensure that all students have the opportunity to 
receive a high quality education no matter where they live, how much 
their parents make, or how they learn. Two of these core Federal 
requirements require States to identify schools for comprehensive 
support and improvement (CSI), targeted support and improvement (TSI), 
and additional targeted supports (ATS). The law also requires States to 
include subgroups in their systems of annual meaningful differentiation 
(AMD). There are States complying with these requirements and States 
that are not. For the States that are not in full compliance with the 
law, what oversight is the Department conducting to ensure that schools 
with consistently underperforming subgroups are included in States 
systems of AMD and identified for targeted support as required under 
the law?
    Answer. The Department is not aware of any State plans that do not 
use subgroup performance to identify schools that need targeted support 
and improvement based on having one or more ``consistently 
underperforming'' subgroups (as defined by the State) or schools that 
need additional targeted support. Although the Department expects that 
all States are implementing their approved State plans, in the rare 
case in which a State's implementation of its accountability system 
varies from an approved plan, the Department will take appropriate 
enforcement action.
  bureau of indian education negotiated rulemaking and title i funding
    Question. Section 8204(c)(1) of the Elementary Student Succeeds Act 
(ESSA) requires the Secretary of the Interior to undertake a negotiated 
rulemaking to develop and implement a new standards, assessments, and 
accountability system consistent with Section 1111 of ESSA Title I, 
Part A for the Bureau of Indian Education (BIE) funded schools no later 
than school year (SY) 2017-2018. According to information contained in 
both a flier obtained by Politico advertising a ``Tribal consultation'' 
on April 22, 2018 (April flyer) and a November 22, 2018, letter from 
the Department to BIE (November letter), the Department granted the 
Department of the Interior (DOI) a 1 year extension to complete the 
negotiated rulemaking process before the start of SY2018-2019. The 
April flyer notes that DOI failed to meet this new deadline associated 
with the SY2018-2019 extension and, as a result, your Department 
withheld approximately $1.6 million in ESSA Title I funding from the 
BIE. On August 2, 2018, DOI published a notice in the Federal Registrar 
announcing the establishment of the BIE Standards, Assessments, and 
Accountability System Negotiated Rulemaking Committee (NRM Committee). 
The BIE NRM Committee met four times between September 25, 2018, and 
March 14, 2019.The November 2018 letter does not offer any information 
on the final determination of the Department regarding the use of the 
withheld Title I funding. Additionally, it notes the Department granted 
DOI an additional ESSA Section 8204(c)(1) compliance extension to 
SY2019-2020 but expressed concerns that DOI will be unable to implement 
a final regulation before this new deadline. The November letter 
subsequently sets out a number of required actions related to ESSA 
Section 8204(c)(1) progress reporting that DOI had to submit by January 
7, 2019--a date that fell within the partial Federal Government 
shutdown that resulted in the furlough of the majority of DOI 
employees.
    Under what legal authority did the Department grant DOI the SY2018-
2019 and SY2019-2020 extensions of ESSA's Sec. 8204 requirements 
referenced in the April flyer and November letter?
    Answer. Section 8204(c)(1) of the Elementary and Secondary 
Education Act, as amended (ESEA), requires BIE to use a negotiated 
rulemaking (NRM) process to develop regulations to define the 
standards, assessment, and an accountability system consistent with 
section 1111 of the ESEA for the schools funded by the BIE for 
implementation no later than the 2017-2018 school year (SY). Using the 
Department's orderly transition authority in Section 4(b) of the Every 
Student Succeeds Act (ESSA) and using the authority in section 
8204(a)(2) for the two agencies to enter an agreement on the 
distribution and use of ESEA funds that the Department provides to BIE, 
the Department extended the preexisting Memorandum of Agreement (MOA) 
between the two agencies. The MOA extension, which was agreed to and 
signed by both agencies on July 7, 2017, granted BIE an extension of 
the negotiated rulemaking timeline, requiring BIE to complete NRM in 
time for new regulations to be effective for SY 2018-2019. Further, the 
Department's expectation was that the additional year would be a 
sufficient amount of time to allow BIE to finish NRM, establish final 
rules governing its system, and operationalize its system by the 
beginning of SY 2018-2019. Because BIE did not comply with that 
timeline, BIE remains out of compliance with the statutory requirements 
and has violated the terms of the MOA. In our November 2018 letter sent 
to BIE, the Department made it clear that BIE failed to implement its 
ESSA compliant system in SY 2018-2019 and required specific actions 
towards implementation with additional deadlines to show progress.
    Question. Has the Department used that same authority (or an 
alternate authority) to grant additional ESSA Sec. 8204 compliance 
extensions or exceptions to DOI?
    Answer. No. The Department has not granted any further extensions 
to BIE. Since BIE failed to establish its new system within the 
timeframe stipulated in the July 2017 MOA, BIE remains out of 
compliance with the statutory requirements. As noted above, the 
November 2018 letter imposes additional action steps.
    Question. What did the Department do with the $1.6 million in Title 
I administrative funding withheld from BIE for failure to meet the 
deadlines associated with the SY2018-2019 extension?
    Answer. In April 2018 the Department engaged in Tribal consultation 
on how to direct the use of the withheld funds; it received testimony 
and written comments from Tribes and other stakeholders, which it 
considered before it made a determination to restore 50 percent of the 
withheld funds to BIE. In addition to comments asking to restore the 
withheld funds, numerous comments supported directing BIE to use these 
funds to complete the NRM in a timely manner. Subsequently, in a letter 
to DOI on July 3, 2018, the Department notified DOI of its intent to 
restore 50 percent of BIE's State administrative portion of Title I, 
Part A funds that were previously withheld so that BIE could continue 
its NRM work. To receive the remaining portion of the withheld funds, 
BIE was required to complete four items: (1) provide the Department an 
updated timeline of the negotiated rulemaking process, including the 
date by when the final regulations will be in place to ensure they will 
be implemented by the beginning of the 2019-20 SY; (2) publish the 
dates for the negotiated rulemaking sessions in the Federal register; 
(3) provide the Department with copies of the white papers supporting 
the negotiated rulemaking process that had already been completed for 
BIE; and, (4) meet with the Department to provide an update regarding 
BIE's plans for conducting the rulemaking process. BIE subsequently 
satisfied all four conditions and on August 28, 2018, the Department 
restored the remaining withheld funds to BIE. BIE completed its NRM in 
March 2019 (later than previously scheduled) and has not yet published 
its notice of proposed rulemaking. As a result, BIE will not meet its 
obligation to establish rules for standards, assessments, and 
accountability in SY 2018-2019, as previously agreed upon.
    Question. Has the Department opted to withhold any additional Title 
I funding from the BIE due to failure to comply with ESSA?
    Answer. At this point, the Department has not initiated any further 
withholding of BIE's State administrative portion of Title I, Part A 
funds.
    Question. Did the Department participate in or offer technical 
assistance at the BIE NRM Committee's meetings?
    Answer. Yes. Department staff from Department program and legal 
offices provided extensive technical assistance to BIE and DOI staff 
leading up to each of the four NRM committee meetings held in 2018 and 
2019. In addition, Department staff attended BIE's four NRM committee 
meetings and provided technical assistance to BIE and the committee 
upon request. Further, BIE accessed Department-funded technical 
assistance from the Comprehensive Centers throughout this process.
    Question. Did the Department receive responses from DOI to the 
required action items with a January, 7, 2019, deadline contained in 
the November letter? If not, did the Department provide DOI with an 
extension on these items as a result of DOI's inclusion in the partial 
government shutdown?
    Answer. No. The Department did not receive any of the items 
identified in the November 28, 2018 letter by the established deadline 
of January 7, 2019, as requested; nor did it receive the items that had 
a February 1, 2019 deadline. On January 15, 2019, DOI's Assistant 
Secretary, Tara Sweeney, issued a letter to the Department's Assistant 
Secretary, Frank Brogan, stating that BIE would provide a plan and 
timeline for its implementation of its ESSA compliant system once the 
negotiated rulemaking timeline was complete and consultation had 
concluded. During the regular bi-monthly meeting on February 26, 2019, 
BIE provided a timeline addressing the negotiated rulemaking process 
only, showing that consultation was scheduled to be completed in May 
2019, an NPRM would be published early June 2019, and the final rule in 
early September 2019. This, however, did not address the implementation 
timeline required by the January 7, 2019 deadline. During the same 
February meeting, BIE also requested additional time until after it 
concluded its fourth and final NRM session in March 2019 to provide the 
Department with an implementation timeline. Note that the NRM was 
originally supposed to have only three sessions and conclude in 
December 2018, but BIE added a fourth session, which was then impacted 
by the government shutdown, and did not occur until March 2019. The 
January 15, 2019 DOI letter also stated that BIE would work towards 
providing the other items ``to the extent possible pending 
implementation of its accountability system and will notify ED in 
advance if it needed additional time or support be needed.'' The 
Department has not yet received any of the requested information.
    Question. Has the Department communicated with DOI about this 
matter since the conclusion of the final BIE NRM Committee meeting on 
March 14, 2019? If so, please provide a summary of those 
interdepartmental communications.
    Answer. Yes. The Department followed up with the BIE Director, Tony 
Dearman, and DOI's Deputy Assistant Secretary, Mark Cruz, on April 4, 
2019, to inquire when BIE could reasonably provide the timeline that it 
indicated it would provide following the conclusion of its fourth NRM 
session in March 2019. BIE responded that it would be providing this 
information along with the additional deliverables in the near future 
but did not provide a specific date it would make this information 
available to the Department. In addition, on April 29, 2019, the two 
agencies held a meeting at which BIE indicated that it will need until 
May 31, 2019 to provide the timeline that was due to the agency on 
January 7, 2019. BIE also provided general updates on its progress 
towards completing other action items that were previously due by 
January 7 and February 1, 2019, and the Department indicated that a 
follow-up meeting between the two agencies should occur to discuss the 
items in detail.
  education freedom scholarships and resource allocation for private 
                         versus private schools
    Question. You have stated that your proposed Education Freedom 
Scholarship program ``won't take a single cent from local public school 
teachers or public school students.'' Yet, this proposed program would 
create a $5 billion annual Federal tax credit. These are dollars that 
could be spent on increase resources to our public school students 
through Title I or IDEA, for example.
    How is your proposal not a shift of resources from public schools 
to private schools?
    Answer. The Education Freedom Scholarship proposal would create a 
$5 billion annual Federal tax credit, encouraging voluntary donations 
to scholarships for elementary and secondary students. Those 
scholarships can be used to support students in a variety of public and 
private settings, as determined by States. The voluntary donations do 
not shift Federal resources from public schools or teachers.
      education freedom scholarships and federal civil rights laws
    Question. Does the Department of Education intend for participating 
private schools under the proposed Education Freedom Scholarship 
program to adhere to Federal civil rights laws that protect all 
students, and if not, which laws or regulations (including 
nondiscrimination statutes) does the Department of Education intend to 
waive for private schools that could participate in this proposed 
program?
    Answer. States, not the Federal Government, will determine which 
education providers can receive scholarships under the Education 
Freedom Scholarship proposal. States may include private schools in 
their local programs, but they are not obliged to. The Department will 
continue to enforce all applicable civil rights laws for all private 
and public schools. If the Education Freedom Scholarship program is 
enacted, the Department will not--and cannot--waive any existing civil 
rights laws.
  stakeholders involved in federal commission on school safety final 
                                 report
    Question. What individuals and organizations consulted in the 
development of the recommendations included in the Final Report of the 
Federal Commission on School Safety, published on December 18, 2018? 
Please provide a complete list.
    Answer. Students, teachers, parents, administrators, school safety 
personnel, mental health professionals, and others with an interest in 
school safety provided vital input into the Commission's work including 
various school safety recommendations. Transcripts and other documents 
showing the names of individuals, organizations, and their 
recommendations (to the extent they so-included any), may be found at 
the Commission's web page at https://www.ed.gov/school-safety.
    Personnel from the Departments of Education, Justice, Health and 
Human Services, and Homeland Security assisted the Commission in the 
development of the recommendations included in the Final Report. 
Officers and staff from the Department of Education who assisted in the 
development of the recommendations included: Secretary Betsy DeVos, 
Deputy Secretary Mick Zais, Assistant Secretary of Elementary and 
Secondary Education Frank Brogan, Kent Talbert, Meredith Miller, Ashley 
Briggs, Nate Bailey, Josh Venable, Jessika Ramakis, Victoria Hammer, 
Erica Lee, Paul Kesner, Rita Foy Moss, Jean Morrow, Chris Rinkus, Bill 
Cordes, Larry Cohen, Vanessa Tesoriero, Michael Hawes, Dennis Koeppel, 
Maureen Dowling, Brian Thompson, Thomas Wheeler, Venitia Richardson, 
William Trachman, and Joe Conaty.
    You may wish to contact the other departments for their personnel.
 rescission of disclipline guidance, recommendation to arm personnel, 
           and efforts to promote positive school environment
    Question. In December 2018, the Department of Education rescinded a 
2014 guidance regarding how States and local educational agencies 
should comply with Federal civil rights laws in regards to school 
discipline. At the same time, the Federal Commission of School Safety 
issued a report which recommended school districts arm ``some specially 
selected and trained school personnel'' and increase police presence on 
school grounds. Reports and research often shows that arming school 
personnel and increasing police presence on campus disproportionately 
and negatively impacts students of color and students with 
disabilities. What actions will the Department take to help States and 
school districts create positive school environments for these students 
and prevent these negative impacts from the rescission of the 2014 
guidance?
    Answer. On April 10, 2019, the Department announced the release of 
the ``Parent and Educator Guide to School Climate Resources'' (Guide). 
This action fulfilled one of the recommendations of the Federal 
Commission on School Safety. The Guide, produced jointly by the 
Department's Office of Elementary and Secondary Education and Office 
for Special Education and Rehabilitative Services, provides best 
practices and includes resources that school leaders and teachers can 
use as they work to achieve a positive school climate, lower 
disciplinary issues and enhance school safety.
    Arranged in a Question and Answer format and available on the 
Department's website, https://www2.ed.gov/policy/elsec/leg/essa/
essaguidetoschoolclimate041019
.pdf, the Guide provides parents and educators with useful 
decisionmaking frameworks and implementation tools, as well as best 
practices that school leaders can consider as they work to foster 
positive and inclusive learning environments. Examples from schools 
across the country are included to illustrate the various interventions 
communities are employing to enhance student behavior and achievement. 
With recent research highlighting the importance of evaluating school 
climate through a range of indicators, the Guide provides diagnostic 
tools whereby educators may collect and use data to drive their climate 
improvement strategies.
    Additionally, the Parent and Educator Guide to School Climate 
Resources provides information to teachers and school leaders on how 
they can receive support from the Department's two key technical 
assistance centers dedicated to promoting safe and supportive schools. 
These centers are the National Center of Safe and Supportive Learning 
Environments (https://safesupportivelearning.ed.gov), and the Technical 
Assistance Center on Positive Behavioral Interventions and Supports 
(www.pbis.org). The Guide includes an appendix of additional resources.
 basis for requesting increased funds for charter schools and plans to 
                           address challenges
    Question. The Department of Education requests an increase for the 
Charter School Program, following media reports that the Department has 
been unable to disburse all appropriated funding in fiscal year 2019 
due to lack of applicants. Why did the Department request such a 
sizeable increase in the program when it has not been able to spend 
down the funds in this program and how does the Department intend to 
run any future competitions to address longstanding challenges in the 
charter sector, including in serving students of color and students 
with disabilities?
    Answer. The challenge faced by the Department in awarding the full 
fiscal year 2019 appropriation for the Charter Schools Program (CSP) is 
largely due to a couple of large States delaying their applications for 
State Entity grants while constraints in the appropriations language 
currently prevent the Department from reallocating funds for State 
Entity grants to areas within the CSP with greater demand. If Congress 
provides the requested flexibility to redistribute fiscal year 2019 
funds to other CSP authorities, including the CSP facilities programs, 
the Department will be able to award all fiscal year 2019 CSP 
appropriations. In fiscal year 2020, the Department anticipates that 
demand for State Entity grants will return to prior-year levels, but it 
is important to recognize that the Administration's request includes 
the needed flexibility to direct CSP funds to areas of growing demand, 
such as facilities grants, thus helping to ensure that the Department 
will be able to award the full $500 million proposed in the request. 
Finally, in conducting CSP competitions, the Department will continue 
to ensure that funds support only schools that comply with the IDEA and 
Federal civil rights laws, consistent with the program statute's 
definition of ``charter school.'' Additionally, the Parent and Educator 
Guide to School Climate Resources provides information to teachers and 
school leaders on how they can receive support from the Department's 
two key technical assistance centers dedicated to promoting safe and 
supportive schools. These centers are the National Center of Safe and 
Supportive Learning Environments (https://
safesupportivelearning.ed.gov), and the Technical Assistance Center on 
Positive Behavioral Interventions and Supports (www.pbis.org). The 
Guide includes an appendix of additional resources.
         resources required to address borrower defense backlog
    Question. Has the Department conducted any analysis of the 
resources, including staff full-time equivalencies and any contract 
funding necessary to clear the backlog of pending borrower defense 
claims, now totaling at least 158,000 from the end of quarter 4 of 
2018? If so, please describe how such analysis was conducted and the 
principal findings of such analysis, including staffing or contracting 
resources that could be utilized or necessary.
    Answer. Yes. The Department recently completed a preliminary 
estimate of the full-time and contractor resources needed to eliminate 
or substantially reduce the number of pending borrower defense 
applications. The process included a review of adjudication work flows, 
as well as platform capabilities and required updates. Additionally, 
the Department considered potential efficiencies that could be 
incorporated into the process to reduce the time that borrower defense 
applications remain pending. Among the principal findings was the 
conclusion that existing staff and contractors are insufficient to 
address the existing applications and, therefore, the Department is in 
the process of adding full-time and contractor resources. The 
Department also found that various technology updates are needed to 
adjudicate applications efficiently. Those updates will be implemented 
over the next year. Even as staffing adjustments are made, however, the 
backlog will continue due to our inability to move forward with making 
determinations of damages since the methodology developed by the 
Department to conduct this analysis is the subject of a court appeal.
 effect of partial relief methodology on previously approved borrower 
                          defense applications
    Question. How many borrower defense applications have previously 
been designated approved, but have not yet been formally discharged due 
to the partial relief methodology announced December 21, 2017?
    Answer. Approximately 23,900.
     resources required to issue partial versus full discharge for 
           previously approved borrower defense applications
    Question. What resources, including staff full-time equivalencies 
and any contract funding, does the Department estimate are necessary to 
provide partial relief to borrowers who attended Corinthian Colleges, 
Inc. who would otherwise have been eligible for full relief prior the 
partial relief or discharge formula announced December 21, 2017?
    Answer. The Department is considering alternative relief 
methodologies, and when one is selected, the Department will be able to 
fully assess the data and personnel needed to implement that 
methodology.
             borrower defense claims by category and state
    Question. How many borrower defense claims on or after January 20, 
2017 has the Department has received, approved, and are pending, 
disaggregated by each status and by State.
    Answer. Please see the attached three tables providing the number 
of pending (Table A), received (Table B), and approved (Table C) 
borrower defense claims disaggregated by State.






                 borrower defense approvals by quarter
    Question. How many borrower defense claims were approved:
  --a. In the first quarter of 2017
  --b. In the second quarter of 2017
  --c. In the third quarter of 2017
  --d. In the fourth quarter of 2017
  --e. In the first quarter of 2018
  --f. In the second quarter of 2018
    Answer. Borrower defense claim approval numbers by quarter:
  --15,900 borrower defense claims were approved in the first quarter 
        of 2017.
  --No borrower defense claims approved in the second and third 
        quarters of 2017.
  --410 borrower defense claims were approved in the fourth quarter of 
        2017.
  --5,345 borrower defense claims were approved in the first quarter of 
        2018.
  --10,401 borrower defense claims were approved in the second quarter 
        of 2018.
  full versus partial relief borrower defense approvals and discharges
    Question. How many unique borrowers with borrower defense claims:
  --a. were identified for partial relief or discharge formula 
        (announced December 21, 2017) who have received such partial 
        relief or discharge
  --b. were identified for partial relief or discharge formula 
        (announced December 21, 2017) who have not yet received such 
        partial relief or discharge
  --c. were identified for partial relief or discharge formula 
        (announced December 21, 2017) who had previously been 
        identified for full relief prior to January 20, 2017
  --d. identified for full relief or discharge who have received such 
        discharge since January 20, 2017
  --e. were identified for full relief or discharge who have not yet 
        received such discharge since January 20, 2017
    Answer.
  --a. Of the 16,151 total applications that have been identified for 
        borrower defense relief under the tiered relief methodology, 
        15,026 applications received less than 100-percent discharge 
        under the tiered relief methodology.
  --b. All 15,026 applications that received less than 100-percent 
        discharge under the tiered relief methodology have received 
        relief.
  --c. There are no applications that were identified for full relief 
        that received tiered relief.
  --d. Of the 16,151 total applications that have been identified for 
        borrower defense relief under the tiered relief methodology, 
        1,125 applications received 100-percent discharge under the 
        tiered relief methodology after January 20, 2017.
  --e. All 1,125 applications identified for 100-percent discharge 
        under the tiered relief methodology after January 20, 2017 have 
        received relief.
claims from institutions with high volumes of pending borrower defense 
                                 claims
    Question. How many unique borrowers have filed claims from 
institutions which currently have 1,000 or 500 or more pending claims, 
respectively, including the total number of pending claims for each 
institution?
    Answer. Attached is a validated spreadsheet containing a table of 
institutions that currently have 500 or more pending applications 
including the total number of pending applications for each 
institution. 




            school groups with most borrower defense claims
    Question. Please provide a list of the 20 school groups (such as a 
parent company or controlling institution) that have received the most 
borrower defense claims, including the total number of claims received, 
the total number of claims pending, the total number of claims 
approved, and the percentage of all pending borrower defense claims for 
each school group.
    Answer. Attached is a validated spreadsheet containing a table of 
borrower defense applications by school group with data as of December 
31, 2018, which also aligns with the timeframe from the most recently 
available Borrower Defense report. The table shows the number of 
applications approved by school group, the number of applications 
received by school group, and the percentage of applications received 
that are still pending by school group. The number of pending 
applications by school group cannot be provided because small cell 
sizes carry the risk of privacy disclosure.


  recent activity on borrower defense approvals, denials, and findings
    Question. As of March 28, 2019, when was the last time the 
Department:
  --a. approved a borrower defense claim?
  --b. denied a borrower defense claim?
  --c. developed any findings related to borrower defense claims?
    Answer.
  --a. The last time a borrower defense application was approved was 
        June 12, 2018.
  --b. The last time a borrower defense application was denied was May 
        24, 2018. However, the Department has decided to move forward 
        with processing denials while awaiting the court's decisions 
        regarding the methodology to be used for partial relief. Once 
        the Department determines an alternate relief methodology, 
        approved applications processing will begin immediately. 
        Additionally, the Department is completing updates to the new 
        customer engagement platform, which will bring the platform 
        fully into compliance with the 2016 borrower defense 
        regulations and allow the Department to resume processing 
        application denials.
  --c. The Department has identified no facts relevant to the review of 
        Corinthian Colleges claims, other than the admissions made by 
        Heald College regarding placement rate falsifications, and has 
        instead relied on the allegations of the California Attorney 
        General and other AGs to adjudicate claims. The Department has 
        similarly made no findings of fraud regarding ITT Tech, which 
        is why from the start the Department recommended to ITT Tech 
        students that they pursue closed school loan forgiveness rather 
        than borrower defense to repayment relief. However, as claims 
        are reviewed they may contain information that leads to new 
        findings.
              staff allocated to borrower defense activity
    Question. How many full-time equivalent positions with the primary 
job function or responsibility of reviewing, or providing analysis of, 
borrower clams, including attorneys or advisors:
  --Were filled with active employees as of January 19, 2017
  --Have become vacant since January 20, 2017
  --Have been listed with a vacancy announcement by the Department 
        since January 20, 2017
  --Have been hired by the Department since January 20, 2017
  --Are employed as of the date of the response to this inquiry
    Answer. As of January 19, 2017, there were 11 employees in the 
Borrower Defense Group. Since January 20, 2017, four of those employees 
voluntarily separated from the Department. As of March 31, 2019, seven 
employees remain in the Borrower Defense Group, which includes six 
full-time employees and one part-time employee. Since January 20, 2017, 
no additional employees have been hired in the Borrower Defense Group. 
The Department currently is preparing announcements to fill the vacant 
positions.
   department relationship with consumer financial protection bureau
    Question. Has there been any change in the Department's 
relationship with any Federal agencies, including the Consumer 
Financial Protection Bureau (CFPB), since January 20, 2017 regarding 
the review of borrower defense claims or development of evidence to 
support the processing of claims? If so, please describe the nature of 
the change(s) in the relationship(s).
    Answer. In August of 2017, the Department terminated the memorandum 
of understanding (MOU) with the CFPB because the CFPB had not been 
abiding by the terms set forth in the MOU. The CFPB has not formally 
attempted to reestablish an MOU with the Department, under 12 U.S.C. 
5535, since the previous MOU was terminated.
          extent of autonomy afforded to borrower defense unit
    Question. Is the Borrower Defense unit at Federal Student Aid 
empowered to make decisions about whether a borrower qualifies for 
borrower defense without authorization from senior political 
appointees? If not, please describe the specific approvals from the 
rest of Federal Student Aid or the Department that are required.
    Answer. The Borrower Defense group, under the leadership of a 
Department Official, determines whether a borrower's application is 
approved and, therefore, whether the borrower is eligible for relief. 
The amount of relief to be provided is also determined by the 
Department Official based on the methodology developed by the 
Department and approved by the Department Official. Senior Department 
officials may be consulted regarding relief approaches and decisions 
for approved applications.
         automatic closed school discharges since november 2013
    Question. How many borrowers, disaggregated by institution and 
year, have received automatic closed school discharges after attending 
an institution that closed on or after November 1, 2013. Where 
information at the 8-digit OPEID level would result in fewer than 10 
borrowers, please roll up such numbers into the 6-digit OPEID level. 
Please do not disaggregate by institution those institutions with fewer 
than 10 borrowers with discharged loans at either OPEID level to avoid 
inadvertent disclosure of personally identifiable information (PII).
    Answer. See the attached spreadsheet with data as of April 29, 
2019.








   borrowers and outstanding loan volume eligible for closed school 
                               discharge
    Question. Please provide, disaggregated for each of the following 
school groups, the number of borrowers and the total estimated balance 
of outstanding loans whom the Department estimates are eligible for the 
applicable closed school discharge window (either 120 days or as 
extended due to extenuating circumstances) and the number of borrowers 
and the total amount that has already been discharged through closed 
school discharge applications:
  --a. ITT Educational Services, Inc.
  --b. Charlotte School of Law
  --c. Education Corporation of America
  --d. Vatterott Colleges
  --e. Dream Center Education Holdings
    Answer. As of May 16, 2019.

----------------------------------------------------------------------------------------------------------------
                                                                       Total
                                                                     estimated
                                                     Number of      balance of
                                                  borrowers that    outstanding      Number of     Total amount
                                                  the Department  loans that the  borrowers that      already
                   INSTITUTION                     estimates are     Department     received a      discharged
                                                   eligible for    estimates are       CSLD        through CSLD
                                                  the applicable   eligible for
                                                    CSLD window   the applicable
                                                                    CSLD window
----------------------------------------------------------------------------------------------------------------
ITT Educational Services........................          52,211    $832,862,264          17,982    $254,364,233
Charlotte School of Law.........................             139     $10,698,705              65      $5,031,154
Education Corporation of America................          20,750    $185,735,350           3,364     $22,621,331
Vatterott Colleges..............................           2,312     $32,892,819             435      $5,111,043
Dream Center Education Holdings.................          14,652    $600,328,700             417     $10,586,895
----------------------------------------------------------------------------------------------------------------

  determining appropriate extension of closed school discharge window
    Question. What steps is the Department taking to determine the 
appropriate extensions of the 120-day window for closed school 
discharges for students who attended Education Corporation of America, 
Vatterott Colleges, or Dream Center Education Holdings owned schools, 
respectively, given the reported financial difficulties and 
accreditation challenges that faced these colleges well in advance of 
their closures?
    Answer. The Secretary has not issued a decision on whether to 
extend the date for determining eligibility for a closed school loan 
discharge under 34 C.F.R. Sec. 685.214(c)(l)(i)(B) due to exceptional 
circumstances. If the Secretary does not exercise her authority to 
extend the eligibility window, an institution's last full day of 
educational instruction is the date utilized to determine potential 
eligibility for closed school loan discharges.
program review and school oversight changes required to implement 2016 
                      borrower defense regulations
    Question. How will the program review process, and any other FSA 
school oversight functions, be modified to implement the 2016 borrower 
defense regulations?
    Answer. The Department issued an Electronic Announcement on March 
15, 2019 that provided information to institutions about how they must 
comply with the 2016 borrower defense regulations. The Department is 
also working to publish a final, revised borrower defense regulation.
   timeline to finalize changes required to implement 2016 borrower 
                          defense regulations
    Question. What is the Department's expected timeline to finalize 
any changes to FSA's oversight functions to implement the 2016 borrower 
defense regulations?
    Answer. The Department is working diligently to implement the 2016 
borrower defense regulations and issued an Electronic Announcement on 
March 15, 2019 to provide additional information to institutions on how 
to comply with the regulation. The Department is currently using manual 
data extraction techniques to identify borrowers who are eligible for 
Automatic Closed School Loan Discharge and is working to develop an 
automated system to identify eligible borrowers in the future.
  financial triggering events and repayment rate disclosures for 2016 
                      borrower defense regulations
    Question. Please provide the following information regarding 
financial triggering events and repayment rate disclosures under the 
2016 borrower defense regulations:
  --a. What steps has the Department taken to recalculate financial 
        responsibility composite scores for institutions that have 
        reported triggering events?
  --b. What actions will the Department take to integrate financial 
        responsibility triggering events, or the subsequent 
        recalculation of the composite score, if institutions do not 
        report the events to the Department?
  --c. How does the Department plan to address instances when reporting 
        is not conducted, and does the Department plan to announce any 
        policy or procedure to address non-reporting?
  --d. Are institutions able to submit alternative forms of surety, in 
        place of a letter of credit, and does the Department plan to 
        announce any policy or procedure for alternative surety?
  --e. What is the Department's expected timeline to select a vendor to 
        conduct consumer testing for repayment rate disclosures and 
        financial responsibility triggering events, and to begin and 
        complete such consumer testing?
  --f. What is the Department's timeline to publish in the Federal 
        Register the required trigger events and the format by which 
        repayment rates must be disclosed?
  --g. Has the Department set aside any resources to pursue further 
        investigation, enforcement action, or review of Program 
        Participation Agreements when it is notified of triggering 
        events such as borrower defense-related lawsuits and 
        accrediting agency actions against an institution?
    Answer.
  --a. On March 15, 2019, the Department published an Electronic 
        Announcement at ifap.ed.gov/eannouncements/
        030719GuidConcernProv2016BorrowerDefenseto
        RypmtRegs.html that provides information for institutions about 
        how to report financial triggering events. While no composite 
        scores have been recalculated to date, the Department is 
        prepared to do so if or when the need arises.
  --b. When an institution fails to report information that it is 
        required to report under the revised financial responsibility 
        regulations, the Department will, as part of its oversight 
        responsibilities, take action to bring the school back into 
        compliance with those regulations, recalculate the composite 
        score (as appropriate), and request a letter of credit, if 
        needed. In addition, the Department will determine whether any 
        fine or other similar action is appropriate.
  --c. If a school fails to report a financial triggering event, the 
        Department will determine whether any fine or other similar 
        action is appropriate. The Department does not comment on 
        deliberative, preliminary, or ongoing investigative work, 
        including the enforcement of the Title IV regulations.
  --d. As of May 6, 2019, the Department has not announced whether 
        institutions are able to submit alternative forms of surety in 
        place of a letter of credit. If the Department chooses to 
        accept alternative forms of surety in place of a letter of 
        credit, the Department would need to publish that decision in a 
        Federal Register notice. The Department would provide the 
        appropriate policy or procedure for alternative surety in an 
        Electronic Announcement or another appropriate communication 
        posted on the Information for Financial Aid Professional (IFAP) 
        online portal.
  --e. The Department is in the final stages of selecting a vendor to 
        conduct consumer testing and anticipates being able to conduct 
        user testing for repayment rate disclosures and financial 
        responsibility triggering events in the summer of 2019.
  --f. The Department anticipates publishing a Federal Register notice 
        detailing the required triggering events and the format by 
        which repayment rates must be disclosed by the end of Calendar 
        Year 2019.
  --g. It is Department policy to not comment on any deliberative, 
        preliminary, or ongoing investigative work, including 
        disclosing departmental resources to enforce the Title IV 
        regulations.
 omitted discussion of accounting standards in electronic announcement
    Question. The Department's electronic announcement did not address 
the updates to accounting standards 2016-14 and 2016-02.
    With respect to accounting standards update 2016-14, when does the 
Department expect the eZ-Audit System to be updated to include the new 
classes of net assets?
    Answer. The Department is currently modifying the eZ-Audit System 
to reflect the changes noted in the Accounting Standards Update (ASU) 
2016--14. The system modifications will include the new classes of net 
assets.
    Question. With respect to accounting standards update 2016-02, when 
does the Department expect to complete and publish the Business Impact 
Analysis detailing the Department's implementation requirements for the 
part of the ASU 2016-02 update that becomes effective for fiscal years 
after December 15, 2018?
    Answer. The Department is working on internal guidance regarding 
the ASU 2016--02 update and currently does not have a timeline for when 
it expects to complete the Business Impact Analysis detailing the 
Department's implementation of the ASU 2016--02 requirements.
            discharges under total and permanent disability
    Question. Please provide the most recent data available on the 
total number of borrowers discharged under total and permanent 
disability (TPD). Within this update please include:
  --a. Number of SSA (SSI/SSDI) matched borrowers and total amount 
        discharged;
  --b. Number of Veterans Affairs matched borrowers and total amount 
        discharged;
  --c. Number of borrowers who matched either SSA or VA databases who 
        are subject to types of forced collections, disaggregated by 
        type (i.e. Tax Refund Offset, Treasury Offset Program, 
        Administrative Wage Garnishment, etc.), and including the 
        number of borrowers who are subject to multiple types of forced 
        collections;
  --d. Number of borrowers have had judgments entered against them 
        (including those entered prior to TPD eligibility). Of those 
        judgments, if any, the number of those still in effect;
  --e. The number of borrowers in each State who have received a match 
        notification and received discharge, separately, for SSA TPD 
        borrowers;
  --f. The number of borrowers in each State who have received a match 
        notification and received discharge, separately, for VA TPD 
        borrowers.
    Answer. Please see the enclosed spreadsheet.
    
    
    
    
    
    
    
    
    
    
    
    
  institutions and number of automatic closed school loan discharges 
                under 2016 borrower defense regulations
    Question. Please provide a list of institutions that have generated 
automatic closed school discharge per the 2016 borrower defense 
regulations (34 CFR 685.214(c) (Direct Loan Program), 34 CFR 
682.402(d)(8)(ii) (FFEL Program), and 34 CFR 674.33(g)(ii) (Perkins 
Loan Program)), the number of automatic closed school discharges at 
each institution granted to date, and the number of students that were 
in attendance at each institution at the time of closure. Where 
information at the 8-digit OPEID level would result in fewer than 10 
borrowers, please roll up such numbers into the 6-digit OPEID level.
    Answer. A list of institutions that have generated automatic closed 
school discharge per the 2016 borrower defense regulations (34 CFR 
685.214(c) (Direct Loan Program), 34 CFR 682.402(d)(8)(ii) (FFEL 
Program), and 34 CFR 674.33(g)(ii) (Perkins Loan Program)) and the 
number of automatic closed school discharges at each institution 
granted as of April 30, 2019, are provided in the attached spreadsheet. 
There is one summary line for ``All Others'' at the bottom of the 
spreadsheet documenting the total count for all schools with fewer than 
10 borrowers that received discharges.
    The number of students attending each institution at the time of 
closure is provided in the attached spreadsheet. The schools with less 
than 10 borrowers that received discharges are displayed in the list 
with the indication ``<10.''






















    * Student count only includes students who have at some point 
received Title IV 
aid, they did not need to receive that aid at the listed school.








number of applications received for traditional closed school discharge
    Question. How many individual applications has the Department 
received for traditional (not automatic) closed school discharge on or 
after January 20, 2017, disaggregated by State and by claim status 
(i.e. received, pending, and approved).
    Answer. Please see the attached spreadsheet.
    
    
    
    
state-by-state breakdown of public service loan forgiveness employment 
                             certification
    Question. Please provide a State-by-State breakdown of PSLF 
Employment Certification Forms (ECFs), including the unique number of 
borrowers who have any approved, have any denied ECF, and the 
cumulative number who have submitted any ECF.
    Answer. Please find the requested data enclosed.
    
    
    
    
      state-by-state breakdown of public service loan forgiveness 
                      applications for forgiveness
    Question. Please provide a State-by-State breakdown of the number 
of PSLF Applications for Forgiveness received, approved and denied. 
Please provide this information for both the number of unique borrowers 
as well as the total number of applications.
    Answer. Please find the requested data attached.
    
    
    
    
  state-by-state breakdown of temporary expanded public service loan 
                        forgiveness applications
    Question. Please provide a State-by-State breakdown of the number 
of TEPSLF applications (via emails sent to [email protected]) 
received, approved and denied. Please provide this information for both 
the number of unique borrowers as well as the total number of 
applications.
    Answer. Please find the requested data attached.
    
    
    
    
paperwork on file for borrowers rejected for temporary expanded public 
                        service loan forgiveness
    Question. In its March 25, 2019 response to Senator Kaine, the 
Department indicated that 28,640 of the 38,460 requests (74.4 percent) 
to the TEPSLF email address were from borrowers without a PSLF 
Application for Forgiveness on file. As a result, these applicants were 
not processed for further review. How many of these individuals without 
a PSLF Application for Forgiveness had at least one Employment 
Certification on File? Please provide the current information and as of 
March 25, 2019 (for the 28,640 individuals specified).
    Answer. These data currently are not available. Borrowers submit 
TEPSLF requests via email and are required to include their name and 
date of birth as identifiers. To reduce the risk of disclosure of 
personally identifiable information, borrowers are asked not to provide 
a Social Security number. The name and date of birth identifiers do not 
allow FSA to reliably identify the full population of borrowers who 
previously have submitted one or more Employment Certification Form. We 
expect the Next Gen FSA initiative to greatly improve our TEPSLF and 
PSLF reporting capabilities.
              acics outcomes data for accredited colleges
    Question. Please provide an updated ACICS outcomes data file as of 
April 5, 2019 that shows for all ACICS-accredited colleges:
  --a. the date of a school's site visit, if any;
  --b. the date that a school's application to a prospective accreditor 
        was denied, if applicable;
  --c. the date that a school's application to a prospective accreditor 
        was withdrawn, if applicable;
  --d. the compliance status of each institution with the terms of the 
        Program Participation Agreement (PPA) in control as of April 5, 
        2019;
  --e. the status of any colleges deemed non-compliant with their PPA 
        terms, including provisions are they non-compliant with and 
        corresponding consequences;
  --f. for any closed or announced to be closed institutions, 
        information on the schools' plan for closing and teach-out 
        agreements;
  --g. a summary of any revisions to the PPA made for each school after 
        June 2018.
    Answer. Unfortunately, the Department cannot provide the 
information requested in the first three points above. Because 
accreditors are not required to provide information on schools that may 
be in the accreditation process--only those that are accredited--the 
Department does not have data for schools that have not yet been 
accredited. Already accredited schools must typically seek permission 
from the Department to change institutional accreditors, and in these 
cases, the Department would have related data available. However, the 
Department requires no such permission for institutions if their 
existing accreditor's recognition is withdrawn because the Department 
presumes affected schools will seek accreditation elsewhere. As such, 
the Department would not have the requested information for ACICS 
schools.
    Please see the enclosed spreadsheet for information responsive to 
the last four bullet points. The Department provided the spreadsheet to 
the Committee.
    The first tab titled ``ACICS Schools as of Apr. 2019'' identifies 
the 49 institutions or OPEIDs that identified ACICS as their primary 
institutional accreditor in the U.S. Department of Education's 
Postsecondary Education Participants System (PEPS) as of April 5, 2019.
    Please note that while there are 49 institutions that continue to 
identify ACICS as their primary accreditor, the eight institutions 
shaded in pink have a pending Application for Approval to Participate 
in Federal Student Financial Aid Programs (eApp) in process, which 
would update their primary accreditor in PEPS. The prospective new 
institutional accreditor is identified in Column Q titled ``Name of New 
Accreditor Obtained (per School eApp).''
    The compliance status of each institution is listed in the first 
tab under column N titled ``Non-Compliant with Sanctions.'' As noted in 
this column, all 49 institutions are deemed compliant with the terms 
and conditions of their Program Participation Agreement (PPA) in effect 
as of April 5, 2019.
    For the 49 institutions noted in the first tab, ``ACICS Schools as 
of April 2019'', 21 had a new or revised PPA rendered after June 2018 
as noted under column J titled ``Revision to PPA After June 2018.'' The 
certification status for each institution is noted in column K titled 
``Certification Status.'' Additionally, the date in which the revised 
PPA was executed (as applicable) by the Department is identified in 
column L titled ``PPA Execution Date.'' Lastly, a summary of any 
provisional certification conditions for institutions whose PPA had 
been revised after June 2018 and were in effect as of April 2019 are 
listed under column M titled ``Provisional Certification Conditions.''
    Since the closures of the main locations of Education Corporation 
of America owned institutions in December 2018, there have not been 
further known closures of ACICS accredited institutions.
    When an institution announces a planned closure, they are required 
to submit a teach-out plan to their respective accrediting agency. 
These teach-out plans are not required to be submitted to the 
Department for approval. 34 CFR Sec. 602.3 defines teach-out plans, 
teach-out agreements, and the requirements accrediting agencies must 
enforce under the Higher Education Act (HEA).
    ACICS was the accrediting agency for nearly all ECA institutions. 
ACICS notified the Department that ECA had submitted the required 
teach-out plans. Attached is a summary of teach-out plan information 
that ECA submitted to ACICS in November 27, 2018, in response to 
ACICS's show-cause notice. The Department subsequently requested that 
ECA also share this summary with ED. The Department provided this 
information to the Committee. Columns A through C indicate the ECA-
brand campus, program, and degree level. The remaining columns provide 
information regarding similar programs that were identified at other 
nearby institutions. Specifically, Columns D through G identify ground-
based campuses, while Columns H and I identify institutions offering a 
comparable program and degree level online.
    However, for copies of teach-out plans and fully executed teach-out 
agreements (where applicable and consummated), please direct this 
request to ACICS. Under the HEA, the accreditor is the legal entity for 
receipt and approval of such documents.
  planned follow-up on senior department official recommendations for 
                                 acics
    Question. In the Senior Department Official's October 2018 response 
regarding the recognition of ACICS, the SDO recommended the Secretary 
give ACICS 12 months to submit a compliance report regarding the two 
areas the SDO found ACICS to have not demonstrated full compliance 
(conflicts of interest and competency of representatives), including 
how ACICS has made progress to ensure its Ethics Review Board will 
allow it to be in compliance with those two criteria. In particular, 
the SDO also recommended that ACICS be required to provide evidence 
that it requires its IRC members to sign conflicts of interest 
attestations. The SDO also recommended that ACICS provide additional 
evidence responding to whether existing evaluators have received the 
additional training and answer questions regarding the qualifications 
of the Data Integrity Reviewer. Please provide a detailed explanation 
regarding when exactly ACICS is expected to submit those reports, who 
at the Department will review the report, the 12-month date upon which 
ACICS will be reviewed to see if it demonstrates compliance with all 
accreditation criteria, and the actions available to the Secretary on 
that 12-month date.
    Answer. The Secretary's decision included two areas of 
noncompliance--602.15(a)(2) and 602.15(a)(6)--that require a compliance 
report within 12 months. The Accreditation Group (AG), within the 
Office of Postsecondary Education, will process that compliance report 
per 602.32. The compliance report will be due November 21, 2019, and 
will be presented at the summer 2020 NACIQI meeting. The monitoring 
report addressing the issues below will also be due at the same time as 
the compliance report, but it will be separate and independent of the 
compliance report. The monitoring report will be reviewed by AG staff.
    Monitoring areas:
  --602.15(a)(1)--Audited financial records and a staffing report 
        (Note: the audited financial records are required to be 
        submitted annually for 3 years.)
  --602.16(a)(1)(i)--An annual report on the function and effectiveness 
        of ACICS' Placement Verification Program (PVP).
  --602.16(a)(1)(vii)--An annual report on the work of ACICS' At Risk 
        Institutions Group (ARIG) and actions taken by the agency, if 
        any.
  --602.19(b)--An annual report on the work of ACICS' At Risk 
        Institutions Group (ARIG) and actions taken by the agency, if 
        any.
                      data on closed school groups
    Question. For Education Corporation of America, Vatterott Colleges, 
and Dream Center Education Holdings, respectively, please provide the 
following information disaggregated by each school group:
  --a. How many students were enrolled in colleges owned by each school 
        group at the time their colleges closed?
  --b. How many students who attended colleges owned by each school 
        group have applied for closed school discharge?
    --i. How many of those applications have been granted?
    --ii. What is the total outstanding debt of the students that have 
            submitted applications and how much of it has been 
            discharged?
  --c. How many students attending colleges owned by each school group 
        have applied for borrower defense?
    --i. How many of those applications have been granted?
    --ii. What is the total outstanding debt of the students that have 
            submitted applications?
  --d. When was the last date that any colleges owned by each school 
        group recorded admitting students?
  --e. How many of the students enrolled at colleges owned by each 
        school group have since transferred to new schools?
    --i. Of these, how many students transferred to another for-profit 
            college?
  --f. Did the Department hold any financial surety, such as a letter 
        of credit, from each school group at the time that it closed?
    --i. If yes, what was the amount held at the time that closed?
    --ii. Did the Department release any funds from surety back to the 
            company within 1 year prior to closure? If yes, please 
            provide a detailed timeline of when the Department released 
            the funds, how much, to whom, and under what conditions.
    Answer.
  --a. Please refer to the following table.

------------------------------------------------------------------------
                                                            Number of
                                                            Actively
                     School Group                           Enrolled
                                                         Students at the
                                                         Time of Closure
------------------------------------------------------------------------
Dream Center Education Holdings.......................             9,609
Education Corporation of America......................            20,585
Vatterott Acquisition Co..............................             2,149
------------------------------------------------------------------------

  --b. See the attached spreadsheet with data as of May 6, 2019.


  --c. Enclosed is a validated spreadsheet containing the number of 
        borrower defense applications, approvals, and outstanding 
        student debt for Education Corporation of America, Vatterott 
        Colleges, and Dream Center Education Holdings.
        
        
  --d. The Department's systems do not capture such enrollment 
        information, and because the schools are now closed, the 
        information cannot be obtained from the institutions.
  --e. Please refer to the below table.

------------------------------------------------------------------------
                                                            Number of
                                                             Student
                     School Group                       Transfers  Since
                                                             Closure
------------------------------------------------------------------------
Dream Center Education Holdings.......................                92
Education Corporation of America......................             1,149
Vatterott Acquisition Co..............................                67
------------------------------------------------------------------------

  --f. At the time of the respective school group closures, the 
        Department held financial surety for Dream Center Education 
        Holdings (DCEH) and Vatterott Acquisition Co. schools.

    The Department held no financial surety when most of the Education 
        Corporation of America (ECA) schools closed in December 2018. 
        The Department placed all ECA institutions on the Heightened 
        Cash Monitoring 2 Method of Payment on November 8, 2018, and 
        requested surety on November 14, 2018. ECA was required to 
        remit a letter of credit (LOC) to the Department in the minimum 
        amount of $63,940,069. ECA closed most of its locations before 
        providing the required surety amount. However, on March 26, 
        2019, the Department received an LOC of $1,036,521 for New 
        England College of Business and Finance--the only remaining 
        operational Title IV participating institution owned by ECA--
        which it continues to hold.
  --f. i. On March 8, 2019, the Department held--and it continues to 
        hold--more than $24.5 million in surety funds for DCEH 
        institutions.

    The Education Principle Foundation (EPF) acquired some Art 
        Institutes and South University from DCEH on January 7, 2019. 
        The Department reallocated $28,500,000 of the available DCEH 
        surety funds into different holding accounts to cover financial 
        risks for the EPF institutions on February 11, 2019.

    On Dec. 17, 2018, 14 Vatterott locations closed precipitously. At 
        the time of these closures, the Department held--and it 
        continues to hold--nearly $13 million in surety funds from 
        Vatterott.
  --f. ii. Yes, in the case of DCEH schools. During the period from 
        August 28, 2018 through December 31, 2018, the Department made 
        seven disbursements totaling $39,586,990 from the LOC proceeds 
        to DCEH. See the response directly above for the conditions 
        justifying the release of funds to DCEH.

    Disbursements of LOC proceeds were made to DCEH as follows:

------------------------------------------------------------------------
                                                          Disbursement
            Disbursement Date (MM/DD/CCYY)                   Amount
------------------------------------------------------------------------
08/28/2018............................................       $10,000,000
09/21/2018............................................        $4,361,704
10/12/2018............................................        $4,000,000
10/23/2018............................................        $4,000,000
11/28/2018............................................        $4,000,000
12/18/2018............................................        $9,225,286
12/31/2018............................................        $4,000,000
  Total...............................................       $39,586,990
------------------------------------------------------------------------

         service level accountability mechanisms under nextgen
    Question. What specific mechanisms will be included in the NextGen 
servicing system to hold vendors or contractors accountable to a 
specific level of service?
    Answer. Section C.3.2 of the Next Gen FSA Business Process 
Operations (BPO) solicitation, enclosed, requires that successful 
offerors include performance management mechanisms in their proposed 
solutions to enable improved and ongoing achievement of metrics. 
Pursuant to the solicitation, BPO vendors will be measured monthly to 
determine their level of performance. `Green' vendors will keep their 
assigned customers and will also be assigned an equitable share of new 
customers. `Yellow' vendors will keep their assigned customers but will 
not receive new customers. If a vendor remains Yellow for more than 6 
months, their contract may be terminated. If a vendor is `Red' for two 
consecutive months, a portion of their assigned customers will be 
reallocated to other vendors. If a vendor is Red for three consecutive 
months, their contract may be terminated. https://beta.sam.gov/opp/
7ba2975c522413b564f21f854e0d94f1/view.
                planned compliance measures for nextgen
    Question. Please provide an explanation of the specific steps the 
Department will take to ensure NextGen offerors' compliance with 
requirements, including, for each component of NextGen:
  --a. a detailed description of how the Department will assess 
        offerors' history of compliance with consumer protection laws, 
        regulations, agency guidelines, and court mandates prior to 
        awarding Federal contracts;
  --b. a detailed description of how the Department intends to monitor 
        offeror compliance with consumer protection laws, regulations, 
        and agency guidelines; and
  --c. a detailed description of how the Department intends to enforce 
        offeror compliance with consumer protection laws, regulations, 
        and agency guidelines including in what circumstances the 
        Department will withhold access to contract payments, or use 
        other sanctions, in instances of noncompliance.
    Answer.
  --a. Next Gen FSA offerors are required to submit their record of 
        adhering to consumer protection laws and regulations by 
        detailing relevant legal proceedings and other matters as part 
        of their past performance submission. The submitted information 
        will be evaluated by FSA. Additionally, the Contracting Officer 
        will consider information obtained from any other sources, in 
        accordance with Federal Acquisitions Regulation (FAR) Subpart 
        15.305(a)(2).
  --b. Once each Next Gen FSA vendor receives an award, FSA intends to 
        compile a list of all requirements (including applicable laws, 
        regulations, and guidelines) each vendor will be required to 
        meet. A contract monitoring plan will be established, which 
        will detail how each of these requirements will be monitored 
        for compliance, how frequently each item will be reviewed, and 
        the evidence that will be required to substantiate the vendor's 
        compliance. FSA will review all evidence and will track and 
        report on the results of each vendor's performance in 
        accordance with the monitoring plan. Any vendor not performing 
        adequately based on the results of the contract monitoring plan 
        will be subject to penalties as defined in the contractual 
        agreement between FSA and the vendor.
  --c. Section C.3.2 of the Next Gen FSA Business Process Operations 
        (BPO) solicitation, enclosed, requires that successful offerors 
        include performance management mechanisms in their proposed 
        solutions to enable improved and ongoing achievement of 
        metrics. Pursuant to the solicitation, BPO vendors will be 
        measured monthly to determine their level of performance. 
        `Green' vendors will keep their assigned customers and will 
        also be assigned an equitable share of new customers. `Yellow' 
        vendors will keep their assigned customers but will not receive 
        new customers. If a vendor remains Yellow for more than 6 
        months, their contract may be terminated. If a vendor is `Red' 
        for two consecutive months, a portion of their assigned 
        customers will be reallocated to other vendors. If a vendor is 
        Red for three consecutive months, their contract may be 
        terminated. https://beta.sam.gov/opp/
        7ba2975c522413b564f21f854e0d94f1/view.
 federal student aid bonuses or special compensation and connection to 
                           borrower outcomes
    Question. Please explain, in detail, how FSA executives or senior 
managers earn bonuses or special compensation, and how the level of 
bonus connects to agency goals around improving borrower outcomes? 
Provide the names, duties, position descriptions, bonus amounts, etc. 
for the past three fiscal years for all FSA employees who received such 
bonuses or special compensation.
    Answer. Federal Student Aid's (FSA) authority under the 
Performance-Based Organization legislation allows eligible senior 
managers to receive a bonus up to 25 percent of their annual salary 
based on an evaluation of their performance in relation to the goals in 
their performance agreement. Each employee's performance agreement--
including senior managers--is linked to FSA's 5-year Strategic Plan for 
fiscal years 2015--2019, which is aligned to the Department's strategic 
objectives. Senior managers with performance ratings of High Results 
Achieved or Exceptional Results Achieved are eligible for performance-
based awards. The FSA chief operating officer determines the bonus for 
each senior manager. In accordance with Department policy, awards 
exceeding $10,000 require approval from the Secretary of Education. The 
attached report includes bonus information for FSA executives and 
senior managers for fiscal years 2016--2018.






   memorandum of understanding between ombudsman offices at federal 
          student aid and consumer financial protection bureau
    Question. Does the Department maintain a memorandum of 
understanding (MOU) between its own ombudsman and the student loan 
ombudsman at the Consumer Financial Protection Bureau, as required by 
12 U.S. Code Sec. 5535 ``to ensure coordination in providing assistance 
to and serving borrowers seeking to resolve complaints related to their 
private education or Federal student loans''? If not, why not, and when 
will the Department reestablish this MOU?
    Answer. In August of 2017, the Department terminated the memorandum 
of understanding (MOU) with the CFPB because the agency had not been 
abiding by the terms set forth in the MOU. The CFPB has not formally 
attempted to reestablish an MOU with the Department, under 12 U.S.C. 
5535, since the previous MOU was terminated.
 securities and exchange commission jurisdiction over federal student 
                                 loans
    Question. Do you acknowledge that the Securities and Exchange 
Commission has some jurisdiction and oversight authority over Federal 
student loans?
    Answer. The Department of Education does not generally opine on the 
jurisdiction or oversight authority of other Federal agencies.
federal deposit insurance corporation jurisdiction over federal student 
                                 loans
    Question. Do you acknowledge that the Federal Deposit Insurance 
Corporation has some jurisdiction and oversight authority over Federal 
student loans?
    Answer. The Department of Education does not generally opine on the 
jurisdiction or oversight authority of other Federal agencies.
     department of justice jurisdiction over federal student loans
    Question. Do you acknowledge that the U.S. Department of Justice 
has some jurisdiction and oversight authority over Federal student 
loans?
    Answer. The Department of Education does not generally opine on the 
jurisdiction or oversight authority of other Federal agencies.
consumer financial protection bureau jurisdiction over federal student 
                                 loans
    Question. Do you acknowledge that the Consumer Financial Protection 
Bureau has some jurisdiction and oversight authority over Federal 
student loans?
    Answer. The Department of Education does not generally opine on the 
jurisdiction or oversight authority of other Federal agencies.
     incorporating nextgen oversight in federal student aid annual 
              performance report and personnel evaluations
    Question. How will elements of oversight incorporated into the Next 
Generation Financial Services Environment, including but not limited to 
compliance, be incorporated into individual FSA employee personnel 
evaluations and in the FSA's annual performance report?
    Answer. Vendor and partner performance standards and accountability 
measures--such as publicly available metrics around service quality 
with corresponding disincentives up to and including termination--will 
be built into Next Gen FSA contracts to ensure our customers receive 
world-class service while protecting taxpayer dollars. Additionally, 
the Department's new borrower interface will request feedback from 
borrowers--for example, via surveys after phone, mobile, and online 
experiences and as part of focus groups--throughout the servicing 
process. FSA's performance plan will include metrics specifically tied 
to Next Gen objectives, such as improved customer service and better 
outcomes for borrowers and taxpayers. Employee performance plans will 
continue to include elements and goals that are set to achieving 
organizational objectives.
 consumer financial protection bureau complaints and servicer oversight
    Question. How does the Department incorporate complaints submitted 
to the Consumer Financial Protection Bureau into its oversight of its 
contracted student loan servicers, and how has this process changed 
over time?
    Answer. In the Department's Memoranda of Understanding (MOU) with 
the Consumer Financial Protection Bureau (CFPB), the CFPB agreed to 
direct to the Department all complaints related to Federal student 
loans within 10 days of receipt. The CFPB ceased sending these 
complaints to the Department, which was a primary reason the Department 
terminated its two MOUs with the CFPB in August 2017.
department response to servicer engagement in unfair, deceptive acts or 
                               practices
    Question. What actions does the Department take if and when it 
learns a student loan servicer is violating Federal unfair, deceptive, 
acts, or practices (UDAP) provisions of the Dodd--Frank Wall Street 
Reform and Consumer Protection Act?
    Answer. If the Department determines a vendor is in violation of 
UDAP, the Department may exercise a combination of actions, including 
but not limited to: making the customer whole, imposing financial 
penalties for improper servicing, reducing or eliminating customer 
allocations, or terminating the contract.
                per-borrower cost of private collections
    Question. What is the per-borrower cost of using private collection 
agencies, including collection costs paid by borrowers, and how does 
that compare to the per-borrower cost of the Federal student loan 
servicing companies?
    Answer. The model used to compensate private collection agencies 
(PCAs) contracted with the Department is different than the model used 
to compensate contracted Federal student loan servicers. While 
servicers are paid a flat, monthly fee per borrower regardless of that 
borrower's activities, PCAs--by contrast--earn a commission on payments 
received and a flat fee for other types of account resolution, chiefly 
loan rehabilitation.
    While an account is assigned to a PCA for collection activity, the 
Department pays the default servicer a monthly fee for maintaining that 
account on the Debt Management and Collections System (DMCS), the 
system of record for the default portfolio. In fiscal year 2018, the 
Department paid the default servicer $0.97 per month per borrower to 
service defaulted borrower accounts, for a total payment of $83.7 
million. Unlike the default servicer, a PCA only earns fees on assigned 
accounts when a borrower makes payments or otherwise resolves the 
account. In fiscal year 2018, the Department paid contracted PCAs a 
total of $793 million in fees.
    Not all borrowers in default are placed with a PCA. Borrowers have 
65 days to enter into a repayment arrangement after being assigned to 
DMCS; if borrowers do so and continue making payments, the borrowers' 
account is not assigned to a PCA, and the borrowers are never charged 
collection costs.
       per-borrower cost of collections for borrowers in default
    Question. What is the average amount of collection costs paid by 
borrowers in default? Please express this amount both in dollars and as 
a percentage of the principal balance of a loan.
    Answer. Collection costs are charged as follows:
  --Only defaulted borrowers assigned to a PCA are charged collection 
        costs when they make a voluntary or administrative wage 
        garnishment (AWG) payment. If a borrower's account is not with 
        a PCA, no collection costs are charged when voluntary or AWG 
        payments are made.
  --Borrowers who consolidate their defaulted loans with the assistance 
        of a PCA are charged collection costs that are capitalized into 
        the new principal balance of the consolidation loan.
  --There are no collection costs charged on Treasury Offset Program 
        (TOP) payments. However, the Department does charge the 
        borrower a fee equal to the servicing fee that Treasury charges 
        the Department to process the offset payment ($17.25 for most 
        offsets in fiscal year 2018).
    In fiscal year 2018, the Department assessed approximately $264 
million in collection costs against borrowers making voluntary or AWG 
payments while being serviced by a PCA. The total number of borrowers 
in the default portfolio at the end of fiscal year 2018 was 7.4 
million, and the average defaulted borrower paid $36 in collection 
costs in fiscal year 2018. The total principal balance of the default 
portfolio at the end of fiscal year 2018 was $111.8 billion, and the 
average defaulted borrower paid collection costs equal to 0.24 percent 
of their principal balance.
       cost of collections versus cost of income-driven repayment
    Question. How does the typical amount paid in collections compare 
to what that same borrower would have paid on an income-driven 
repayment plan?
    Answer. Below is a breakout of the average annual amount paid in 
collections for Non-IDR borrowers vs. IDR borrowers.
            Non-IDR Borrowers
    Population: Student borrowers having open, defaulted Direct Loans 
in fiscal year 2018.
    Source: CEAD STAB, which is a 4 percent sample of the National 
Student Loan Data System (NSLDS) used for modeling and analysis.
    Amount: Fiscal year 2018 recoveries (including principal, interest, 
fees, and Treasury offsets) collected on the loans described above.
    Statistics: There were an estimated 5.3 million borrowers in the 
population having defaulted loans in fiscal year 2018. Approximately 67 
percent of borrowers had no recoveries on their defaulted loans in 
fiscal year 2018. Of the 33 percent who had recoveries in fiscal year 
2018, the median amount recovered in fiscal year 2018 was $798. The 
average annual amount recovered across all borrowers with defaulted 
loans (including those with no recoveries) is $559.
            IDR Borrowers
    Population: Because various IDR plans apply to different types of 
loans, for comparability purposes, the population assessed includes 
those in the REPAYE plan, which limits the sample to borrowers with 
Direct Loans only. Population includes REPAYE borrowers whose most 
recent record shows a scheduled payment date within fiscal year 2018.
    Source: NSLDS LOAN--RPMT--PLAN table.
    Amount: Annual total of scheduled monthly payments by borrower.
    Statistics: Total borrowers in this population equal 2.48 million. 
Approximately 54 percent of borrowers have $0 scheduled payment. Of the 
46 percent of borrowers who do not have $0 scheduled payment, the 
median payment is $1,596. The average annual payments across all 
borrowers is $1,092.
                handbook for private collection agencies
    Question. Can you please provide a full copy of the handbook for 
private collection agencies, including the compensation terms?
    Answer. A redacted version of the PCA Procedures Manual for Private 
Collection Agencies Contracted by Federal Student Aid is enclosed. The 
redacted information in this version of the manual includes information 
drafted under the guidance of Department attorneys pertaining to 
litigation procedures and is, therefore, classified as Attorney-Work 
Product. PCA employee names have also been redacted.
    The Committee has received the PCA Procedures Manual as requested.
    PCA compensation varies depending on the type of collection. 
Vendors receive:
  --A fixed fee of $1,741 for each borrower who completes a loan 
        rehabilitation (note, however, that this fee is capped at the 
        balance being rehabilitated;
  --A fixed fee of $150 for completing administrative activities, such 
        as certifying that a borrower is deceased, incarcerated, or 
        eligible to have their loans discharged due to total and 
        permanent disability;
  --2.75 percent of the final pay-off value of loans consolidated out 
        of default, if the borrower establishes satisfactory repayment, 
        or a fixed $150 administrative fee for borrowers who opt to 
        repay the new consolidation loan under an income-driven 
        repayment plan; and
  --15.2 percent of amounts collected through administrative wage 
        garnishment or voluntary payments.
           median and average collection rates for borrowers
    Question. What is the median and average collection rate paid by 
borrowers? Please break this amount down by the sector attended and 
outstanding loan balance, as well as borrower characteristics including 
Pell Grant receipt and dependency status.
    Answer. The following table provides median collection rates, net 
of Contract Collection Costs (CCC), by risk category from the Student 
Loan Model. These rates represent the lifetime estimated collection 
percentage for loans in default including principal, interest, and 
fees. This is the current breakdown of the data based on the 
assumptions used to develop the President's Budget for fiscal year 
2020.

------------------------------------------------------------------------
                                          President's Budget Fiscal Year
                                             2020  Net Present Value
                                           Recovery Rates  (net of CCC)
                                        --------------------------------
                                            2018       2019       2020
                                           cohort     cohort     cohort
------------------------------------------------------------------------
Subsidized Stafford Loans
    Four-Year Program, Freshman/            82.42%     82.12%     80.27%
     Sophomore.........................
    Four-Year Program, Junior/Senior...     82.41%     82.35%     80.18%
    Two-Year Program, Non-profit.......     82.84%     82.45%     80.53%
    Proprietary........................     83.24%     82.85%     80.68%
Unsubsidized Stafford Loans
    Four-Year Program, Freshman/            82.36%     82.33%     80.18%
     Sophomore.........................
    Four-Year Program, Junior/Senior...     82.38%     83.01%     79.99%
    Graduate Program...................     79.45%     82.67%     77.11%
    Two-Year Program, Non-profit.......     82.77%     82.59%     80.45%
    Proprietary........................     83.25%     83.02%     80.70%
PLUS Loans
    Four-Year Program, Freshman/            77.29%     76.95%     75.24%
     Sophomore.........................
    Four-Year Program, Junior/Senior...     74.60%     75.07%     72.44%
    Graduate Program...................     80.26%     86.09%     78.17%
    Two-Year Program, Non-profit.......     77.00%     77.20%     74.60%
    Proprietary........................     78.47%     77.77%     76.09%
Note: 2020 Cohort does not include
 policy
------------------------------------------------------------------------

   time required to assign and transfer borrowers to debt collectors
    Question. On average, how long does it take for a borrower to be 
assigned to a debt collector, and how many times is a borrower 
transferred between debt collectors?
    Answer. At 270 days delinquent, a borrower enters technical 
default. At 360 days delinquent, the borrower is transferred from their 
servicer to the Debt Management Collections System (DMCS) for 
collections. Once the borrower is assigned to DMCS, they are not 
assigned to a PCA for at least 72 days. During this period, the 
borrower is sent a due process notice and provided an opportunity to 
enter voluntary repayment or prove the debt should not be in 
collections.
    Once a borrower is placed with a PCA, that borrower will typically 
remain with that PCA for a minimum of 1 year. A borrower generally 
remains with the PCA so long as the borrower enters into repayment or 
is otherwise working with the PCA toward resolution, or if the PCA 
initiates wage garnishment against the borrower.
      dollar and borrower volume of initiated loan rehabilitations
    Question. Please provide the total volume of initiated loan 
rehabilitations (rehabs) (in dollars and unique number of borrowers), 
including:
  --a. Total volume of initiated rehabs using income-driven rehab 
        formula (15 percent of discretionary income)
    --i. Total volume of initiated IDR rehabs with payment of $5
    --ii. Total volume of initiated IDR rehabs with payment greater 
            than $5
  --b. Total volume of initiated rehabs using 'reasonable and 
        affordable' formula
    --i. Total volume of initiated R&A rehabs with payment of $5
    --ii. Total volume of initiated R&A rehabs with payment greater 
            than $5
    Answer. We are unable to provide data on loan rehabilitations that 
were initiated but not completed. Please see the Department's response 
to the next question for completed rehabilitation information.
      dollar and borrower volume of completed loan rehabilitations
    Question. Please provide the total volume of completed rehabs (in 
dollars and unique number of borrowers), including:
  --a. Total volume of completed rehabs using income-driven rehab 
        formula (15 percent of discretionary income)
    --i. Total volume of completed IDR rehabs with payment of $5
    --ii. Total volume of completed IDR rehabs with payment greater 
            than $5
  --b. Please provide the total volume of completed rehabs using 
        'reasonable and affordable' formula, including:
    --i. Total volume of completed R&A rehabs with payment of $5
    --ii. Total volume of completed R&A rehabs with payment greater 
            than $5
    Answer. Detailed data on loan rehabilitation payment formulas is 
available at the individual borrower level but is not maintained in a 
format that allows for aggregated analysis. As a result, we are unable 
to provide the requested information. As an alternative, we do know 
that for the 349,000 borrowers who completed rehabilitation during 
fiscal year 2017, approximately 276,000 (79 percent), representing $5.5 
billion (72 percent) of volume rehabilitated, had a payment schedule 
with a required monthly amount of $5. We should note that some 
borrowers required to pay $5 per month actually make larger payments; 
the counts provided are based on the required payment amount.
     time required to take loans from initiation to completion of 
                             rehabilitation
    Question. Please provide the average number of months from rehab 
initiation to rehab completion.
    Answer. For Federal Family Education Loan (FFEL) and William D. 
Ford Federal Direct Loan (Direct Loan) program loans, the borrower must 
make nine payments in a 10-month period. For Federal Perkins Loan 
(Perkins Loan) Program loans, the borrower must make nine consecutive 
monthly payments. Most borrowers make their first payment immediately 
once counseled about the benefits of rehabilitation. Therefore, the 
most common scenario is that borrowers complete the requirements for 
rehabilitation approximately 8 months after they receive counseling 
about the program. Once the ninth payment is received, FFEL and Direct 
Loan program loans are typically transferred to a non-default servicer 
within one week. Perkins Loans are transferred to a non-default 
servicer within 1 month.
           federal expenditures on loan collection activities
    Question. How much Federal funding has been spent on Federal 
student loan collections activities in each of the last three fiscal 
years?
    Answer. Below is the Federal funding that has been spent on Federal 
student loan collections in each of the last three fiscal years:
  --Default Management Collections System
    --Fiscal Year 2018 $86,421,766.87
    --Fiscal Year 2017 $80,971,072.14
    --Fiscal Year 2016 $87,038,982.08
  --Private Collection Agencies
    --Fiscal Year 2018 $793,005,185.68
    --Fiscal Year 2017 $749,818,353.74
    --Fiscal Year 2016 $750,164,808.62
              collection volumes for closed school groups
    Question. Disaggregated by each school group, please provide the 
number of former Corinthian Colleges, Inc.; ITT Educational Services, 
Inc.; Charlotte School of Law; and Educational Corporation of America 
students in some form of debt collection (Treasury offset, wage 
garnishment, assigned to PCAs) and the total outstanding loan balance 
of borrowers in each school group.
    Answer. See chart below with data as of May 22, 2019.
    
    
            discharges under total and permanent disability
    Question. Please provide the most recent data available on the 
total number of borrowers discharged under total and permanent 
disability (TPD). Within this update please include:
  --Number of SSA (SSI/SSDI) matched borrowers and total amount 
        discharged;
  --Number of Veterans Affairs matched borrowers and total amount 
        discharged;
  --Number of borrowers who matched either SSA or VA databases who are 
        subject to types of forced collections, disaggregated by type 
        (i.e. Tax Refund Offset, Treasury Offset Program, 
        Administrative Wage Garnishment, etc.), and including the 
        number of borrowers who are subject to multiple types of forced 
        collections;
  --Number of borrowers have had judgments entered against them 
        (including those entered prior to TPD eligibility). Of those 
        judgments, if any, the number of those still in effect;
  --The number of borrowers in each State who have received a match 
        notification and received discharge, separately, for SSA TPD 
        borrowers;
  --The number of borrowers in each State who have received a match 
        notification and received discharge, separately, for VA TPD 
        borrowers.
    Answer. Please see the enclosed spreadsheet, which includes data as 
of a certain time period for each answer.


 rehabilitated loans with subsequent income-driven repayment enrollment
    Question. Please provide the volume of completed rehabs where a 
borrower has subsequently enrolled in IDR and made at least 1 monthly 
income-driven payment within 12 months of rehab (in dollars and unique 
number of borrowers), including:
  --a. the total volume of completed rehabs using income-driven rehab 
        formula (15 percent of discretionary income) where a borrower 
        has subsequently enrolled in IDR and made at least 1 monthly 
        income-driven payment within 12 months of rehab
    --i. Above, where IDR rehab payment was $5
    --ii. Above, where IDR rehab payment was greater than $5
  --b. the total volume of completed rehabs using 'reasonable and 
        affordable' formula (15 percent of discretionary income) where 
        a borrower has subsequently enrolled in IDR and made at least 1 
        monthly income-driven payment within 12 months of rehab
    --i. Above, where R&A rehab payment was $5
    --ii. Above, where R&A rehab payment was greater than $5
    Answer. Detailed data about loan rehabilitation payment formulas 
are available at the individual borrower level but are not maintained 
in a format that allows for aggregated analysis. As a result, the 
Department is unable to provide the requested information. As an 
alternative, the Department has provided the requested information by 
those who rehabilitated their federally managed loans under a payment 
schedule with a required payment amount of $5 and those who 
rehabilitated their loans under a payment schedule with a required 
payment amount greater than $5. Note that some borrowers required to 
pay $5 per month actually make larger payments; the information below 
was provided by the Title IV servicers and is based on the required 
rehabilitation payment amount.
    Approximately 48,000 borrowers, who rehabilitated $1.2 billion in 
defaulted loans in fiscal year 2017 by making nine monthly on-time 
payments with a required rehabilitation payment amount of $5 per month, 
successfully made an IDR payment within 12 months of their 
rehabilitation date. More than 10,000 borrowers, who rehabilitated $450 
million in defaulted loans in fiscal year 2017 with a required payment 
greater than $5 per month successfully made an IDR payment within 12 
months of their rehabilitation date. A successful payment includes a $0 
payment if the borrower's scheduled payment amount is $0.
    Please note that not all borrowers enter an IDR plan after 
rehabilitation.
  time required to from rehabilitation completion to successful first 
                 payment under income-driven repayment
    Question. Please provide the average number of months from rehab 
completion to first successful IDR monthly payment.
    Answer. It took approximately 8.2 months for borrowers who 
completed rehabilitation in fiscal year 2017 with scheduled rehab 
payments of $5 to make an IDR payment, while it took approximately 8.1 
months for borrowers who completed rehabilitation in fiscal year 2017 
with scheduled rehab payments greater than $5 to make an IDR payment. A 
successful payment includes a $0 payment if the borrower's scheduled 
payment amount is $0.
           enforcement actions against title iv participants
    Question. Please provide a list of all recertification denials, 
emergency actions, fine actions, suspension actions, termination 
actions, or limitation actions taken, released, or initiated by ED 
between June 2018 and April 5, 2019 relating to any participant in the 
Title IV, HEA programs (including, without limitation, institutions of 
higher education, loan servicers, and other third-party servicers).
    Answer. Please see attachment ``Enforcement Actions.''
    
    
    
    
         pell grant lifetime eligibility used restoration data
    Question. Please provide an update on Pell Grant Lifetime 
Eligibility Used (LEU) restored due to school closure, according to the 
Department's April 3, 2017 notice, Guidance on COD Processing of Pell 
Grant Restoration for Students who Attended Closed Schools, including 
total number of unduplicated students receiving restoration of Pell 
LEU, total number of institutions which those students attended, and 
total number of semesters restored.
    Answer. Federal Pell Grant Lifetime Eligibility Used (LEU) has been 
restored for 323,666 students attending 1,072 institutions. This 
equates to approximately 653,000 semesters worth of Pell Grant 
eligibility restored.
data on programs outsourcing up to 25 percent of program to ineligible 
                      institution or organization
    Question. Regulations currently require institutions to report to 
the Department any written arrangements with an ineligible institution 
or organization up to 25 percent of an institution's program. Please 
provide a list of the institutions with a written arrangement with an 
ineligible institution or organization up to 25 percent of the program, 
the name of the program, and any other information the Department has 
regarding the arrangement.
    Answer. Currently, the Department's regulations require 
institutions to report written arrangements to their accreditor when 25 
percent or more of a program is provided by an ineligible provider. 
Institutions are required to seek accreditor approval when a written 
arrangement allows an ineligible organization to deliver between 25 and 
50 percent of the program. Our current regulations do not require 
institutions to report written arrangements with an ineligible 
institution or organization (contractual agreements) up to 25 percent 
of an institution's educational program to the Department. Therefore, 
the Department is unable to provide the requested information.
 data on programs outsourcing between 25 and 50 percent of program to 
                 ineligible institution or organization
    Question. Regulations currently require institutions to receive 
accreditor approval and report to the Department any written 
arrangements with an ineligible institution or organization between 25 
and 50 percent of an institution's program. Please provide a list of 
the institutions with a written arrangement with an ineligible 
institution or organization between 25 and 50 percent of the 
institution's program, the name of the program, the name of the 
accreditor, and any other information the Department has regarding the 
arrangement.
    Answer. Currently, the Department lacks the regulatory authority to 
require institutions to report written arrangements with an ineligible 
institution or organization (contractual agreements) more than 25 
percent, but less than 50 percent of an institution's educational 
program. Although the Department currently lacks this authority, the 
Department has limited information available about institutions' 
contractual agreements with an ineligible institution or organization 
between 25 and 50 percent of the institution's program.
    Due to the significant burden involved with the collection of the 
information, review, and possible redaction of any information about 
written arrangements, the Department respectfully requests that the 
requestor's staff requests data for specific institutions. Because the 
information is limited, the Department cautions that inferences may not 
be drawn from the data. General information about written arrangements 
with contractual agreements may be found in Volume2, Chapter 2 of the 
2018-2019 Federal Student Aid Handbook.
commitment to refrain from interfering with office of inspector general 
                       investigations and reviews
    Question. Can you commit that neither you nor anyone else in the 
Department will attempt to stop, alter, or delay any investigation or 
review undertaken by the Department's Office of the Inspector General?
    Answer. The Department will comply with the Inspector General Act 
of 1978, 5 U.S.C. App. 1 et seq., as applicable.
 commitment to refrain from removing or transferring acting inspector 
         general prior to confirmation of new inspector general
    Question. Can you commit that neither you nor anyone else in the 
Department will take further steps to remove or transfer Acting 
Inspector General Sandra Bruce until a new Inspector General is 
confirmed?
    Answer. The Department will comply with the Inspector General Act 
of 1978, 5 U.S.C. App. 1 et seq., the Federal Vacancies Reform Act, 5 
U.S.C. 3345, and other relevant Federal statutes governing personnel 
matters, as appropriate.
                                 ______
                                 
            Questions Submitted by Senator Richard J. Durbin
                 dream center education holdings (dceh)
    Question. On November 16, 2017, the Higher Learning Commission 
(HLC) withdrew accreditation from the Illinois Institute of Art and Art 
Institute of Colorado campuses of Dream Center Education Holdings 
(DCEH)--transitioning them to ``candidates for accreditation''--
effective January 20, 2018. DCEH continued to represent these campuses 
as accredited by HLC to students. On August 2, 2018, David Halperin of 
the Republic Report published a report that at a meeting at Department 
headquarters a group of Department staff, led by Diane Auer Jones, told 
a delegation from DCEH, including CEO Brent Richardson, to publicly 
represent that the Illinois Institute of Art and Art Institute of 
Colorado continued to be accredited.
    On August 30, 2018, I led a group of Senators in writing to you 
about these allegations. The Department responded on December 4, 2018 
in a letter signed by Assistant Secretary for Legislation and 
Congressional Affairs Peter Oppenheim. In its response, the Department 
stated that, prior to the August 2 report, ``only two meetings between 
Department personnel and DCEH representatives occurred in regard to 
DCEH and the impending closures of many of its campuses''--one on June 
14, 2018 and the other on July 18, 2018.
    Answer. On November 16, 2017, the Higher Learning Commission (HLC) 
decided to put the Illinois Institute of Art and Art Institute of 
Colorado campuses of Dream Center Education Holdings (DCEH) on Change 
of Control Candidacy Status'' (``CCC-Status'') effective on January 20, 
2018. According to HLC's standards and policies, as well as the letter 
that HLC sent to the Department in November 2017, the agency views CCC-
Status as the equivalent of preaccredited status. Institutions that are 
in preaccredited status are eligible to participate in Federal student 
aid programs. HLC knew that the institutions were participating in 
Federal student aid programs and did not notify the Department that 
they had taken an adverse action against the institutions, which would 
have disqualified these institutions from participating in Federal 
student aid programs. It was only in the case of the Illinois Institute 
of Art and Art Institute of Colorado that HLC used a novel 
interpretation of preaccreditation as a non-accredited status, but this 
interpretation is in violation of HLC's own policies and Department 
regulations. Therefore, the Department must emphasize that is not true 
that the campuses were not accredited during this period.
    Nevertheless, the confusion about the Art Institutes' accreditation 
status caused the Department to closely review HLC's policies and 
procedures about its CCC-Status. During the course of this review, the 
Department also watched a video of a meeting with HLC site visitors, 
faculty and students at the Chicago campus. In that video the HLC site 
visitors referred to CCC-Status as some sort of technical interim phase 
as a result of the change of ownership, similar to a probation or show 
cause. Having reviewed HLC's policies and procedures, its 
communications with the Art Institutes and the site visit video, the 
Department is concerned that HLC's CCC-Status is in violation of HLC's 
own policies as well as the Department's recognition criteria because 
HLC has used the status to convert two accredited schools to non-
accredited status solely as a result of a change in ownership without 
putting them on probation or show cause, or otherwise affording them 
the due process protections of an actual adverse action.
    While HLC has every right to revoke accreditation, the agency did 
not follow the appropriate procedures to do so for the Illinois 
Institute of Art and Art Institute of Colorado. There is no provision 
in the Department's regulations for an adverse action that would revoke 
accreditation and at the same time award candidacy status. Indeed, the 
letter advising the Art Institutes of their CCC-Status refers to the 
status as a ``preaccreditation status.'' However, there is no adverse 
action that would automatically transition an accredited institution to 
a preaccredited institution rather than a non-accredited institution.
    Question. Was the topic of DCEH's HLC accreditation status 
discussed at either the June 14, 2018, or July 18, 2018, meetings? If 
so, please describe the nature of those discussions and any requests 
made by DCEH participants of the Department related to its HLC 
accreditation status, including any request for guidance or Department 
intervention with HLC.
    Answer. During the June 14, 2018 meeting, DCEH asked a question 
about the effective date of full accreditation if HLC made a positive 
decision following the upcoming site visit. Ms. Jones explained that 
HLC would determine the effective date, and that DCEH should review the 
agency's policies regarding retroactive accreditation to determine what 
that date might be. The Department also instructed DCEH to notify HLC 
immediately that they had decided to teach-out a number of campuses.
    Although a question about the institutions' current accreditation 
status was not asked during the June 14th meeting, the Department 
believed that the campuses were in an accredited status at that time, 
or the Department would not have allowed the institutions to 
participate in title IV programs. In the November 2017 letter from HLC 
to the Department, CCC-status was described as a preaccredited status. 
According to the Department's regulations, preaccreditation is an 
accredited status. The Department believed then, and continues to 
believe, that these campuses were in accredited status until their date 
of closure.
    Following the June 14th meeting, Ms. Jones expressed to Department 
staff her concern about DCEH's ability to manage a teach-out of this 
magnitude and complexity and volunteered to contact each of the 
involved accreditors, except ACICS, to discuss the teach-out and to see 
if the accreditors would be willing to work together to review the 
teach-out plan and share regular updates with the Department about that 
status of the teach-outs. Ms. Jones did not reach out to ACICS because 
during this time she was involved in the review of ACICS's Part II 
submission and did not believe that she should be in communication with 
ACICS. The other involved accreditors (WASC, Middle States, SACSOC, HLC 
and Northwest Commission) agreed that it would be best to work together 
to review and approve a ``master'' teach-out plan that was satisfactory 
to everyone. Ms. Jones then notified DCEH that the accreditors would be 
working together to review teach-out plans and provide guidance as a 
group. Once the teach-out began, Ms. Jones held bi-weekly calls with 
the accreditors (excluding ACICS) to share information and hold DCEH 
accountable for providing information or taking actions requested by 
accreditors. These calls were not to intervene on DCEH's behalf. 
Instead, they were to make sure that DCEH was meeting accreditor 
requirements and to reiterate to DCEH that they needed to follow 
accreditor instructions.
    On July 10, 2017, Ms. Jones became aware of the notification that 
HLC had posted on its website regarding the accreditation status of 
these institutions. This was the first time Ms. Jones had seen any 
reference to CCC-Status being a non-accredited status; however, in its 
web notification, HLC referred to CCC-status as being ``recognized'' 
status and indicated that the institution has met the requirements for 
candidacy. Candidacy status, also called preaccreditation, is an 
accredited status under Department regulations. There is no such thing 
as a non-accredited, recognized status.
    On July 17, 2017, during a call with accreditors, HLC notified Ms. 
Jones that these institutions had misrepresented their accreditation 
status on their websites. Several accreditors on that call provided 
information to Ms. Jones about other issues that DCEH had to address. 
Ms. Jones typed up that list of action items for DCEH, which included 
the directive to accurately reflect the accreditation status of the 
institutions.
    On July 18, 2018, during the meeting with DCEH, Ms. Jones told DCEH 
employees that they needed to update their websites to accurately 
reflect their accreditation status using the language provided by HLC. 
Ms. Jones also provided DCEH with a written copy of the list she made 
based on the accreditor call the previous day. She asked DCEH to 
provide a response within one week to prove that they had taken 
corrective action for each item on the list. When Ms. Jones followed up 
with DCEH to see if they had taken corrective action, DCEH said that 
the list she had provided was not the bulleted list discussed at the 
meeting on July 18, 2018. Ms. Jones then forwarded DCEH an electronic 
copy of the bulleted list. Subsequently, Ms. Jones followed up with HLC 
to be sure that DCEH had corrected their website to HLC's satisfaction. 
HLC confirmed that the correction had been made.
    dates, purpose, and attendance of department meetings with dceh
    Question. The Department's qualification that these meetings were 
related to the ``impending closures'' of DCEH campuses, raises 
additional questions.
    Please provide the date of all meetings between the Department and 
DCEH officials which occurred between November 16, 2017 and August 2, 
2018. Please provide the stated purpose of any meetings and a list of 
individuals present.
    Answer. Due to ongoing investigation into this subject matter, the 
Department is unable to provide the requested information for inclusion 
in the hearing record.
    Question. Please provide the date of all meetings between the 
Department and DCEH officials which occurred between November 16, 2017 
and August 2, 2018 at which DCEH's HLC accreditation status was 
discussed. Please provide a list of individuals present. Please 
describe the nature of those discussions and any requests made by DCEH 
participants of the Department related to its HLC accreditation status, 
including any request for guidance or Department intervention with HLC.
    Answer. As stated above, on July 18, 2018 the Department met with 
DCEH officials to continue ongoing discussions about closing the 
institutions and to provide instructions to DCEH. Diane Jones also 
notified DCEH in this meeting that they would be required to change 
their website to represent their accreditation status to students, as 
required by HLC. DCEH did not request that the Department intervene on 
their behalf to HLC in the meeting.
    The following individuals attended the meeting:
  --Diane Jones (OUS)
  --A. Wayne Johnson (FSA)
  --Justin Riemer (OGC)
  --Brent Richardson (DCEH)
  --Shelly Murphy (DCEH)
            communications and documentation regarding dceh
    Question. Please provide all documents and communications between 
DCEH and any Department staff or official, including Ms. Jones, related 
to the November 16, 2017, HLC decision or DCEH's HLC accreditation 
status.
    Answer. Due to ongoing investigation into this subject matter, the 
Department is unable to provide the requested information for inclusion 
in the hearing record.
    higher learning commission actions and dceh characterization of 
                          accreditation status
    Question. In the Department's response to Question 1 of the August 
letter, it states that ``it was not until a July 17, 2018, conversation 
with [the Higher Learning Commission (HLC)] that Ms. Jones learned that 
DCEH had incorrectly described its accreditation status to students.'' 
On June 26, 2018, I sent a letter to HLC President Barbara Gellman-
Danley about media reports that DCEH was misrepresenting the 
accreditation status of its Illinois Institute of Art and Art Institute 
of Colorado campuses after the schools lost HLC accreditation on 
January 20, 2018. I sent a copy of that letter to Julian Schmoke, then 
the Department's Chief Enforcement Officer, through the Office of 
Legislation and Congressional Affairs (OLCA). Ms. Jones was at the 
Department at that time.
    Did OLCA provide a copy of that letter to Mr. Schmoke? If so, 
please provide the date on which it was provided to Mr. Schmoke.
    Answer. The letter was forwarded by email by a staff member in OLCA 
to Julian Schmoke on June 26, 2018.
    Question. Did OLCA provide a copy of that letter to any other 
office or Department official, including the Office of the Secretary or 
Ms. Jones? If so, please provide a list of individuals and the dates on 
which it was provided.
    Answer. The letter was received by a staff member in OLCA and was 
forwarded to the following individuals on June 26, 2018 by email:
  --Lynn Mahaffie
  --Kathleen Smith
  --Chris Greene
  --Herman Bounds
  --Christine Isett
  --Todd May
  --Peter Oppenheim
  --Jenny Prescott
  --Molly Peterson
  --Diane Jones did not receive a copy of the letter.
    Question. Was Ms. Jones aware of HLC's decision, effective January 
20, 2018, to remove the accreditation of the Illinois Institute of Art 
and Art Institute of Colorado campuses prior to July 17, 2018? If so, 
when and through what method did Ms. Jones learn of HLC's action?
    Answer. As stated above, the Illinois Institute of Art and the Art 
Institute of Colorado were in the equivalent of a preaccredited status 
between January 20, 2019 and the date of closure of the campuses. HLC's 
CCC-Status is the equivalent of a preaccredited status under the 
Department's regulations, which is an accredited status.
    On July 10, 2017, Shelly Murphy of DCEH sent Ms. Jones an email 
that included information HLC had posted about the two institutions on 
the HLC's website. That was the first time Ms. Jones understood that 
HLC was treating CCC-Status as a non-accredited status rather than as a 
preaccredited status. Ms. Jones had no knowledge that HLC considered 
CCC-Status to be a non-accredited status until July 10, 2018, although 
even then HLC's explanation of CCC-Status was unclear. During a call 
with accreditors on July 17, 2018, Ms. Jones learned for the first time 
that the institution's websites inaccurately described their 
accreditation status. Ms. Jones notified DCEH in a meeting on July 18th 
that they must correct their website to reflect HLC's language about 
the institution's accreditation.
    Question. Were other Department officials aware of HLC's decision, 
effective January 20, 2018, to remove the accreditation of the Illinois 
Institute of Art and Art Institute of Colorado campuses prior to July 
17, 2018? If so, please provide a list of individuals and their 
positions? When and through what method did these individuals learn of 
HLC's action?
    Answer. Due to ongoing investigation into this subject matter, the 
Department is unable to provide the requested information for inclusion 
in the hearing record.
  department direction to dceh to accurately represent accreditation 
                                 status
    Question. The Department's response to Question 1 further states 
that on July 18, 2018, Ms. Jones ``advised representatives of DCEH (at 
the meeting and in writing) that they must provide students with 
accurate information about their institution's accreditation status . . 
. ''
    Please provide a copy of the written direction from Ms. Jones to 
DCEH to which the Department is referring.
    Answer. Enclosed in this response is an email, with an attachment 
of the list, sent from Diane Jones to Shelly Murphy of DCEH via email 
on August 2, 2018. Ms. Jones handed a printed copy of the list to Ms. 
Murphy on July 18, 2018, and later when Ms. Murphy said that she had 
been given the wrong document, Ms. Jones emailed a copy to her.






     settlement administrator finding of misrepresentation by dceh
    Question. Regardless of what role, if any, the Department may have 
played in the misrepresentation, it has failed to meet its legal 
responsibility to provide the borrower defense discharges to which 
Illinois Institute of Art and Colorado Art Institute students are 
entitled under the Higher Education Act based on DCEH's 
misrepresentation. In its December 4 response, the Department reported 
that it has not opened an investigation into the misrepresentation 
despite acknowledging that it occurred. As apparent justification, the 
Department noted that a review of online videos from July informational 
meetings held for students at the closing Illinois Institute of Art 
campus ``clearly show that the students had, at some point prior to the 
meetings, learned that the school was not in accredited status.'' In 
other words, because a video shows that some small number of students 
eventually learned the truth about their school's accreditation, the 
Department believes no action against DCEH or relief for students is 
necessary based on the misrepresentation. By clinging to this 
outrageous and legally dubious position, the Department is failing to 
uphold its responsibility to enforce Federal Title IV laws and 
regulations and ignoring the harm done to students by DCEH's 
misrepresentations.
    HLC recognized the harm to students of not knowing that their 
campuses were no longer accredited. In its public disclosure announcing 
that its removal of accreditation had taken effect, HLC noted that 
students should know that ``their courses or degrees are not accredited 
by HLC and it is possible that they will not be accepted in transfer to 
other colleges and universities or recognized by prospective 
employers.'' In other words, students could be taking on debt to attend 
worthless courses or get a worthless degree.
    A 2015 settlement between Education Management Corporation and 39 
State attorneys general and the District of Columbia established a 
Settlement Administrator to enforce the terms of the settlement--which 
became binding on DCEH as part of its acquisition of EDMC schools. In 
February, Settlement Administrator Thomas Perrelli released his Third 
Annual Report which found that DCEH violated the settlement as a result 
of its ``failure to advise students that certain schools had lost their 
accreditation.'' Mr. Perrelli found that ``DCEH did not inform Illinois 
Institute of Art or Art Institute of Colorado students or prospective 
students that it had lost accreditation'' despite being ``obligated'' 
by HLC to do so. Instead, Mr. Perrelli found that DCEH ``revised the 
accreditation statement on its website to expressly claim that the 
schools ``remain accredited as a candidate school'' which was 
``inaccurate and misleading.''
    During the time DCEH failed to disclose its loss of accreditation 
status to students and made express misrepresentations, ``students 
stayed in the unaccredited schools'' and ``registered for additional 
terms and incurred additional debts, for credits that were 
significantly less likely to transfer to other schools and towards a 
degree that was to have limited value.'' Mr. Perrelli found that these 
problems were ``exacerbated dramatically when DCEH announced in July 
that it would be closing those schools, leaving many of those students 
dependent on the transferability of their credits to further their 
education.'' He concludes that DCEH's eventual correction of its 
misleading statements ``did not resolve'' the harm students had 
experienced.
    Please respond to Mr. Perrelli's findings related to DCEH's 
misrepresentation of its accreditation status and failure to disclose 
its loss of accreditation to students.
    Answer. As stated above, the Illinois Institute of Art and the Art 
Institute of Colorado were in the equivalent of a preaccredited status 
between January 20, 2019 and the date of closure of the campuses. HLC's 
CCC-Status is the equivalent of a preaccredited status under the 
Department's regulations.
    Question. In the aftermath of Mr. Perrelli's findings and the 
subsequent misconduct by DCEH related to missing student stipends and 
the precipitous closure of Argosy and its other institutions, will the 
Department open an investigation into the accreditation 
misrepresentation at Illinois Institute of Art and Art Institute of 
Colorado?
    Answer. The Department has asked HLC to review its standards since 
the Department believes that HLC's standards do not support a 
determination that theses campuses were in non-accredited status. The 
Department believes HLC was out of compliance with Department 
regulations in attempting to move an accredited institution to 
preaccredited status, and then making an accreditation decision based 
on a focused site visit. Moreover, HLC's policies require that an 
institution which loses accreditation to sit out for 5 years. 
Therefore, it is not possible that CCC-Status is a nonaccredited 
status.
   borrower defense and closed school discharges and amounts recouped
    Question. Since the 2014 collapse and 2015 bankruptcy of Corinthian 
Colleges, Inc., many for-profit colleges have followed suit--closing 
their doors as part of a planned teach-out or shuttering precipitously. 
In these cases, students are eligible for Federal closed school 
discharges. Many are also eligible for Federal student loan discharges 
through the Higher Education Act's borrower defense provision as a 
result of their institution's fraud and misconduct. We cannot let 
students be left holding the bag. At the same time, the Department's 
enforcement failures, failures to hold accreditors accountable, 
attempts to roll back the Gainful Employment and Borrower Defense 
rules--including provisions allowing students to hold institutions 
directly accountable in court for misconduct--mean that taxpayers are 
ultimately on the hook.
    Please provide the cumulative cost of approved closed school and 
borrower defense discharges (including automatic closed school 
discharges under the 2016 Borrower Defense rule) associated with for-
profit colleges since 2014.
    Answer. The cumulative cost of approved closed school and borrower 
defense discharges associated with for-profit institutions is 
approximately $1.3 billion; $530 million in borrower defense discharges 
and $750 million in closed school discharges, including automatic 
closed school discharges.
    Question. Please provide the cumulative amount that the Department 
has recouped from institutions for closed school discharge costs 
associated with for-profit colleges since 2014.
    Answer. The Department's recoupment of loan discharge liabilities 
is a trailing process which follows the Department's quantification of 
actual discharged loan amounts and assertion of liabilities. In 
general, when an institution closes, it is required to submit a 
``Close-Out Audit'' report to the Department. When FSA resolves a 
close-out audit, it quantifies closed school loan discharges and 
asserts liabilities in the final audit determination for the close-out 
audit report. FSA may also pursue additional recovery of liabilities 
arising after the close-out audit is resolved. In all cases, the 
Department must provide institutions with appeal rights to challenge 
asserted liabilities and the Department does not pursue collections 
while an appeal is pending. In addition, the circumstances of some 
school closures may require the Department to pursue recoveries through 
protracted bankruptcy proceedings. To that end, the Department has 
recouped $581,079.80 from institutions for closed discharge costs 
associated with for-profit colleges since 2014.
    Question. Please provide the cumulative amount that the Department 
has recouped from institutions for automatic closed school discharge 
costs associated with for-profit colleges under the 2016 Borrower 
Defense rule.
     Answer. The cumulative amount that the Department has recouped for 
automatic closed school discharge (ACSD) costs associated with for-
profit colleges under the 2016 Borrower Defense rule is $0. The 
Department is still designing and implementing the processes to assess 
liabilities to the new discharge type, ACSD, created in the new 
regulations. However, note that institutions associated with ACSD costs 
closed more than 3 years ago; while the Department intends to assess 
liabilities, the Department may not successfully recoup funds from the 
closed institutions.
    Question. Please provide the cumulative amount that the Department 
has recouped from institutions for borrower defense discharge costs 
associated with for-profit colleges since 2014.
    Answer. The Department has not recouped any costs associated with 
borrower defense loan discharges from institutions. The Department has 
only approved borrower defense applications associated with the conduct 
of three institutions: Corinthian Colleges, Inc. (CCI), American Career 
Institute (ACI), and ITT Educational Services, Inc. (ITT). The 
Department was unable to recover the cost of discharges associated with 
CCI and ACI, as those institutions closed with no assets available for 
recoupment. The Department filed a proof of claim in connection with 
ITT's bankruptcy proceedings. However, as of April 25, 2019, the 
Department has not received any recovery from ITT.
             letters of credit or surety for closed schools
    Question. Please provide the amounts of any letters of credit or 
surety held by the Department from Corinthian Colleges, ITT Tech, 
Education Corporation of America, Vatterott, and Dream Center Education 
Holdings--or any institutions owned or operated by these companies--at 
the time of their precipitous closure and a full accounting of the 
Department's use of such funds in each case.
    Answer.
Dream Center Education Holdings
    Various Dream Center Education Holdings (DCEH) schools and 
locations closed at different times. On March 8, 2019, many DCEH 
schools, including Argosy University and several Art Institutes, 
precipitously closed months after entering Federal receivership.
    The Department initially held $92,624,330 in letter of credit (LOC) 
proceeds for DCEH schools. These surety funds, held in a Federal 
holding account, were proceeds of LOCs provided by Education Management 
Corporation (EDMC). The Department called the LOCs in May 2018.
    In June 2018, DCEH notified the Department of the need to teach out 
27 campuses and asked to access some of the funds held as proceeds of a 
LOC to support certain teach-out costs. The terms of the LOCs allowed 
their use for teach-out costs, closed school loan discharges, fines, 
and other trailing liabilities. At that time, the Department allowed 
limited use of the proceeds, through an audited reimbursement 
methodology, to avoid a precipitous closure of all DCEH schools. The 
Department required DCEH to submit expense reimbursement requests that 
were certified by an outside auditor and then verified by the 
Department. In total, DCEH submitted approximately $39 million worth of 
expense statements that were eligible for reimbursement. During the 
period from August 28, 2018 through December 31, 2018, the Department 
made seven disbursements totaling $39,586,990 from the LOC proceeds to 
DCEH.
    The Education Principle Foundation (EPF) acquired some Art 
Institutes and South University from DCEH on January 7, 2019. The 
Department reallocated $28,500,000 of the available DCEH surety funds 
into different holding accounts to cover financial risks for the EPF 
institutions on February 11, 2019.
    On March 8, 2019, the Department held--and it continues to hold as 
of this date--$24,537,340 in surety funds for DCEH institutions.
ITT Educational Services
    ITT Technical Institutes (ITT Tech) (OPEIDs 007329 and 030718) 
closed September 3, 2016, and Daniel Webster College (DWC) (OPEID 
004731) closed September 14, 2016. Southern New Hampshire University 
provided an approved teach out on a temporary basis for former DWC 
students at the DWC campus until August 2017. At the time of these 
closures, the Department held--and it continues to hold as of this 
date--$94,353,980 in surety funds. The Department's retention of these 
funds is currently the subject of litigation in Federal bankruptcy 
court.
Education Corporation of America (ECA)
    Education Corporation of American (ECA) operated 23 main 
institutions operating under the names Brightwood College/Brightwood 
Career Institute, Virginia College (including EcoTech Institute and 
Golf Academy of America), and New England College of Business and 
Finance. ECA schools, except New England College of Business and 
Finance, closed between December 7, 2018 and December 21, 2018. New 
England College of Business and Finance continues to operate, is in the 
process of being sold through the receivership process, and is seeking 
the regulatory approvals needed for such a sale.
    The Department held no surety when most of the ECA schools closed 
on December 7, 2018 or soon after. The Department requested surety on 
November 14, 2018, and it placed the institutions on the Heightened 
Cash Monitoring 2 Method of Payment on November 8, 2018. ECA was 
required to provide a LOC to the Department in the minimum amount of 
$63,940,069. ECA closed most of its locations before providing the 
required surety amount. On March 26, 2019, the Department received a 
LOC of $1,036,521 for New England College of Business and Finance, 
which it continues to hold; the LOC expires March 20, 2020.
Vatterott College
    Various institutions owned by Vatterott have closed at different 
times. On December 17, 2018, 14 Vatterott locations, including its 
L'Ecole Culinaire and Ex'treme Institute brands, closed precipitously. 
At the time of these closures, the Department held--and it continues to 
hold as of May 6, 2019--$12,882,632 in surety funds.
Corinthian Colleges
    The Department had no surety on file when Corinthian Colleges 
closed.
 process to assess liabilities for closed school and borrower defense 
                               discharges
    Question. Please provide information and relevant documents 
sufficient to show the Department's process in assessing liabilities 
for closed school and borrower defense discharges (including automatic 
closed school discharges under the 2016 Borrower Defense rule), the 
formula used in determining the liability amount, the method of 
recoupment (e.g. offset from Title IV, invoice, penalty, etc.), the 
entity or person to be assessed (e.g. the president, receiver, or 
bankruptcy trustee; the timeline by which liabilities will be assessed 
and recouped for approved closed school and borrower defense discharges 
and for future closed school and borrower defense discharges (including 
automatic closed school discharges under the 2016 Borrower Defense 
rule).
    Answer. The Department is reviewing the processes and is 
considering changes to accommodate the 2016 regulations. For automatic 
closed school discharges (ACSD) and borrower defense discharges, the 
Department is developing new procedures to assess institutional 
liabilities to conform to the 2016 regulations. The entity or person to 
be assessed is dependent on the status of the institution (e.g., open, 
closed, bankruptcy, and receivership). The timeline by which 
liabilities will be assessed and recouped for approved closed school 
and borrower defense discharges will not be determined until discharges 
are completed. The final liabilities will be subject to an appeal 
process. The processes related to borrower defense discharges under the 
2016 regulations are currently being developed by the Department. That 
said, the Department plans to finalize the new ACSD processes to assess 
liabilities within the next 60-100 days, including publication of an 
Electronic Announcement on the Information for Financial Aid 
Professional online portal to notify the financial aid community of the 
new processes.
  plans to assess liabilities and seek recoupment for discharges for 
                  closed schools and borrower defense
    Question. Will the Department assess liabilities and seek 
recoupment for closed school or borrower defense discharges (including 
automatic closed school discharges under the 2016 Borrower Defense 
rule) from each institution that generates such discharge, or does the 
Department assert discretion on a case-by-case basis?
    If the Department asserts discretion, please provide documentation 
sufficient to show the Department's process for making these 
determinations.
    Answer. For borrower defense, the Department continues to review 
processes--including whether or how it will use its discretion--and may 
consider changes to accommodate the 2016 regulations. The 2016 rule 
requires recoupment in some instances and permits it in others. The 
Department is drafting policies and procedures within the next 60 to 
100 days to address instances for which we have discretion.
    The Automatic Closed School Discharge (ACSD) procedures will follow 
the closed school discharge processes; all liabilities will be 
assessed, even if there is little chance of payment on such liabilities 
because the institution has closed. At the same time, the Department is 
considering changes to make processes more efficient. For example, 
liabilities typically have been assessed through a final audit or final 
program review determination by the specific team conducting the work; 
however, due to the increased volume in liabilities, the Department is 
evaluating the feasibility of centralizing and automating the 
assessment of liabilities. The Department expects to finalize these 
processes within the next 60 to 100 days.
                     borrower defense claim backlog
    Question. During your hearing I asked you why it is taking so long 
to process the tens of thousands of borrower defense claims pending at 
the Department. This week, the Department revealed that it is now 
sitting on 158,110 pending claims and has not approved a single claim 
between June 30, 2018 and December 31, 2018. Please provide:
  --a. The average length of time the 158,110 claims have been pending;
  --b. The percentage of pending claims related to for-profit 
        institutions, public institutions, and private not-for-profit 
        institutions respectively;
  --c. A breakdown of the 158,110 pending claims by institution; and
  --d. A list of all group discharge applications the Department has 
        received from State attorneys general including the date 
        submitted, by whom, the school/programs, and the number of 
        covered borrowers.
  --e. How many of the applications referenced in (d) are pending? How 
        many have been granted? How many have been denied? Please 
        provide a list of each.
  --f. For each of the years 2016, 2017, 2018, and 2019 how many 
        borrowers covered by a group discharge application are in 
        default on their Federal student loans?
  --g. For each of the years 2016, 2017, 2018, and 2019, how many loans 
        of the borrowers covered by a group discharge application have 
        been certified by the Department of Education for Treasury 
        offset?
  --h. For each of the years 2016, 2017, 2018, and 2019, how many 
        borrowers covered by a group discharge application have been 
        subject to an administrative wage garnishment order put in 
        place by the Department?
  --i. For each of the years 2016, 2017, 2018, and 2019, what are the 
        total dollar amounts of Federal student loans (interest and 
        principal) covered by each group discharge application from a 
        State attorney general?
  --j. For each of the years 2016, 2017, 2018, and 2019, what are the 
        total dollar amounts collected through the Treasury Offset 
        Program on defaulted student loans covered by each group 
        discharge application from a State attorney general?
    Answer.
  --a. As of December 31, 2018, the 158,110 claims have been pending an 
        average of 882 days.
  --b. The percentages of pending claims related to for-profit, public, 
        and private not-for-profit institutions are 76.5 percent, 3.5 
        percent and 20 percent, respectively.
  --c. Attached is a validated spreadsheet containing the institutional 
        breakdown of the 158,110 pending applications as of December 
        31, 2018. The Department provided the attachment to the 
        Committee.
  --d. Enclosed table ``Durbin Question 6.4 (Updated 8.6.2019)'' 
        provides a list of all attorneys general submissions related to 
        groups of borrowers for which the attorneys general seek a 
        borrower defense discharge as of August 6, 2019. The table 
        includes the submission date, the attorneys general, the 
        school, and the diploma program, if applicable. If a diploma 
        program is not provided for a submission, the submission was 
        not limited to a specific program. It is within the Secretary's 
        discretion to decide whether a group discharge process will be 
        applied to a group of borrowers, and policies and procedures 
        that will apply to the group discharge process are under 
        development. The Department cannot provide the number of 
        borrowers that will be included in a certain group unless and 
        until a group is established and defined by the Secretary. 
        However, individual applications submitted by attorneys general 
        have been and will continue to be considered under the 
        individual application review process.
        
        
  --e. Enclosed is the Department's Borrower Defense Quarterly Report 
        for the quarter ending December 31, 2018. It provides a 
        breakdown of all applications by received, pending, approved, 
        denied, and closed.
    At this time, the Department cannot narrow its reporting to 
applications submitted by attorneys general. Policies, procedures, and 
platform functionality that will apply to the group discharge process 
are under development. The platform currently does not track which 
applications are submitted by attorneys general. When all systems and 
processes are updated, the platform will track which applications are 
included in a group discharge process for the groups to be defined by 
the Secretary.




  --f. The Department has not yet defined the group(s) that may be 
        considered in a group discharge process and, therefore, cannot 
        identify the borrowers at issue. Further, at this time, the 
        Department cannot narrow its reporting to applications 
        submitted by attorneys general. Policies, procedures, and 
        platform functionality that will apply to the group discharge 
        process are under development.
  --g. Please see the Department's response to item (f) above.
  --h. Please see the Department's response to item (f) above.
  --i. Please see the Department's response to item (f) above.
  --j. Please see the Department's response to item (f) above.
  ban on mandatory pre-dispute arbitration and class action provisions
    Question. In March, the Department released long-delayed guidance 
for schools to comply with the ban on mandatory pre-dispute arbitration 
and class action provisions of the 2016 Borrower Defense rule which is 
now in effect after the Department's illegal delay.
    Please provide an update on the Department's implementation of 
these provisions.
    Answer. On March 15, 2019, the Department published an Electronic 
Announcement that required institutions to comply with the new 
regulations regarding class action bans and pre-dispute arbitration 
agreements within 60 days. The Electronic Announcement also requires 
institutions to submit qualifying arbitral and judicial records within 
90 days.
    Question. What is the Department doing to ensure that institutions 
comply with the requirement that schools end enforcement of any 
existing mandatory pre-dispute arbitration clauses and class action 
restrictions in enrollment agreements.
    Answer. The Department does not comment on deliberative, 
preliminary, or ongoing investigative work, including the enforcement 
of the Title IV regulations. That said, through its program review 
authority, the Department will monitor compliance with the requirement 
that schools end enforcement of any existing mandatory pre-dispute 
arbitration clauses and class action restrictions in enrollment 
agreements.
    Question. What is the Department doing to ensure that institutions 
amend their enrollment agreements or provide notice to students that 
the provisions are no longer enforceable?
    Answer. The Department does not comment on deliberative, 
preliminary, or ongoing investigative work, including the enforcement 
of the Title IV regulations. That said, through its program review 
authority, the Department will monitor institutions' compliance with 
the requirement that their enrollment agreements comply with the 
guidance in the March 15, 2019 Electronic Announcement published at 
ifap.ed.gov/eannouncements/
030719GuidConcernProv2016BorrosswerDefensetoRypmtRegs.html.
               plans for rewrite of borrower defense rule
    Question. While it illegally delayed the 2016 Borrower Defense 
rule, the Department pursued a new negotiated rulemaking process to 
rewrite the rule. In August 2018, the Department issued an NPRM, but 
has not published a final rule.
    When does the Department expect to publish a final rule?
    Answer. The Department plans to publish a final rule on Borrower 
Defense in 2019.
    Question. Does the Department expect to issue a final rule in 
fiscal year 2019?
    Answer. As stated above, the Department plans to publish a final 
rule on Borrower Defense in 2019.
      gainful employment rescission and career education program 
                             accountability
    Question. The Higher Education Act requires that career education 
programs prepare students for gainful employment in a recognized 
occupation, not merely that they disclose whether or how well they do 
so.
    How does the Department's Notice of Proposed Rulemaking (NPRM) that 
would rescind the Gainful Employment rule (GE) enforce the 
accountability requirement that Congress wrote into the law?
    Answer. Congress never defined the term gainful employment as an 
accountability standard. The accountability standards in law include 
financial responsibility metrics, cohort default rate, and student 
outcomes that do not include a specific debt to earnings metric.
            costs and benefits of gainful employment repeal
    Question. The Department estimated that repealing GE would cost 
$4.7 billion over 10 years.
    Please provide a detailed explanation of how this additional 
spending will lead to quality educational or workplace outcomes.
    Answer. The Department estimates that the notice of proposed 
rulemaking to rescind the gainful employment regulation will result in 
costs in the form of transfers as a result of more students being able 
to enroll in a postsecondary program and more educational program 
choices for students where they can use title IV aid. The Department is 
taking steps to help students make decisions about the postsecondary 
options that are best for them through information on the College 
Scorecard on cost and outcomes.
         rollback of gainful employment disclosure requirements
    Question. In the NPRM, the Department relied on the availability of 
consumer information, particularly with regard to student debt and 
earnings, as a justification for repealing the Title IV eligibility 
enforcement mechanism of GE. Yet, just a few months later, the 
Department further scaled back the information required in the GE 
disclosure template, and its most recent proposal does not include an 
earnings measure.
    Please provide a detailed explanation of how the Department will 
reconcile the stated reliance on consumer information given that just 
three of the ten original consumer disclosure elements are currently 
still required?
    What was the Department's basis for eliminating elements from the 
GE disclosure template?
    Did the Department conduct consumer testing to inform its changes 
to the GE disclosure template? If not, please provide a detailed 
explanation of why no additional consumer testing was performed with 
regard to the determination to eliminate elements from the GE consumer 
disclosure template?
    Answer. Because the Department is currently drafting a final rule 
in response to comments submitted during the public comment period for 
our NPRM regarding GE, it would be inappropriate for the Department to 
comment on issues related to the areas covered by the GE rulemaking at 
this time.
                         debt-to-earnings rates
    Question. On October 18, 2018, I wrote to you about the 
Department's delay in developing the second round of debt-to-earnings 
(D/E) rates under GE. On May 24, 2018, the Memorandum of Understanding 
(MOU) between the Department and the Social Security Administration 
(SSA)--allowing for the sharing of data to calculate D/E rates--
expired. According to the timeline for calculating and publishing the 
first round of D/E rates, the Department should have published the 
second round of rates prior to the expiration of the MOU. It was the 
Department's unreasonable delay that allowed the MOU to expire before 
it carried out its legal responsibilities to implement and enforce GE. 
Almost 1 year after the MOU's expiration, it has not been renewed and 
the Department still has not obtained data to calculate a second round 
of D/E rates from SSA.
    Please provide an official response to my October 18, 2018, letter.
    Answer. The Department sent a response to this letter on April 26, 
2019.
    Question. Has the Department's improper use of GE data to calculate 
and award partial relief for borrower defense discharges played a role 
in the Department's inability to renew its MOU with SSA and get data to 
calculate the second round of D/E rates under GE? Please answer yes or 
no.
    Answer. The Department does not believe it improperly used GE data 
to calculate and award partial debt relief. However, as pointed out by 
Congress and the courts, SSA data may be used only to administer the 
Social Security programs.
    Question. Has the IRS and/or SSA expressed the view either formally 
or informally that use of the data for this purpose was outside the 
scope of permissible use and/or inappropriate?
    Answer. The Department does not believe it improperly used GE data 
to calculate and award partial debt relief.
    Question. What are your plans to uphold your legal responsibility 
to enforce GE to ensure that ineligible programs are not receiving 
Title IV aid?
    Answer. The Department will continue to enforce the GE rule to the 
extent it can without earnings data.
      department of treasury earnings data and gainful employment
    Question. A March 2019 Executive Order, ``Improving Free Inquiry, 
Transparency, and Accountability at Colleges and Universities,'' 
directs the Secretary of the Treasury to provide program-level data, 
including median earnings and debt data for borrowers attending Title 
IV-eligible postsecondary institutions, ``in a timely manner'' upon the 
request of the Secretary of Education for the purposes of expanding the 
College Scorecard.
    Has the Department sought this same degree of cooperation when it 
comes to obtaining earnings data for purposes of implementing and 
enforcing GE?
    Answer. Yes, it has.
    Question. Will the Department commit that earnings information 
obtained from the Department of the Treasury pursuant to the Executive 
Order will not be used to calculate partial relief for borrower defense 
discharges?
    Answer. The Department has not finalized a data sharing agreement 
with the Department of Treasury, so it is unable to provide details on 
the scope of what the data may or may not be used for.
                      letter of credit submissions
    Question. It is my understanding that on April 20, 2018, the 
Department provided to the Office of Senator Elizabeth Warren a list of 
institutions that submitted a letter of credit to the Department 
between January 1, 2016 and November 30, 2017.
    Please provide that list.
    Answer. Please see the attachment for the requested information. 
The Department provided the attachment to the Committee.
    Question. Please also provide an updated list of institutions of 
higher education for which the Department currently holds a letter of 
credit or other surety and the amount of such letter of credit or other 
surety.
    Answer. Please find attached an Excel spreadsheet containing data 
on the Letters of Credit (LOC) received from institutions during the 
period of December 01, 2017 through April 01, 2019. To satisfy the 
request in a timely manner, we have provided a list of any LOC received 
between December 01, 2017--April 01, 2019, but we have not identified 
whether it was an increase from a previous LOC. We also interpreted the 
request to mean the submission of an LOC from any school, not just a 
school submitting an LOC for the first time. Throughout that period, 
the Department received 525 LOCs from 433 institutions or main OPEIDs 
totaling nearly $716.7 million in financial securities.
    The Department provided the attachment to the Committee.
                       heightened cash monitoring
    Question. Please provide a list of all institutions that are 
currently on Heightened Cash Monitoring (HCM) 1 or Heightened Cash 
Monitoring 2. Please provide copies of the audited financial statements 
of all schools on HCM1 status related to financial responsibility and 
the copies of the audited financial statements of all schools on HCM2 
status.
    Answer. Enclosed is the validated spreadsheet containing the 483 
Title IV institutions that were operating under the Heightened Cash 
Monitoring (HCM) method of payment as of March 1, 2019. Of these, 422 
institutions were operating under HCM1, and 61 institutions were 
operating under HCM2. This disclosure, as well as additional 
information about HCM, can be found at: studentAid.gov/sa/about/data-
center/school/hcm. Due to the significant time and burden involved with 
the collection, review, and redaction of any requisite information on 
the 341 financial statements representing those institutions operating 
on HCM2 or on HCM1 due to ``financial responsibility,'' the Department 
respectfully requests that the member's staff review the list and 
request of the Department the remission of only those financial 
statements which may be of particular interest.
    The Department provided the validated spreadsheet to the Committee.
    institutions failing to meet financial responsibility standards
    Question. The Department's records indicate that 2,421 institutions 
had composite scores lower than ``1'' in the last-reported fiscal year, 
indicating that these institutions were not meeting financial 
responsibility standards during that time.
    Please provide a list of institutions that have had a composite 
score lower than ``1'' at any point since January 2017.
    Answer. Section 498(c) of Higher Education Act requires for-profit 
and non-profit institutions to annually submit audited financial 
statements to the Department to demonstrate they are maintaining the 
standards of financial responsibility necessary to participate in the 
Title IV programs. From these statements, the Department calculates and 
publicly posts institution-specific Financial Responsibility Composite 
Scores.
    Question. What steps is the Department taking to review the 
participation of or to pursue limitation, suspension, or termination of 
institutions not meeting financial responsibility standards with 
composite scores lower than ``1.''
    Composite scores are calculated annually and publicly disclosed via 
the FSA Data Center at StudentAid.gov/sa/about/data-center/school/
composite-scores. The most recent composite scores available are for 
Award Year (AY 2016--2017) and include scores for 3,590 private, non-
profit and proprietary institutions with fiscal years ending between 
July 1, 2016 and June 30, 2017.
    Of the 3,590 institutions whose scores were included in the 
AY2016--2017 disclosure, 269 registered a failing score below a ``1'' 
(-1.0 to .9). A listing of those 269 institutions may be obtained by 
sorting the values (-1.0 to .9) in Column J of the spreadsheet posted 
on the FSA Data Center.
    Answer. Consistent with the regulatory authority afforded the 
Department under 34 CFR 668.175, institutions that register a financial 
responsibility composite score below ``1'' and are deemed not 
financially responsible may be offered the opportunity to continue 
participating in the Title IV programs for up to three consecutive 
years through the Provisional Certification Alternative. If the 
Department permits an institution to participate under provisional 
certification, the Department also requires the institution to remit a 
letter of credit to the Department of at least 10 percent of the 
Federal student aid program funds received by the institution during 
its most recent fiscal year, demonstrate that the institution has met 
all of its financial obligations, and demonstrate that the institution 
was current on debt payments for its two most recent fiscal years. 
Additionally, the institution must comply with the requirements under 
the Zone Alternative that it provide timely information regarding 
certain oversight and financial events and be placed on the heightened 
cash monitoring method of payment. If an institution is still not 
financially responsible at the end of a period of provisional 
certification, the Department may again permit provisional 
certification.
    In the event an institution with a composite score less than 1.5 
posts a letter of credit equal to 50 percent or more of the Title IV 
aid the institution received, that institution is considered 
financially responsible. As a result, the institution may be free of 
cash monitoring and other participatory requirements if there are no 
other substantive problems related to its Title IV participation.
    More information about the provisional certification requirements 
for proprietary and non-profit schools failing to meet the financial 
responsibility standards can be found in the 18-19 FSA Handbook on page 
2-98 at https://ifap.ed.gov/fsahandbook/attachments/
1819FSAHbkVol2Ch4.pdf.
     program compliance reviews for fiscal years 2017 through 2019
    Question. Please provide the number of program reviews that have 
examined institutional compliance with the requirements of incentive 
compensation in fiscal year 2017, fiscal year 2018, and fiscal year 
2019 and how many of those reviews have found noncompliance.
    Answer. The Department does not comment on deliberative, 
preliminary, or ongoing investigative work, including disclosing a 
detailed list of program reviews that have examined compliance with the 
requirements of incentive compensation, as these program reviews may 
not have been finalized. However, through its program review authority, 
through March 31, 2019, the Department conducted or is conducting 53 
program reviews for fiscal years 2017--2019. These program reviews 
examined or are examining institutional compliance with incentive 
compensation requirements.
                for-profit to not-for-profit conversions
    Question. In recent years, several for-profit colleges have 
attempted to convert to not-for-profit status in an effort to avoid the 
stigma associated with the predatory for-profit college industry and to 
avoid regulations meant to protect students and taxpayers. Dream Center 
Education Holdings, which recently collapsed leaving thousands of 
students stranded and whose conversion received preliminary Department 
approval, is just one example. Please provide a list of all for-profit 
conversions in the last 10 years including those pending (with current 
status), previously approved, and denied or withdrawn.
    Answer. Within the last 10 years, the Department has received 64 
applications for a for-profit to not-for-profit conversion. Of those 64 
applications, the Department has made final decisions on 38 conversion 
requests. Of those 38 decisions, 37 were approved,\*\ while one--for 
Argosy University--was denied. Additionally, 12 applications were 
closed due to a voluntary withdrawal or school closure. There are 14 
outstanding conversion requests.
---------------------------------------------------------------------------
    \*\ In August 2016, the four main locations operated under by the 
Center for Excellence in Higher Education, which previously had their 
conversion requests denied, were approved as part of a settlement. 
Additionally, one approved conversion involving Kaplan University and 
Purdue University resulted in a conversion to a public benefit 
corporation, rather than a not-for-profit institution.
---------------------------------------------------------------------------
    The Department provided an attachment with the requested 
information to the Committee.
  argosy university ownership change and effort to convert to no-for-
                             profit status
    Question. In 2017, Argosy University applied to the Department for 
approval of a change in ownership to Dream Center Education Holdings 
(DCEH) and to convert to non-profit status. Despite widespread concerns 
raised by myself and others, the Department provided preliminary 
approval without proper protections for students and taxpayers on 
October 17, 2017. Within months, Argosy and other DCEH schools began to 
collapse. On February 27, 2019, the Department rejected Argosy's 
original change in ownership and conversion application citing Argosy's 
failure to meet the Department's fiduciary standards of conduct, 
standards of financial responsibility, and standards of administrative 
capability.
    What did the Department do to inform students and the public that 
Argosy schools--and others owned by DCEH--had not received a final 
determination approving the sale and conversion to non-profit status?
    Answer. When the Department conducts acquisition reviews, 
institutions are typically put on a temporary program participation 
agreement, until such time when the Department has fully reviewed an 
application. Being placed in this temporary status is not necessarily 
an indication of poor academic quality. Rather, it is an indication 
that the Department is still actively reviewing the institution's 
application. For that reason, the Department does not conduct outreach 
to students to inform them of this temporary status.
    Question. Between its preliminary approval and its February 2019 
denial, what was the Department doing to ensure that the change in 
ownership and conversion met requisite standards for a sale and a 
conversion to non-profit status?
     Answer. During that time, the Department was still reviewing 
DCEH's application.
    Question. What is the Department doing to ensure that the other 
schools that were part of the original change in ownership and 
conversion application are meeting the Department's fiduciary standards 
of conduct, standards of financial responsibility, and standards of 
administrative capability?
    Answer. The Department monitors all such institutions to ensure 
compliance with the terms and conditions of the temporary program 
participation agreements.
   extension of closed school discharge eligibility for dceh students
    Question. On August 3, 2018, several of my colleagues and I wrote 
urging you to take immediate action to assist students harmed by the 
announced closures of nearly 30 DCEH campuses--including Art 
Institutes, Argosy, and South University campuses. Specifically, we 
asked you to use your authority under 34 C.F.R. 
Sec. 685.214(c)(l)(i)(B) to extend the closed school discharge 
eligibility period beyond 120 days under ``exceptional circumstances.'' 
The chaotic nature of the closures, and DCEH's failure to provide clear 
information to students about their potential eligibility for closed 
school discharges, clearly constituted exceptional circumstances that 
put students at risk of a significant disruption to their education or 
being stuck with loan debt and credits of little value.
    For the Art Institute of Colorado and Illinois Institute of Art 
(including the Novi, Michigan branch campus), we urged you to extend 
closed school discharge eligibility back to January 20, 2018--the date 
these institutions lost accreditation from the Higher Learning 
Commission (HLC). At that time, HLC warned that ``courses or degrees 
[from these unaccredited institutions] . . . may not be accepted in 
transfer to other colleges and universities or recognized by 
prospective employers.'' Given DCEH's misrepresentation of its 
accreditation status to students and failure to provide them with the 
``proper advisement and accommodations'' after the loss of 
accreditation, as required by HLC, students enrolled at these campuses 
should be entitled retroactive relief. For all the other closing DCEH 
campuses at that time, we asked you to extend closed school discharge 
eligibility to students going back to July 2, 2018--the date on which 
the planned closures were announced internally.
    Please provide an official response to our August 3, 2018, letter. 
Will you extend the closed school discharge eligibility window for 
these students?
    Answer. The Department is currently reviewing the facts regarding 
the closure of DCEH institutions and, based on the findings of that 
review, will determine whether or not the look back period for closed 
school loan discharge eligibility should be extended beyond the current 
120 day period. However, among those students who were enrolled at a 
DCEH school at the time it announced its teach-out, and who opted to 
take a closed school loan discharge, we will extend the closed school 
discharge eligibility look-back period to ensure that they are not 
precluded from receiving a closed school loan discharge simply because 
the teach-out was longer than 120 days. We believe that a student who 
chooses a closed school loan discharge rather than participation in a 
teach-out agreement should remain eligible for that closed school loan 
discharge even if the institution closes more than 120 days after the 
teach-out is announced. We are carefully reviewing the circumstances 
regarding the accreditation of the Art Institute of Colorado and 
Illinois Institute of Art to determine when, in fact, accreditation was 
lost. Based on our review of HLC's standards and the Department's 
regulations, It remains the Department's position that those 
institutions were accredited until their closure in December 2018. The 
Department, therefore, has not yet determined whether or not the closed 
school loan discharge eligibility period should be extended beyond the 
normal 120 period for students enrolled at those institutions. We 
understand the importance of this review and decision.
extension of closed school discharge eligibility for argosy university 
                                students
    Question. On March 8, 2019, several of my colleagues and I sent you 
a letter urging that you take immediate action to assist students in 
the aftermath of the Department's decision to terminate Argosy's 
eligibility for Federal Title IV financial aid and reports of Argosy's 
imminent closure. Argosy University's closed later that day. 
Specifically, we asked you to use your authority under 34 C.F.R. 
Sec. 685.214(c)(l)(i)(B) to extend the closed school discharge 
eligibility period beyond 120 days under ``exceptional circumstances'' 
to any Argosy student who withdrew on or after October 17, 2017--the 
date the Department provided its preliminary approval of Argosy's 
change in ownership and conversion to non-profit status. Almost 
immediately after DCEH's announcement of its intention to acquire EDMC 
schools, concerns began to be raised publicly about the transaction's 
potential negative consequences for students. The Department had an 
opportunity to condition its October 17, 2017, preliminary approval on 
protections for students and taxpayers, but failed to do so. Following 
that decision, DCEH's predatory practices, mismanagement, and financial 
troubles led to voluminous public reporting in the media. Therefore, 
any student who withdrew on or after October 17, 2017, could have 
reasonably believed their school to be a sinking ship. The Department 
should not penalize these students for taking the reasonable step of 
abandoning a sinking ship by denying them Federal closed school 
discharge eligibility.
    Please provide an official response to our March 8, 2019, letter. 
Will you extend the closed school discharge eligibility window to 
October 17, 2017, for Argosy students.
    Answer. The Department has cancelled all Federal student loans 
taken by Argosy students and/or their parents for or during the Spring 
2018 semester. In addition, any student who was enrolled at Argosy, or 
who left Argosy at any time during the Spring semester would be 
eligible for closed school loan discharge under the current 120 day 
look-back period.
 90/10 data including funds from gi bill and defense tuition assistance
    Question. On December 10, 2018, Chairman Takano, Senator Carper, 
Representative Cohen, Ranking Member Murray, Chairwoman DeLauro, 
Ranking Member Reed, Chairman Adam Smith, Senator Blumenthal, 
Representative Susan Davis, and I wrote to you asking that you release 
Federal 90/10 data which counts accurately as Federal revenue all 
revenue received by for-profit colleges from Federal taxpayer-funded 
educational assistance programs. This would include Department of 
Veterans Affairs GI Bill and Department of Defense Tuition Assistance 
funding. The Department released this data in December 2016. Please 
provide the data requested in our December letter--to which you still 
have yet to respond.
    Answer. The Department sent a response to your letter on March 28, 
2019. As stated in the letter, the December 2016 report that you are 
referencing did not accurately state the percentage of institutional 
revenue derived from Federal sources, including from title IV, 
Department of Defense (DoD) Tuition Assistance, and Veterans Affairs 
(VA) educational assistance funds. In order to accurately calculate 
institutional revenue under a modified 90/10 rule that includes such 
Federal funds, institutions would need to report which amounts of 
education assistance are credited for tuition and fees. The HEA does 
not require such reporting; therefore, the Department is not able to 
accurately provide such data.
   restoration of recognition for accrediting council of independent 
                   colleges and universities (acics)
    Question. On November 21, 2018, you restored Federal recognition to 
deadbeat for-profit college accreditor, the Accrediting Council of 
Independent Colleges and Universities (ACICS). ACICS accredited 
Corinthian and ITT Tech to the day they went bankrupt.
    What steps has the Department taken since your decision to ensure 
that ACICS is in compliance with all standards for Federal recognition?
    Answer. The Secretary's decision included two areas of 
noncompliance--602.15(a)(2) and 602.15(a)(6)--that require a compliance 
report within 12 months. The Accreditation Group (AG), within the 
Office of Postsecondary Education, will process that compliance report 
per 602.32. The compliance report will be due November 21, 2019, and 
will be presented at the summer 2020 NACIQI meeting.
    The monitoring report addressing the issues below will also be due 
at the same time as the compliance report, but it will be a separate 
and independent of the compliance report. The monitoring report will be 
reviewed by AG staff.
    Monitoring areas:
  --602.15(a)(1)--Audited financial records and a staffing report 
        (Note: the audited financial records are required to be 
        submitted annually for 3 years.)
  --602.16(a)(1)(i)--An annual report on the function and effectiveness 
        of ACICS' Placement Verification Program (PVP).
  --602.16(a)(1)(vii)--An annual report on the work of ACICS' At Risk 
        Institutions Group (ARIG) and actions taken by the agency, if 
        any.
  --602.19(b)--An annual report on the work of ACICS' At Risk 
        Institutions Group (ARIG) and actions taken by the agency, if 
        any.
    Question. Please provide the authority on which you relied upon to 
reinstate ACICS while the agency was not in compliance with standards 
for Federal recognition.
    Answer. 34 CFR Sec. 602.36
    open textbooks pilot and compliance with congressional directive
    Question. Over the last two fiscal years, this Subcommittee--with 
the support of Chairman Blunt and Ranking Member Murray--has provided 
$10 million to an Open Textbooks Pilot to expand the use of open 
textbooks on college campuses to achieve savings for students. While 
this program may be small, it has energized students and faculty across 
the country who see open textbooks--free, high-quality alternatives to 
costly traditional textbooks--as key to reducing student debt and 
improving learning outcomes. Many students don't purchase required 
course materials because they are too costly. It puts them at an 
academic disadvantage and hits low-income, first-generation, and 
students of color hardest. So, on a bipartisan basis, Congress created 
this program. In fiscal year 2019, we included clear direction to the 
Department to award funds through a new grant competition and to fund 
at least 20 projects in order to engage additional institutions to help 
keep the momentum going. The Department ignored Congress--funding just 
two projects in fiscal year 2019 from the fiscal year 2018 slate of 
applications. On February 25, Ranking Member Murray and I sent you a 
letter expressing our extreme disappointment with the Department's 
decision to ignore clear Congressional directives. The Department's 
March 26 response failed to provide the full slate of unfunded 
applications from the Open Textbooks Pilot program competition 
conducted in fiscal year 2018 and all communications both within the 
Department and externally related to the Open Textbooks Pilot program.
    Please provide the information requested in #1 and #2 of our 
February 25 letter.
    Answer. While the Department declines to share all of the 
information described in #2 of your letter, as much of this information 
is deliberative, it previously explained in response to a Question for 
the Record from the Senate Appropriations hearing on the fiscal year 
2019 budget that it consulted a wide range of experts regarding the 
implementation of the pilot, including representatives of publishing 
companies, college book stores, the Task Force on Apprenticeship 
Expansion, the American Council of Community College Trustees, American 
Association of Community Colleges, the U.S. Chamber of Commerce 
Foundation, and other institutions of higher education that 
participated in conferences or meetings where Department staff were in 
attendance. With regard to the information described in #1 of your 
letter, the Department will follow up separately with a list of 
unfunded applicants.
    Question. If the fiscal year 2020 bill provides additional funds 
for the Open Textbooks Pilot, do you commit to holding a new grant 
competition to award those funds?
    Answer. If Congress provides funding again in fiscal year 2020 for 
the Open Textbook Pilot, the Department would conduct a new grant 
competition to award the funding that remains after first allocating 
the $900,575 needed to fully fund a grantee first awarded in fiscal 
year 2019.
    Question. Do you commit to funding multiple projects with those 
funds?
    Answer. In the event that the Department conducts an Open Textbook 
Pilot competition in fiscal year 2020, the Department would be required 
to first publish a Notice of Proposed Priorities for public comment, 
followed by a Notice of Final Priorities. Through this process, the 
Department would seek feedback from the field on the structure of the 
grant competition, including on the range of award sizes that can most 
effectively accomplish the objectives of this program. These public 
comments would inform the Department's approach to establishing the 
award size parameters in the competition.
    proposed reduction to child care access means parents in schools
    Question. Completing college is challenging under ordinary 
circumstances, but can be especially difficult for undergraduate 
parents. Ensuring undergraduate parents have access to high quality 
childcare can have a significant impact on college completion rates, 
which is why I'm concerned about the Administration's proposal to 
reduce funding for the Child Care Access Means Parents in Schools 
(CCAMPIS) program by 70 percent.
    What was the basis for the Administration's decision to seek this 
cut?
    Answer. The Administration remains committed to investing in child 
care, and the 2020 Budget focuses its increased investment in a new, 
one-time $1 billion investment through the Department of Health and 
Human Services to build the supply of child care and stimulate employer 
investment in child care. The 2020 Budget returns the Child Care Access 
Means Parents in School program (CCAMPIS) to its funding level before 
the increases enabled by the Bipartisan Budget Act of 2018. Despite 
this reduction, non-competing continuation grants to previous awardees 
would continue to be funded under the CCAMPIS program.
    Question. How many fewer undergraduate families would receive 
services at the funding level proposed by the President's Budget?
    Answer. The effect on the number of families to be affected by this 
reduction is unclear. Given the proposed reduction, some grantees may 
absorb the reduction to their non-competing continuation award by 
reducing participants while others may absorb the reduction by reducing 
the amount of the subsidies and/or services currently provided.
                                 ______
                                 
                Questions Submitted by Senator Jack Reed
    discharge of loans for veterans with total permanent disability
    Question. During the hearing, you indicated that you believed that 
the Department was taking steps to automatically discharge student 
loans for veterans with total and permanent disability under the data-
matching agreement you have with the Department of Veterans Affairs.
    Please provide the current timeline and actions taken to provide 
automatic discharges.
     Answer. The Department is assessing the feasibility of granting 
automatic Total and Permanent Disability (TPD) discharges based on a 
U.S. Department of Veterans Affairs (VA) data match for future 
implementation. If the Department determines that automatic discharges 
can happen upon receipt of the data from the VA, the Department will 
establish a timeline for implementation.
    The Department's current data matching agreement with the VA is 
aligned with the current process of sending TPD application materials 
to the identified veterans.
    Question. Also, please provide the following information about the 
implementation of the data-matching agreement. The number of veterans 
identified, and of those identified:
  --i. The number who have returned paperwork and have had discharges 
        granted;
  --ii. The number who have returned paperwork and have been denied;
  --iii. The number who have not returned paperwork;
  --iv. The number who are severely delinquent; and
  --v. The number who are in default
     Answer. As of December 2018, our match with the VA has identified 
more than 40,000 eligible veterans to whom we have sent TPD application 
materials. Of those identified:
  --i. 16,293 returned paperwork and had discharges granted;
  --ii. None have returned paperwork and been denied;
  --iii. 23,930 did not return paperwork;
  --iv. 20,511 serviced by the Department's Federal loan servicers were 
        30-269 days delinquent; and
  --v. 15,454 were in default
    Question. How many borrowers have matched two out of three data 
elements (out of SSN, name, and DOB) but not all three?
     Answer. Our current matching process with the VA matches on full 
Social Security number and name. If the match fails for either data 
element, it is not validated. Therefore, we do not capture the 
requested data
    Question. Has FSA contacted any borrowers who fail an SSN match to 
notify them of potential eligibility?
     Answer. The current match with the VA validates on a full Social 
Security number and name. The match fails if either data element is not 
validated. Currently, the Department does not review the matches that 
fail because non-matches may not be retained per the current Memorandum 
of Understanding with the VA. Note: The Department processes TPD 
requests from veterans who were not validated through the match, but 
who contact the Department on their own.
    Question. How many unique SSA TPD borrowers and VA borrowers, 
separately listed, have had their loans discharged as a result of 
receiving a letter (alternatively, number of discharges via each method 
since the beginning of the match program)? Please indicate total number 
of borrowers discharged, total number of loans discharged, and total 
dollar amount discharged.
    Answer. There are 193,603 Social Security Administration (SSA)-
discharged borrowers and 614,258 SSA loans discharged for a total 
amount of $5,433,603,853.
    There are 16,293 Veterans Administration (VA)-discharged borrowers 
and 68,274 loans discharged for a total amount of $455,656,664.
         enforcement of department cash management regulations.
    Question. In December of last year, I sent you a letter along with 
several colleagues asking for additional information about actions the 
Department was taking to enforce its cash management regulations in 
light of the CFPB analysis of campus financial service product 
agreements. We have not received a response and ask that you provide 
answers to the questions from the letter for the record. The questions 
are as follows:
    1. Has the Department reviewed any of the Tier 1 and Tier 2 
financial agreements between institutions of higher education and 
financial service providers identified in the CFPB's analysis as having 
higher than average fees, including but not limited to Wells Fargo, for 
violating the requirement that they be ``not inconsistent with the best 
financial interests of students?''
    2. Has the Department identified any current institution's cash 
management agreements as deficient in meeting the standard of the 
``best financial interests of students?'' If so, please provide a list 
of deficient agreements and rationale for their deficient 
identification.
    3. What actions has the Department taken to ensure that 
institutions correct any deficiencies?
    4. Please provide the criteria the Department uses to determine 
that the agreements meet the requirement of the ``best financial 
interests of students.''
    5. Have any institutions of higher education, that have agreements 
with Wells Fargo, provided the Department with evidence demonstrating 
that they are meeting the requirement that institutions conduct ``due 
diligence reviews at least every 2 years, to ascertain whether the fees 
imposed under the accounts are, considered as a whole, consistent with 
or lower than prevailing market rates; and all contracts for the 
marketing or offering of the accounts to the institution's students 
provide for termination of the arrangement at the discretion of the 
institution based on complaints received from students or a 
determination by the institution that the fees assessed under the 
account are not consistent with or are above prevailing market rates''?
    6. How do the Department's reviews of the financial agreements 
ensure that there are sufficient safeguards in any revenue sharing or 
incentive structures to guard against conflicts of interest and 
excessive fees for student account holders?
    7. What steps has the Department taken to verify that all 
institutions are reporting the required information?
    8. What resources does the Department provide to institutions of 
higher education to help them identify financial institutions that have 
entered into consent orders or settlements with Federal regulators 
related to consumer practices, or have established patterns of behavior 
that could put students at risk of financial harm? Please provide 
copies of said resources or guidance.
    Answer:
    1. The Department has taken important steps in monitoring 
compliance under its cash management regulations. Between December 2013 
and December 2015, the Department conducted five program reviews of 
financial services companies that contracted with institutions of 
higher education. Following these program reviews, the Department 
assessed liabilities exceeding $6.4 million based on findings 
identified at Higher One, Inc., and Wells Fargo Bank. Additionally, in 
2019, the Department issued a cease and desist letter to BankMobile (a 
subsidiary of Customers Bank, which owns the entity previously known as 
Higher One, Inc.) for noncompliance with the cash management 
regulations related to improper fees and violation of the student 
choice provisions. The Department required BankMobile to reimburse any 
student who had been charged improper fees, and BankMobile complied 
with the Department's instructions.
    The Department will begin evaluating institutional compliance with 
the due diligence review requirement as part of its program review 
procedures on October 1, 2019. They were not performed earlier due to 
the relationship between the due diligence requirement and the 
disclosure of mean/median fees requirement, which requires the 
institution to calculate and disclose the mean and median costs of 
contracts with financial services companies. The disclosure of mean/
median fees requirement became effective September 1, 2017. 
Institutions rely on this information to conduct adequate due diligence 
reviews, which are required every 2 years. Thus, the Department 
determined that October 1, 2019, the start of the first review cycle 
that follows a full 2-year period after September 1, 2017, was the most 
appropriate time to begin incorporating institutional compliance with 
the due diligence review requirement as part of program reviews.
    2. The Department will begin evaluating institutional compliance 
with the due diligence review requirement as part of program review 
procedures beginning October 1, 2019.
    3. Please see the Department's response to Question 2 above.
    4. In order to meet the requirements under these new regulatory 
provisions regarding the best financial interests of the students, an 
institution must conduct due diligence reviews at least every 2 years 
to determine whether the fees imposed under an institution's 
arrangement with a financial services company are consistent with or 
below prevailing market rates. The institution must also enact 
contracts that allow the institution to terminate the arrangement based 
on complaints from students or an institution's determination that the 
fees charged are not consistent with market rates.
    5. Please see the Department's response to Question 2 above.
    6. Please see the Department's response to Question 2 above.
    7. In 2016, the Department published two electronic announcements 
explaining that institutions are required to post on their website 
copies of any agreements they have with a financial services company 
that provides students with Title IV credit balance funds. The 
electronic announcements also reminded institutions that they must 
provide the Department with the URL for the institutionally posted 
agreements for inclusion in the Department's publicly available 
centralized database. The database is available at StudentAid.gov/sa/
about/data-center/school/cash-management-contracts.
    In addition, the Department includes information about the 
institutional disclosure and reporting requirements in the Federal 
Student Aid Handbook and conducts institutional training presentations 
to provide information about the disclosure and reporting requirements 
for Tier 1 or Tier 2 arrangements. The Office of Inspector General's 
Guide for Audits of Proprietary Schools and For Compliance Attestation 
Engagements of Third Party Servicers Administering Title IV Programs 
(OIG Audit Guide) addressed requirements for disclosure and reporting 
of contract information for the first time in September 2016. 
Separately, as part of its program review procedures, the Department 
will also review an institution's contractual agreements with financial 
services companies, which will include a review of the disclosure and 
reporting requirements. The Department will begin evaluating 
institutional compliance with the due diligence review requirement as 
part of program review procedures in October 1, 2019.
    8. As described above, the cash management regulations require 
institutions to conduct due diligence reviews to determine whether the 
terms of financial accounts offered pursuant to a Tier 1 or Tier 2 
arrangement are not inconsistent with the best financial interests of 
their students. The Department believes that institutions, which 
independently contract with financial services providers for Tier 1 or 
Tier 2 services, have the expertise to make appropriate determinations 
regarding market rates and their students' best interests.
    The Department does not believe it is in the best position to 
provide institutions information regarding particular types of consumer 
practices at financial services providers. However, institutions and 
Tier 1 financial services providers are subject to the Department's 
enforcement actions associated with cash management regulatory 
noncompliance.
  teacher and principal preparation and professional development and 
          intent of education innovation and research program
    Question. The Administration's budget request would provide no 
funding for the teacher and principal preparation and professional 
development programs under Title II of the Higher Education Act and 
Title II of the Every Student Succeeds Act and instead proposes to 
establish a $200 million voucher program for teachers.
    Please explain how this proposal complies with the intent of the 
Education Innovation and Research program and its evidentiary 
standards. What is the rationale for allocating two-thirds of the 
requested funding for Education Innovation and Research to a proposal 
that is not backed by evidence?
    Answer. The Education Innovation and Research program is primarily 
designed to build evidence for effective educational interventions 
rather than merely fund proven activities. Consequently, the program 
specifically authorizes early-phase start-up funding to test promising 
innovations that are willing to undergo rigorous evaluation. The 
Administration believes that empowering teachers to select the 
professional development activities that will help them meet the unique 
needs of the students in their classrooms holds significant promise for 
improving the effectiveness of the multi-billion investment in teacher 
professional development made annually by States and school districts.
effect of replacing title ii programs with eir professional development 
                                vouchers
    Question. Please provide an analysis of how many teachers and 
principals are currently participating in these Title II programs 
compared to how many would receive vouchers under your proposal.
    What are the evaluation plans for measuring the effectiveness of 
these vouchers?
    How does the administration propose to address the preparation and 
professional development needs of principals?
    How will a voucher for individual teachers enable schools to 
provide professional development to meet instructional goals?
    Answer. The Department does not have data on the number of teachers 
and principals currently participating in Title II-funded programs; 
rather, it has data on the use of Title II-A funds showing that in 
school year 2015-2016, the latest year for which information is 
available, 66 percent of districts used funds for professional 
development for teachers and paraprofessionals and 35 percent used 
funds for class size reduction (52 percent and 25 percent, 
respectively, of funds). School districts also report that, using funds 
from Federal, State, and local sources, they provide a range of 
professional development activities to as many as 2.5 million teachers 
annually.
    However, research consistently shows that current professional 
development practices do not yield improved student achievement, 
leading the Department's Institute of Education Sciences to conclude in 
a 2016 evaluation brief that ``the field does not yet fully understand 
how to ensure that teacher PD leads to measurable improvements in 
student learning.'' The EIR voucher proposal is intended to help 
address this lack of understanding.
    Grantees under the EIR program must conduct rigorous evaluations of 
their projects, and the Department provides both funding and technical 
assistance to ensure that the results of these evaluations meet the 
standards of the What Works Clearinghouse.
    Grantees would have discretion to include principals and other 
school leaders in their voucher projects, and also could target 
vouchers to support certain instructional goals, such as improving 
achievement in STEM subjects or support school improvement efforts.
                            adult education
    Question. Please provide additional information about your proposal 
to create a State formula grant program for pre-apprenticeship programs 
in the national activities account for adult education.
    How is the Department plan to define pre-apprenticeship?
    Answer. A pre-apprenticeship is a program designed to prepare 
individuals with the reading, mathematics, and employability skills 
needed to enter and succeed in an apprenticeship program with which it 
has a documented partnership.
    Question. How much would each State receive under this proposal?
    Answer. Please see below for a table estimating the allocation for 
each State.

------------------------------------------------------------------------
                                                            Estimated
                         State                             Allocation
                                                         (whole dollars)
------------------------------------------------------------------------
Alabama...............................................           925,429
Alaska................................................           390,580
Arizona...............................................         1,374,634
Arkansas..............................................           643,701
California............................................         6,706,750
Colorado..............................................           872,027
Connecticut...........................................           781,079
Delaware..............................................           381,254
District of Columbia..................................           386,031
Florida...............................................         3,093,534
Georgia...............................................         1,771,821
Hawaii................................................           363,551
Idaho.................................................           427,810
Illinois..............................................         2,145,405
Indiana...............................................         1,087,174
Iowa..................................................           562,846
Kansas................................................           587,183
Kentucky..............................................           911,774
Louisiana.............................................         1,007,703
Maine.................................................           395,252
Maryland..............................................         1,128,962
Massachusetts.........................................         1,131,276
Michigan..............................................         1,620,096
Minnesota.............................................           844,878
Mississippi...........................................           718,852
Missouri..............................................           997,207
Montana...............................................           376,728
Nebraska..............................................           450,159
Nevada................................................           743,931
New Hampshire.........................................           383,304
New Jersey............................................         1,541,242
New Mexico............................................           595,544
New York..............................................         3,352,624
North Carolina........................................         1,728,865
North Dakota..........................................           322,759
Ohio..................................................         1,939,071
Oklahoma..............................................           771,884
Oregon................................................           805,248
Pennsylvania..........................................         2,083,228
Puerto Rico...........................................         1,080,934
Rhode Island..........................................           412,050
South Carolina........................................           930,258
South Dakota..........................................           348,516
Tennessee.............................................         1,116,448
Texas.................................................         4,571,668
Utah..................................................           568,820
Vermont...............................................           315,699
Virginia..............................................         1,246,048
Washington............................................         1,324,471
West Virginia.........................................           543,399
Wisconsin.............................................           870,293
Wyoming...............................................           320,000
                                                       -----------------
  Total...............................................        60,000,000
------------------------------------------------------------------------


    Question. Why did the Department decide to take a formula grant 
approach rather than request additional national activity funds for a 
State-level competitive grant for this purpose?
    Answer. As labor and job markets vary from State to State, the 
Administration believes it is appropriate for each State to have the 
opportunity to explore approaches to pre-apprenticeships.
    Question. How does the Department address concerns that the 
proposed, drastic cuts to the regular State grant program will 
undermine States' capacity to implement successful pre-apprenticeship 
programs?
    Answer. As Adult Education State Grants are primarily spent on the 
local level by eligible providers rather than State-level activities, 
the Administration does not believe the proposed reduction in that 
program would cause a significant impediment to State administration 
and oversight of successful pre-apprenticeship programs.
                                 ______
                                 
             Questions Submitted by Senator Jeanne Shaheen
         effect of nextgen transition on borrowers and defaults
    Question. The Department is in the process of restructuring its 
contracts with student loan servicers through its Next Generation 
Processing and Servicing, or ``NextGen'' plan. Your current proposal 
suggests you plan to transfer the servicing of all borrowers and all 
loans in a very short window of time and then potentially move those 
borrowers once again in the future.
    How has the Department prepared for the impact of these changes on 
borrowers?
     Answer. Borrowers will be contacted throughout the transition 
period to ensure they are informed of what is happening and when. The 
new interface the borrowers will use will be in place to provide real-
time responses to borrower inquiries prior to and after the move to the 
updated servicing platform. Customer service representatives will be 
thoroughly trained and ready to understand and assist with questions 
from borrowers during the transition period.
    Question. How will you ensure that the process does not increase 
defaults?
    Answer. Special attention will be paid to borrowers who are 
delinquent and/or nearing early stages of defaulting during the 
transition period. Expanded outreach to these borrowers--providing 
solutions to resolve delinquency--will be provided to borrowers via an 
easy-to-use and understand interface.
               extension of existing servicing contracts
    Question. The nine current contracts with loan servicers end in 
June and September of this year. Yet, the Department seems no closer to 
finalizing new contracts in light of repeated cancelations and 
modifications in the procurement process.
    Do you plan to extend the current contracts to avoid disruption for 
tens of millions of student loan borrowers?
     Answer. The Department extended the contracts of the four Title IV 
Additional Servicers (TIVAS) for 6 months (until Dec. 15, 2019). We 
continue to review our plans for the remaining servicing contracts. We 
remain committed to Next Gen FSA's goals and objectives and are 
confident in the initiative's ultimate success.
    Question. For how long will the current contracts be extended?
    Answer. See answer to a, above.
        timeline for phases and components of nextgen contracts
    Question. When do you plan to award each phase and component of the 
new NextGen contracts?
    Answer. The Digital Customer Care Solution was awarded in February 
2019. The Optimal Processing Solution (OPS), the Enhanced Processing 
Solution (EPS) and the Business Process Operations (BPO) solicitations 
were issued in January 2019. The planned award date for EPS is spring/
summer 2019. The planned award date for OPS and BPO is the fall of 
2019. Borrower accounts were to begin migration shortly after the award 
of EPS. All dates are tentative as all three of these solicitations are 
currently under protest.
           nextgen and promoting competition among servicers
    Question. Congress has repeatedly included appropriations bill 
language requiring competition among servicers at all stages of the 
student loan servicing process and allocation of loans to servicers 
based on their performance. How does your NextGen proposal promote 
competition among student loan servicers to drive better performance 
for borrowers and increase servicer accountability?
    Answer. Consistent with the language in the Appropriations Act, the 
Department plans to award multiple contracts for business process 
operations providers. These contracts will contain explicit performance 
metrics and related standards; vendors will compete based on their 
performance against these metrics, which will be used to assign new 
borrower accounts to each vendor. In addition, FSA will include 
explicit disincentives for failure to meet or exceed performance 
standards, up to and including contract termination for consistent 
failure to perform.
      teach grant conversions to loans and reconversions to grants
    Question. Please provide information on the TEACH Grant recipients 
who had their grants converted to loans who have had those loans fully 
reconverted back to grants according to the Department's ``TEACH Grant 
Reconsideration Process'' announced on December 10, 2018 and January 
31, 2019.
    What is the total number of unique recipients and total amount of 
loans reconverted?
     Answer. As of April 21, 2019, 2,327 TEACH Grant recipients have 
been approved for reconsideration. Of these 2,327 recipients, 939 
recipients with 1,982 grants totaling $5,831,851.57 have been 
reinstated.
    Question. What is the total amount of any payments returned?
     Answer. As of April 30, 2019, FedLoan Servicing has issued refunds 
in the amount of approximately $320,000 to TEACH Grant recipients whose 
loans were reinstated back to grants. Additionally, FedLoan Servicing 
has re-applied funds in the amount of approximately $663,000 to other 
Direct Loans held by TEACH Grant recipients.
    Question. How many unique recipients received a correction of 
negative credit reporting?
     Answer. The Department does not have the requested data. For TEACH 
Grant recipients--who failed to meet the program requirements, but were 
offered the opportunity to request consideration to have their Direct 
Unsubsidized Loan reconverted to a TEACH Grant--the Department provides 
updated information to credit reporting agencies once the loan has been 
reconverted to a grant.
    Question. Please provide any analysis, findings, or research from 
the Department on the primary reasons why TEACH Grant recipients' 
grants have been converted to loans, including conversions that 
occurred either due to (a) student loan servicer error, or (b) a 
recipient's failure to comply with the program's recertification 
requirements.
     Answer. A 2015 report by the Government Accountability Office 
(GAO) found that large numbers of TEACH Grant recipients were not 
meeting program requirements, such as teaching in a qualifying school 
and submitting the required annual certification form. The report also 
identified several issues with the program, including a lack of 
awareness about the program generally, confusion about program 
requirements, and the need for improved program management. Most 
significantly, the report found that 2,252 TEACH Grant recipients 
previously had their grants erroneously converted to loans by the 
previous TEACH servicer, potentially as a result of servicer error.
    Additionally, the Department asked FedLoan to perform a review of 
all TEACH grants that were converted to loans since the program's 
inception to identify any others that may have been improperly 
converted by the previous servicer. This review identified 10,776 
recipients that may have been converted in error. Beginning in 2015, 
FedLoan reached out to these recipients directly by letter and e-mail 
to give them the opportunity to have their loans reinstated to grants, 
which resulted in 1,671 recipients being successfully reinstated. The 
majority of the remainder of the recipients did not respond to 
FedLoan's outreach.
    Furthermore, Department data shows that top three reasons for TEACH 
Grant conversions from 2013 to 2018 were: no response from the TEACH 
Grant recipient to certification requests, voluntary request for 
conversion from the TEACH Grant recipient, and late response from the 
TEACH Grant recipient to certification requests.
    As of April 9, 2019, approximately 17,210 TEACH Grants were 
converted due to voluntary request for conversion from the TEACH Grant 
recipient and approximately 114,750 TEACH Grants were converted due to 
a recipient's failure to meet program requirements. This includes 
failing to meet the program's certification requirements and failing to 
meet the minimum number of years of teaching within the period allowed 
by the authorizing statute. These two cohorts are not mutually 
exclusive as a TEACH Grant may be counted in more than one category. 
For example, a TEACH Grant may convert to a loan more than once and a 
TEACH Grant may convert for more than one reason.
    Question. Please provide information on the repayment status of 
TEACH Grant recipients who have experienced a grant-to-loan conversion, 
including the number who are current, delinquent, or in default, and 
disaggregated by State.
    Answer. See attached for the status of TEACH grant recipients who 
have active loans resulting from TEACH Grant conversion.


                                 ______
                                 
              Questions Submitted by Senator Jeff Merkley
                 borrower defense claim review platform
    Question. Regarding the new borrower defense claim review platform 
described in the Department's 2018 fourth quarter report:
  --a. What is the status of implementation of the change to the 
        platform or software used to review borrower defense claims 
        since January 20, 2017?
  --b. What are the specific benefits provided by the new platform?
  --c. How much funding has been allocated through contracts or other 
        means to the new review platform?
    Answer.
  --a. In summer 2018, the Department began accepting new borrower 
        defense applications claims through the new customer engagement 
        platform. On February 25, 2019, the Department completed the 
        last migration of data from its legacy system to the new 
        platform. The new platform is now operational and allows the 
        Department to more efficiently process--in one secure 
        location--borrower defense documents and evidence. The platform 
        requires new enhancements to comply with the 2016 regulations, 
        which the Department is working diligently to implement. Future 
        enhancements may be required as a result of new regulations, to 
        improve the borrower experience, or because of routine 
        maintenance.
  --b. The new customer engagement platform allows the Department to 
        enhance the borrower experience, improve application 
        processing, and increase efficiency of operations.
    Specific platform benefits classified by these three major 
improvement areas include:
  --Enhance the borrower experience
  --Added online features for borrowers, such as the ability to use an 
        FSA ID to submit applications, upload digital documents, save a 
        `draft' of an application, view submitted application 
        materials, and track the status of an application
  --Simplified the online application process that more clearly 
        indicates which forms are required based on a borrower's 
        specific circumstances
  --Improved data validation rules for online forms to assist the 
        borrower in submitting a ``complete'' application
  --Enabled bilingual capabilities
  --Improve application processing
  --Improved ability to identify duplicate borrower defense 
        applications and applicants
  --Created ability to merge the borrower's correspondence, documents, 
        and application in a single platform
  --Improved process to more quickly identify and contact borrowers 
        with incomplete applications
  --Increase efficiency of operations
  --Streamlined intake process to more quickly place borrowers into 
        forbearance or stopped collection activity status, if requested 
        by the borrower
  --Enabled future capabilities to support regulatory and operational 
        changes.
  --c. The Department is contractually obligated through September 30, 
        2019, to spend approximately $4 million to establish the new 
        borrower defense customer engagement platform, migrate the 
        existing applications from the legacy system to the new 
        platform, purchase new licenses to support users, and establish 
        a new engagement model that provides customer support. As of 
        April 23, 2019, the Department has spent approximately $1.7 
        million of the $4 million obligated.
relationship and communication with state attorneys general on borrower 
                                defense
    Question. Please provide the following information regarding the 
Department's relationship and communication with State attorneys 
general regarding borrower defense:
    Has there been any formal or informal directive, memorandum, 
guidance, or policy issued since January 20, 2017 regarding a change in 
the Department's historical relationship with State attorneys general 
(including but not limited to limiting contact or collaboration) for 
reviewing or analyzing borrower defense claims or the underlying 
evidence of such claims? If so, please provide documentation of the 
change in policy.
    Answer. The Department does not have a formal relationship with 
States' attorneys general regarding the enforcement of Borrower Defense 
regulations. On November 1, 2016, the Department of Education published 
a final Rule concerning borrower defense to repayment and other related 
matters in the Federal Register (81 Fed. Reg. 75,926). The original 
effective date (July 1, 2017) of the Rule was delayed by the 
Department, but by order of the U.S. District Court for the District of 
Columbia in the case Bauer v. DeVos, No.17-cv-1330 (D.D.C. Jul. 6, 
2017), the 2016 Rule was required to take effect retroactively. In 
bringing a borrower defense claim under the regulations before the 2016 
Rule, students are able to provide any relevant evidence, including 
evidence that may been collected by a State attorney general. Under the 
group process, which was created as part of the 2016 Rule, the 
Department considers all relevant evidence to a group claim, including 
evidence that may be collected by a State attorney general.
evaluating state attorneys general and regulator referrals with respect 
                             to 685.222(f)
    Question. The Department stated that group process under 685.222(f) 
is not applicable to most claims submitted by State attorneys general. 
Yet, State attorneys general have referred cases affecting groups of 
borrowers for which they have evidence of misrepresentations that give 
rise to causes of action under State law. Please provide details for 
each State attorney general or regulator referral, including: the 
reason the Department believes the referral should not be handled by 
the group procedures laid out in the 2016 final borrower defense rule 
in Sec. 685.222(f) through Sec. 685.222(h); the number of borrowers 
impacted by each referral; and the State of origin for each referral.
    Answer. The Borrower Defense to Repayment Regulations promulgated 
in 2016 will impact the adjudication of loans made after July 1, 2017. 
Under this regulation, the Secretary has the authority to initiate a 
group borrower defense to repayment claim based on the proven findings 
of State AGs--not simply allegations or claims, but allegations that 
result in an admission or a judgment on the merits--and will do so when 
appropriate. However, the Secretary must still adjudicate each claim 
separately because she must determine whether or not the borrower 
relied on the misrepresentation in making a decision and if the 
borrower was harmed.
    Enclosed table ``Durbin Question 6.4 (Updated 8.6.2019)'' provides 
a list of all attorneys general submissions related to groups of 
borrowers for which the attorneys general seek a borrower defense 
discharge as of August 6, 2019. The table includes the submission date, 
the attorneys general, the school, and the diploma program, if 
applicable. If a diploma program is not provided for a submission, the 
submission was not limited to a specific program. It is within the 
Secretary's discretion to decide whether a group discharge process will 
be applied to a group of borrowers, and policies and procedures that 
will apply to the group discharge process are under development. The 
Department cannot provide the number of borrowers that will be included 
in a certain group unless and until a group is established and defined 
by the Secretary. However, individual applications submitted by 
attorneys general have been and will continue to be considered under 
the individual application review process.


    At this time, the Department cannot narrow its reporting to 
applications submitted by attorneys general. Policies, procedures, and 
platform functionality that will apply to the group discharge process 
are under development. The platform currently does not track which 
applications are submitted by attorneys general. When all systems and 
processes are updated, the platform will track which applications are 
included in a group discharge process for the groups to be defined by 
the Secretary.
    review of state attorneys general submissions and referrals for 
                            borrower defense
    Question. Has the Department reviewed all submissions or referrals 
from State attorneys general that have been received as of at least 6 
months ago?
    Answer. No. Due to the influx of applications associated with the 
conduct of Corinthian Colleges, Inc. and limited resources focusing on 
applications from borrowers who attended Corinthian Colleges, the 
Department has not yet reviewed all submissions of evidence of borrower 
defense-related conduct from State attorneys general that have been 
received as of at least 6 months ago.
denials of borrower defense claims including evidence provided by state 
                           attorneys general
    Question. Has the Department denied any borrower defense claim(s) 
that contained evidence or information provided by State attorneys 
general or State regulators? If yes, please describe the situation(s).
    Answer. No, the Department has made no such denials.
    temporary expanded public service loan forgiveness (tepslf) and 
                         servicer communication
    Question. Please provide a copy of the Change Request made to 
FedLoan Servicing to implement the Temporary Expanded Public Service 
Loan Forgiveness (TEPSLF), including all communications between Federal 
Student Aid and Pennsylvania Higher Education Assistance Agency (PHEAA) 
related to the terms of such a change request, the specific services 
performed under this change request, and the compensation provided to 
FedLoan Servicing to perform these services.
    Answer. Copies of the five change requests submitted to FedLoan to 
support implementation of TEPSLF are enclosed. Employee names and email 
addresses have been redacted.






















             oversight of fedloan implementation of tepslf
    Question. Please describe the process put in place to ensure 
adequate oversight over FedLoan Servicing's implementation of this 
contract, including documentation of any on-site reviews, call reviews, 
or other monitoring performed by Federal Student Aid related to TEPSLF.
    Answer. Throughout the implementation process, FSA required FedLoan 
to provide a variety of documentation to ensure they were meeting FSA's 
requirements as specified in change requests 4639, 4640, 4696, 4748, 
and 4875. Additionally, FSA conducts the following on an ongoing basis:
  --FSA reviews a sample of denied TEPSLF requests to ensure accuracy. 
        FSA also reviews all loans determined by FedLoan to be eligible 
        for TEPSLF.
  --FSA regularly monitors FedLoan's reporting activity to ensure 
        discharged loans are reported to National Student Loan Data 
        System (NSLDS) and the Financial Management System (FMS) 
        correctly.
  --FSA requires FedLoan to provide regular TEPSLF reporting, which 
        allows FSA to create weekly and monthly summary reports that 
        are shared internally with FSA management and related staff.
  --FSA conducts periodic meetings with FedLoan to discuss program 
        status, issues, and needed improvements, and communicates with 
        FedLoan via email/phone on an ongoing basis as needed.
  --FSA conducts TEPSLF call monitoring in association with PSLF call 
        monitoring (the programs share the same phone number for 
        borrower support). Any issues found during this monitoring 
        process are escalated for resolution as needed.
  --FSA also regularly monitors the overall cost of the TEPSLF program, 
        including implementation costs, ongoing monthly costs, and 
        overall discharge amounts in relation the $700 million funding 
        limit.
        contract changes to ensure fedloan publicizing of tepslf
    Question. Please describe the specific changes made to FedLoan 
Servicing's contract to publicize the availability of TEPSLF, including 
steps to ensure adequate outreach to borrowers who applied for and were 
denied PSLF.
    Answer. FedLoan's website was updated to include a link to 
information about the TEPSLF opportunity. FedLoan representatives were 
also educated about the opportunity and given guidance on how to 
respond to inquiries about it, including directing borrowers to FSA's 
StudentAid.gov website, the primary location for information about 
TEPSLF, where applicable. FedLoan personnel were also provided 
information and training about the PSLF Help Tool to further support 
borrowers with questions about PSLF and TEPSLF.
    As noted above, a change request was made requiring FedLoan to 
submit a weekly report to FSA of borrowers who had previously been 
denied PSLF. This allows FSA to conduct targeted outreach to this 
specific group of borrowers who may be eligible for TEPSLF. FedLoan 
also conducts direct outreach to borrowers who were previously denied 
TEPSLF but have since submitted additional employment information. 
These borrowers are encouraged to resubmit their TEPSLF request if they 
believe they now qualify as a result of providing the additional 
employment information.
  number of borrowers receiving loan forgiveness under income-driven 
                               repayment
    Question. How many borrowers enrolled in any income-driven 
repayment plans have reached the overall cap on their student loan 
payments (i.e. 20 or 25 years) and have received loan forgiveness, in 
aggregate and disaggregated by State?
    Answer. As of April 16, 2019, 16 borrowers enrolled in any income-
driven repayment plan have reached the overall cap on their student 
loan payments with a total discharged amount of $453,525. Due to 
privacy restrictions, this number cannot be disaggregated by State.
  median amount of forgiveness provided under income-driven repayment
    Question. What is the median amount of loan forgiveness provided to 
borrowers in IDR plans who have reached the overall cap on their 
student loan payments (i.e. 20 or 25 years), in aggregate and 
disaggregated by specific repayment plan?
    Answer. The median amount of loan forgiveness provided to borrowers 
in IDR plans who have reached the overall cap on their student loan 
payments (i.e., 20 or 25 years) is $14,495. All 16 borrowers were in 
the REPAYE plan at the time of IDR forgiveness.
         resources allocated to valuing student loan portfolio
    Question. What resources, including staffing, are being applied to 
any activity associated with valuing of the Federal student loan 
portfolio?
    Answer. Resources applied to this activity are provided in the 
Student Aid Administration (SAA) account. The Office of Finance and 
Operations, Office of Budget Service, Cost Estimation and Analysis 
Division is responsible for developing full-cost estimates for the 
Federal Family Education Loan (FFEL) and Ford Direct Student Loan 
(FDSL) programs. The staffing level for this division as of March 30, 
2019 was 16. Pages Y-30 through Y-32 of the fiscal year 2020 SAA 
Congressional Justification provide detail on the non-pay resources 
used to value the Federal student loan portfolio. This justification 
can be found online at https://www2.ed.gov/about/overview/budget/
budget20/justifications/y-saa.pdf.
        student loan servicing non-compliance tracking database
    Question. In response to a recent OIG report on student loan 
servicing, the Department claimed ``all instances of non-compliance are 
tracked in an internal tracking database'' for Federal student loan 
servicers and this tracking mechanism has been in place for ``several 
years.''
    Please provide:
  --i. the name of the database;
  --ii. the date the database was implemented and the dates and 
        descriptions of any subsequent modifications, including any 
        changes to add instances of noncompliance regardless of 
        resolution classification;
  --iii. a list of the indicators or metrics of noncompliance the 
        database currently tracks; and
  --iv. a copy of the database.
    Answer. FSA captures all known instances of noncompliance in an 
internal issues tracking database known as the SQL Server Database. 
Servicers are now required to submit issue tracking items for all 
observations found during monitoring events--even those resolved during 
the event with no further action required by either the servicer or 
FSA. These items remain in the tracking database to be used for 
reference and other analytical purposes.
    The original database was implemented in December 2011. A 
significant modification was made in September 2013 to expand the scope 
of items tracked in the database. Another significant modification was 
made in May 2018 to allow the database to generate Call Monitoring 
Reports, which assist FSA with its monitoring of individual servicers' 
call volume and quality. FSA conducts routine maintenance and makes 
minor changes to the database on an ongoing basis as needed. Although 
we are unable to provide a full copy of the database because it 
contains personally identifiable and other sensitive information, 
enclosed are screenshots that show the various indicators and metrics 
currently tracked in the database.




    Question. Please provide copies of Department policies and 
procedures that explain how the Department incorporates information 
from the tracking database to ensure servicer compliance with Federal 
requirements.
    Answer. All known instances of noncompliance are tracked and remain 
open in the issues tracking database until resolution. A copy of the 
Department's issue tracker procedures is enclosed.












    Question. The OIG report notes the Department's database on 
compliance did not record instances of noncompliance when a servicer 
implemented an acceptable remedy during the review period. For the 
review period of the OIG's report, in how many instances was 
noncompliance found but not recorded in the database for each servicer, 
and what would the rate of noncompliance have been for each servicer, 
if these instances had been recorded?
    Answer. The data requested is not readily available in aggregate 
form because, as you note, the particular instances of noncompliance in 
question were not recorded in the issues tracking database because they 
were resolved during the monitoring event. Therefore, we are unable to 
calculate the requested noncompliance rate. Based on OIG's 
recommendation, and as noted above, FSA now requires that issue 
tracking items be submitted for all observations found during 
monitoring events, even those that were resolved during the event.
               trend analysis of servicer non-compliance
    Question. The Department claims it is already using data on 
noncompliance to analyze trends and assess servicer performance. Which 
specific trends related to compliance does the Department track for 
trend analysis, and how long has the Department tracked each trend? 
Please provide any trend analyses the Department has conducted.
    Answer. FSA uses the database to track a variety of issues, 
including instances of noncompliance that generally stem from 
regulatory or contractual infractions. In the event of such an 
infraction, remediation of the issue is monitored and tracked to 
completion in the database. In addition to the issues tracking 
database, FSA uses several other sources of information to ensure 
servicer compliance and inform trend analysis, including various 
reports from servicers and the National Student Loan Data System 
(NSLDS). Attached are two examples of trend analysis conducted by FSA 
to date.




























       referrals of servicer non-compliance to enforcement bodies
    Question. Please provide a list of all referrals of noncompliance 
the Department has made following compliance reviews of servicers to 
Federal, State, local, Tribal, or foreign agency or other public 
authority responsible for enforcing, investigating, or prosecuting 
violations of administrative, civil, criminal law, or regulation.
    Answer. The Department has made no such referrals.
     risk tolerance for servicer non-compliance and threshold for 
                           enforcement action
    Question. Please provide the Department's current risk tolerance in 
servicing, defined as the threshold of noncompliance that would compel 
the Department to take enforcement action, calculated both:
  --including all instances of noncompliance, including those for which 
        the servicer has implemented an acceptable remedy; and
  --including only the instances of noncompliance for which the 
        servicer has not implemented an acceptable remedy.
    Answer. The Department does not use a particular risk tolerance 
calculation in deciding whether to assess penalties against servicers 
for instances of noncompliance. FSA uses Corrective Action Plans (CAPs) 
to address remediation of servicing issues. Such issues are typically 
discovered through a monitoring event, on-site visit, or report by a 
servicer. CAPs are issued by FSA's Acquisitions Office, communicated in 
writing, and include a series of required steps to bring the servicer 
into compliance. A timeline is established for servicers to complete 
the necessary steps. Failure to comply may result in various penalties, 
including loss of loan volume, fines, and in extreme cases, termination 
of the servicer's contract with FSA. A variety of factors are taken 
into account when determining what penalty is appropriate, including 
the severity of the instance of noncompliance and/or whether it 
reflects a pattern of behavior over time. Next Gen FSA will greatly 
improve upon the current servicing model by explicitly tying vendor 
performance to clear and robust standards and metrics.
     improvements to oversight since oig review period of servicer 
                               compliance
    Question. The Department asserts it has made ``significant ongoing 
improvements'' to its ``oversight and monitoring policies and 
procedures'' since the review period of the OIG's report. What are the 
significant improvements to oversight and monitoring that have been 
implemented from October 1, 2017 to the present?
    Answer. The Department is continually enhancing its servicer 
monitoring system and has implemented several improvements to its 
oversight processes:
  --The servicer liaison team, which serves as the primary contact with 
        servicers overseeing day to day operations and identifying, 
        tracking and resolving issues that impact borrowers, has been 
        restructured to assign team members to specific areas, such as 
        repayment plans or delinquency and default, instead of to a 
        single servicer. This allows the Department to better utilize 
        its subject matter experts to ensure more focused monitoring 
        and oversight activities.
  --The Department has corrected programming errors with its Call 
        Monitoring Reports to ensure these reports provide thorough 
        performance metrics for use by the call monitoring team. The 
        servicer call monitoring team listens to samples of incoming 
        and outgoing calls and compares customer service representative 
        performance against a detailed checklist to ensure accuracy and 
        completeness.
  --Quality control measures have been added to the call monitoring 
        team's activities described above.
    Additionally, in late April, the Department began issuing letters 
to vendors regarding the failure of their call centers to promptly and 
effectively serve customers. The letters inform vendors that the 
Department expects the companies to consistently deliver high-quality 
service and that the Department will closely monitor their work. To 
date, four vendors have received letters and the Department anticipates 
issuing letters to the remaining vendors in early May. The Department 
held conference calls with three vendors in late April regarding their 
performance. Each vendor was notified that the FSA chief operating 
officer will visit during the month of May and was informed that, 
before the end of May, their `get well' plans must be implemented with 
demonstrated results; failure to do so will result in accounts being 
transferred to vendors who are successfully meeting established service 
levels.
    Finally, through the Next Gen FSA contracting process, FSA will 
further improve oversight by implementing clear performance standards 
for vendors and aggressive accountability measures.
                servicer feedback in reviews and audits
    Question. What policies or procedures does the Department employ to 
incorporate servicer feedback into the process for finalizing a review 
or audit, such as permitting servicers to see initial findings, and 
what steps are necessary to finalize a review?
    Answer. FSA shares information on noncompliance with servicers to 
aid them in improving customer service. Findings by FSA's servicer 
liaisons, service monitors, and servicer call monitoring teams are 
shared with servicers in meetings and/or by a written report so 
servicers can make the required corrections. Additionally, after FSA's 
Financial Institution Oversight Service Group conducts their review of 
a servicer's operational effectiveness, internal controls, and 
compliance, the results are shared with the servicer. FSA then tracks 
all noncompliance issues to ensure they are resolved. Copies of the 
Department's reporting and call monitoring procedures are enclosed.


















               oversight and accountability under nextgen
    Question. How do you plan to ensure that oversight and 
accountability are included in your plan to modernize student aid and 
student loan servicing? Please provide concrete examples of when and 
how the Department will act to protect students from subpar student 
loan servicing practices under the Next Generation Financial Services 
Environment (NextGen).
    Answer. Vendor and partner performance standards and accountability 
measures-- such as publicly available metrics around service quality 
with corresponding disincentives up to and including termination--will 
be built into Next Gen FSA contracts to ensure customers receive world-
class service while protecting taxpayer dollars. For example, section 
C.3.2 of the Next Gen FSA Business Process Operations (BPO) 
solicitation requires that successful offerors include performance 
management mechanisms in their proposed solutions to enable improved 
and ongoing achievement of metrics. Pursuant to the solicitation, BPO 
vendors will be measured monthly to determine their level of 
performance. `Green' vendors will keep their assigned customers and 
will also be assigned an equitable share of new customers. `Yellow' 
vendors will keep their assigned customers but will not receive new 
customers. If a vendor remains Yellow for more than 6 months, their 
contract may be terminated. If a vendor is `Red' for two consecutive 
months, a portion of their assigned customers will be reallocated to 
other vendors. If a vendor is Red for three consecutive months, their 
contract may be terminated.
         maintaining service standards in transition to nextgen
    Question. How will the Department ensure that servicers that 
ultimately do not get contracts under NextGen continue to provide a 
high standard of service to borrowers, as they will no longer have a 
financial incentive to serve those borrowers well?
    Answer. Throughout the Next Gen transition, the Department will 
monitor all vendors closely to ensure requirements are met and 
customers receive high-quality service. We will impose financial and 
other penalties as appropriate pursuant to the contracts to ensure 
service levels are maintained and, if necessary, will prioritize the 
transfer of accounts from any servicers that fail to perform.
            contractor performance measurement under nextgen
    Question. How will the Department measure servicer and contractor 
performance under NextGen?
    Answer. Section C.3.2 of the Next Gen FSA Business Process 
Operations (BPO) solicitation, enclosed, requires that successful 
offerors include performance management mechanisms in their proposed 
solutions to enable improved and ongoing achievement of metrics. 
Pursuant to the solicitation, BPO vendors will be measured monthly to 
determine their level of performance. `Green' vendors will keep their 
assigned customers and will also be assigned an equitable share of new 
customers. `Yellow' vendors will keep their assigned customers but will 
not receive new customers. If a vendor remains Yellow for more than 6 
months, their contract may be terminated. If a vendor is `Red' for two 
consecutive months, a portion of their assigned customers will be 
reallocated to other vendors. If a vendor is Red for three consecutive 
months, their contract may be terminated. https://beta.sam.gov/opp/
7ba2975c522413b564f21f854e0d94f1/view.
                    consumer engagement and nextgen
    Question. How does the Department plan to give consumers a voice in 
their repayment experiences under NextGen?
    Answer. The new borrower interface will request feedback from 
borrowers throughout the servicing process. Borrowers will be presented 
surveys after phone, mobile, and online experiences. The Department 
will hold focus groups and feedback sessions will be held with 
borrowers and other partners to gather information about what works and 
what does not. The Department will conduct extensive analysis to 
analyze feedback, complaints, and compliments to help determine future 
enhancements and improvements to all aspects of the servicing solution.
     course for borrowers to take corrective actions under nextgen
    Question. How will borrowers be able to take corrective actions 
under NextGen, given they will no longer know who their servicer is?
    Answer. Customers will be able to submit complaints through the 
Federal Student Aid Feedback System. While all future customer 
interactions will be under the FSA brand, FSA will have the information 
to quickly identify the vendor responsible for each customer 
interaction, as well as a process to address and resolve complaints.
                                 ______
                                 
              Questions Submitted by Senator Brian Schatz
      state investment and bipartisan efforts to address college 
                             affordability
    Question. College debt now exceeds $1.5 trillion dollars and is the 
highest category of consumer debt behind mortgages. You have stated 
that: ``Student loan debt is a tremendous problem for students and 
parents, with potentially catastrophic consequences on the Federal 
budget and the national deficit,'' and that ``the Federal Government 
has an important role to play in addressing student debt.'' You also 
stated that: ``The Department also encourages States to invest in 
public higher education.''
    Do you commit to working with both Democrats and Republicans to 
find solutions to college affordability and student loan debt?
     Answer. The Department stands ready to work with Members of 
Congress, on both sides of the aisle, to find solutions to college 
affordability and student loan debt challenges. The Department has 
undertaken several initiatives over the past several years to address 
student debt and is currently working to improve college transparency 
by publishing program-level student outcomes on the College Scorecard. 
We are also changing our vocabulary to no long refer to loans as 
``aid'' or ``awards'' and we have renamed the College Shopping Sheet to 
be the College Financing Plan to more clearly communicate to students 
that by taking loans, they have a repayment obligation.
    Question. What specific steps will you take to help increase State 
investment in public higher education?
    Answer. As you know, States play an integral role in improving 
access to higher education for students. However, States control the 
level of investment in public higher education institutions, and the 
Department does not have the authority to intervene.
        access to and financial aid for education for prisoners
    Question. The White House's principles for Higher Education Act 
reauthorization include a recommendation that: ``Congress should 
provide targeted Federal financial aid to prisoners eligible for 
release to improve employment outcomes and reduce recidivism.'' There 
are a number of quality prison education programs, including one run by 
your alma mater, Calvin College. Additionally, the Department continues 
to fund the Second Chance Pell pilot program.What is the Department 
doing to support these programs and increase access to education in 
prisons?
    Answer. Currently, individuals who are non-Federal prisoners who 
are incarcerated in State or local prisons do have access to Pell 
grants to support their continuing education while in prison. However, 
under our Second Chance Pell experiment, colleges and universities that 
are participants in the experiment may offer educational programs and 
opportunities to individuals incarcerated in Federal prisons who will 
have access to Pell grants to pay their tuition and fees. The 
Department has met with institutions that participate in the Second 
Change Pell experiment, including at the FSA Conference in November and 
in a subsequent meeting convened by the Vera Institute to learn about 
the additional challenges associated with providing educational 
opportunities to incarcerated individuals. As a result of those 
meetings, we are having discussions about what the Department could do 
to solve some of the challenges institutions told us about, including 
with regard to Pell Grant eligibility verification as well as the 
determination of student outcomes once they return to their 
communities.
    We have recently announced that we will fund a new cohort of Second 
Chance Pell Experimental Sites participants. Over the past three award 
years (AY 2016-2017 through AY 2018-2019 as of the end of March) we 
have approximately $54 million in Pell expenditures on Second Chance 
Pell.
   international education and foreign language studies domestic and 
                           overseas programs
    Question. International Education and Foreign Language Studies 
Domestic and Overseas programs are the foundation for ensuring a steady 
supply of graduates with expertise on world languages and cultures, 
international markets, and global issues. You justify cutting all 
funding for these programs by stating that they ``are better advanced 
by other agencies whose primary mission is national security.''
    Language programs run by other Federal agencies, such as the DoD 
Language Flagship Programs and the U.S Army's Foreign Area Officer 
program, depend on Department of Education language programs for 
resources, knowledge and faculty.
    Do you believe that improving national security is the only reason 
students should learn world languages?
    Answer. Improving national security is not the only reason students 
should learn world languages. Increasing global and cultural 
competencies for all students, learning from and with other countries 
to strengthen U.S. education, and engaging in education diplomacy are 
also important for an interconnected and competitive world.
    Question. How will you ensure quality language education if you cut 
funding to the Education programs that currently lead this charge?
    Answer. The Department will continue to work with other Federal 
agencies that offer similar and potentially duplicative programs to the 
Title VI Domestic and Fulbright-Hays Overseas programs. These include 
programs at the Department of State for undergraduate and graduate 
student study abroad in areas less commonly visited by U.S. students as 
well as undergraduate language flagship programs enabling students from 
all majors to work towards professional-level proficiency in foreign 
languages.
                                 ______
                                 
              Questions Submitted by Senator Tammy Baldwin
          timeline for program-level data in college scorecard
    Question. The Department has indicated that program-level data will 
soon be coming to the College Scorecard. Please provide a timeline by 
which the Department expects this to occur.
    Answer. The Department plans on providing program-level overall 
cumulative loan debt and earnings data by the end of calendar year 
2019. By the end of calendar year 2020, the Department plans on 
providing program-level cumulative loan debt data related to specific 
loan programs (i.e. parent PLUS and grad PLUS) and initial program-
level loan repayment and default rates.
   number of federal student aid applicants selected for verification
    Question. Please provide the number of Federal student aid 
applicants selected in each verification group.
    Answer. Please see the table below.

------------------------------------------------------------------------
            Verification Tracking Group                Applicant Count
------------------------------------------------------------------------
V1................................................             5,784,641
V4................................................               119,184
V5................................................               356,233
------------------------------------------------------------------------


    Please note the Verification Tracking Groups are based on the last 
non-rejected or signature reject transaction. Applications are from 
Award Year (AY) 2018.
 percent of pell-eligible federal student aid applicants selected for 
                              verification
    Question. Please provide the percent of Pell-eligible applicants 
that are selected for verification.
    Answer. The percent of Federal Pell Grant Program-eligible 
applicants selected for verification from AY 2018 is 52.5 percent. 
Please note that Pell Grant eligibility is based on the last aided 
transaction if the applicant received aid. Otherwise, it is based on 
the last transaction with an Expect Family Contribution (EFC) or 
signature reject EFC. If the last transaction was a signature reject 
EFC, the applicant is not considered Pell Grant eligible. Verification 
Tracking Groups are based on the last non-rejected or signature reject 
transaction.
  number of federal student aid applicants selected for verification 
                            groups v4 and v5
    Question. Please provide the number of Federal student aid 
applicants selected for verification in the V4 and V5 tracking groups, 
disaggregated by Identity Verification Results codes reported by 
institutions.
    Answer. The applicant counts include applicants selected for either 
the V4 or V5 tracking groups. Verification Result Code 6 was not 
available to be reported for AY 2017. If no institution reported a 
verification result for an applicant, the applicant is reported under 
the 'No Reporting for Applicant' group.

------------------------------------------------------------------------
                                              Applicant Counts
     Verification Result Code      -------------------------------------
                                         AY 2017            AY 2018
------------------------------------------------------------------------
1.................................            130,499            123,735
2.................................             40,946             47,980
3.................................             13,768             13,747
4.................................              3,673              2,079
5.................................            122,516            126,057
6.................................      Not Available              2,165
No Reporting for Applicant........            182,745            159,690
------------------------------------------------------------------------

percent of federal student aid applications whose verification changes 
           expected family contribution and pell eligibility
    Question. Please provide the percentage of applications for Federal 
student aid that, upon completion of verification, result in a change 
in EFC and Pell eligibility.
    Answer. Of those AY 2018 applicants that completed verification, 
31.1 percent had a change in the scheduled Federal Pell Grant award. 
The percentage excludes applicants selected for verification based on a 
transaction that was rejected due to missing signatures or where the 
aided transaction was rejected due to missing signatures. The 
percentage also only includes applicants selected for V1 or V5 tracking 
groups. Applicants were determined to have completed verification based 
on whether they received a Federal Pell Grant or a subsidized Direct 
Loan.
federal student aid applicants selected for verification and subsequent 
                       grant or loan disbursement
    Question. Please provide the percentage of applicants selected for 
verification of Federal student aid, in total and disaggregated by EFC 
and by Verification Tracking Group, that received a grant or loan 
disbursement within the award year they were selected.
    Answer. Please see the table below. The applicant's assigned EFC 
group is based on the last aided transaction if the applicant received 
aid. Otherwise, it is based on the last transaction with an EFC or 
signature reject EFC. Verification Tracking Groups are based on the 
last non-rejected or signature reject transaction. A value of ``NA'' 
was noted for small cell sizes because of privacy concerns.

                                 PERCENTAGE OF APPLICANTS AIDED (GRANT OR LOAN)
                                                     AY 2018
----------------------------------------------------------------------------------------------------------------
                                                                        Verification Tracking Groups
                                                          ------------------------------------------------------
                        EFC Group                                                              Not
                                                               V1         V4         V5      Selected    Total
----------------------------------------------------------------------------------------------------------------
01- =0...................................................      51.5%      50.0%      37.2%      74.1%      64.3%
02- 1 to 1K..............................................      68.6%      56.9%      49.7%      79.6%      74.3%
03- 1K to 2K.............................................      70.2%      51.7%      50.0%      75.6%      72.1%
04- 2K to 3K.............................................      69.8%      50.6%      49.9%      75.0%      71.6%
05- 3K to 4K.............................................      68.0%      48.4%      46.8%      74.0%      70.0%
06- 4K to 5K.............................................      64.4%      47.0%      43.0%      71.9%      67.0%
07- 5K to 6K.............................................      56.5%      40.5%      41.3%      54.1%      54.6%
08- 6K to 7K.............................................      54.9%      46.7%      51.1%      53.6%      53.7%
09- 7K to 8K.............................................      54.0%         NA      48.8%      54.8%      54.7%
10- 8K to 9K.............................................      55.1%         NA      55.0%      55.7%      55.6%
11- 9K to 10K............................................      55.3%         NA      51.9%      56.7%      56.6%
12- 10K to 20K...........................................      55.9%      70.6%      54.1%      59.3%      59.1%
13- 20K to 30K...........................................      57.2%         NA      54.3%      59.3%      59.2%
14- 30K to 40K...........................................      54.6%         NA      55.1%      56.5%      56.4%
15- 40K to 50K...........................................      51.4%         NA      53.0%      52.7%      52.7%
16- 50K to 60K...........................................      47.8%         NA      60.0%      49.3%      49.2%
17- 60K+.................................................      36.4%         NA      38.3%      37.2%      37.2%
Signature Reject EFC.....................................       0.2%       0.1%       0.2%       0.6%       0.4%
  Total..................................................      56.0%      48.5%      38.2%      64.8%      61.5%
----------------------------------------------------------------------------------------------------------------

    2017-2018 and 2018-2019 verification data and tax return filing
    Question. Please provide verification data from 2017-18 and 2018-
19, when families were reporting actual prior-prior year vs. estimated 
prior-year tax filing status data, to ascertain the percentage of self-
reported non-filers who had, in fact, filed tax returns.
    Answer. Each year, the Department works with the Internal Revenue 
Service (IRS) to conduct annual statistical studies to determine the 
tax filing status of applicants to make informed decisions regarding 
how to detect and reduce the misreporting of income data on the FAFSA. 
The report generated by these studies, known as the IRS Statistical 
Study, uses a statistically valid sampling of confirmed applicant and 
parental income data as reported to the IRS. The sampled data and its 
findings are then extrapolated to the total applicant population. The 
2017-2018 IRS Statistical Study is the most current IRS Statistical 
Study available at this time.
    In the 2017-2018 study, higher conflicting results between reported 
filing status and actual filing status occurred for two groups who 
indicated not filing a return: (1) unmarried parents of dependent 
applicants who lived together; and (2) independent applicants reporting 
a marital status of separated.
    Of the first group, the parents of dependent applicants who 
reported they would not file a return, 16.67 percent were confirmed to 
have filed a return. Of the second group, the independent applicants 
who reported they would not file a return, 23.81 percent were confirmed 
to have filed a return. Additionally, the study showed a very high 
percentage of conflicting matching results for applicants who indicated 
filing Foreign or Trust Territory returns when responding to the type 
of tax return question.
  effect of corrected filing status and income on federal student aid 
                 eligibility for misreported non-filers
    Question. Please provide information on the impact on Federal 
student aid eligibility for misreported non-filers when their correct 
filing status and income is reported.
    Answer. Please see the response to the previous question. FSA is 
currently reviewing the data from the 2017-2018 IRS Statistical Study 
to determine impacts to eligibility for misreported non-filers.
              continuous improvement of verification model
    Question. Is the verification selection model modified to be more 
effective and less burdensome on a regular basis? If yes, how and, if 
not, why not?
    Answer. A new machine learning model for selecting applicants for 
verification was implemented for the 2019-2020 award year. The model is 
retrained every year based on the previous year's data. Each year, the 
model becomes more efficient in identifying risk for improper under- 
and overpayments, thereby minimizing burden to students and families.
              irs data retrieval tool mobile optimization
    Question. Is there currently a plan in place to optimize the IRS 
Data Retrieval Tool webpage for mobile devices and, if so, when will 
this optimization occur?
    Answer. Currently, in order to access their income information 
through the IRS Data Retrieval Tool (DRT), the applicant must leave the 
FAFSA website and authenticate on the IRS DRT website. FSA cannot 
address whether the IRS has current plans to optimize the DRT webpage 
for mobile devices.
changes to fafsa fields transferred via data retrieval tool versus tax 
                               schedules
    Question. Which FAFSA fields formerly transferred through the DRT 
solely from IRS Form 1040 are now, or are planned to be, transferred 
from tax schedules? When will this transfer become effective?
    Answer. On Oct. 1, 2019, when the 2020--21 FAFSA form launches, the 
Department will receive the same data elements on the FAFSA form via 
the IRS DRT that it receives today. There is not a 1040A/EZ indicator 
in the IRS DRT now, and there will not be a Schedule 1 indicator in the 
IRS DRT for the 2020-2021 FAFSA processing cycle.
    The Department replaced the question on the FAFSA form that asks 
about being eligible to complete a 1040A or 1040EZ with a question that 
will ask about a Schedule 1. It is a one-for-one replacement. The 
public comment period is still open, so final text of the question is 
yet to be determined. The Schedule 1 question on the 2020-2021 FAFSA 
form that releases Oct. 1, 2019, will serve the same purpose as the 
1040A/EZ question does today.
       internal revenue service tax transcripts and third parties
    Question. Will the Department request IRS to allow tax transcripts 
be sent to authorized third parties, including institutions of higher 
education and college access programs?
    Answer. The Department has asked the IRS to consider allowing tax 
transcripts, at the request of the tax filer, to continue to be sent 
directly to institutions of higher education as an exception to the IRS 
decision to no longer allow tax transcripts to be sent directly to 
third parties. The IRS has declined to make an exception in this 
regard.
            efforts to streamline fafsa verification process
    Question. Please describe any past, current, or planned efforts by 
the U.S. Department of Education to explore secure data sharing options 
with the IRS or other Federal agencies that have the potential to 
expedite the verification process.
    Answer. The Department continues discussions with Congressional 
Members and Staff regarding proposals to provide an exemption to 
Section 6103 of the IRS tax code, which would allow the IRS to disclose 
taxpayer information for FAFSA, Income-Driven Repayment (IDR) and Total 
and Permanent Disability (TPD) applications. During the 115th Congress, 
legislation passed the Senate and was introduced in the House to amend 
the Internal Revenue Code of 1986 to authorize such disclosures, but 
the legislation was not enacted. In the new 116th Congress, in January 
2019, Congressmen Doggett (D-TX) and Buchanan (R-FL) introduced H.R. 
640, which is a modified version of the prior bills. The bill has been 
referred to the House Ways and Means Committee as well as the House 
Committee on Education and Labor.
    review of systemic reasons for erroneous teach grant conversion
    Question. Please provide Federal Student Aid's review of erroneous 
grant-to-loan conversions that found four systemic reasons for 
erroneous conversions from the previous TEACH Grant servicer, and the 
instructions provided to FedLoan Servicing to prevent further erroneous 
conversions, referenced by the Department in response to recommendation 
#3 in the GAO's 2015 report.
    Answer. Attached find the instructions provided to FedLoan 
Servicing in the scope statement for the TEACH Grant Clean Up Project. 
The scope statement provides the project's background, objectives, 
deliverables, and milestones.






    In 2014, the Department detected anomalies in conversion rates that 
it later determined could be incorrect conversions. While the 
Department discovered the conversions after FedLoan Servicing (FedLoan) 
was the designated TEACH Grant servicer, the errors occurred prior to 
its involvement in the program. The Department's actions included 
contractual changes requiring FedLoan to perform outreach to recipients 
whose TEACH Grants may have been incorrectly converted to a loan and to 
offer the option of TEACH Grant reinstatements. In general, the 
reinstatement of a TEACH Grant requires the following:
  --Written communication to recipients explaining the TEACH Grant(s) 
        reinstatement.
  --Application of previous loan payments to Department-held loans 
        serviced at FedLoan Servicing. If no other Department-held 
        loans are serviced by FedLoan, payments are refunded 
        automatically to the recipient.
  --Update information to any credit reporting agencies.
    In February 2015, FedLoan began reaching out to recipients that may 
have had their TEACH Grants erroneously converted by the previous 
servicer ACS, to give them an opportunity to have their loans 
reconverted to grants. FedLoan reached out to 10,776 recipients 
directly by letter and e-mail to give them the opportunity to have 
their loans reconverted to grants, which resulted in 1,671 recipients 
being successfully reconverted. Most of the remaining recipients did 
not respond to FedLoan's outreach. Based on historical conversion 
rates, some recipients may not have responded because they were no 
longer meeting program requirements or did not intend to pursue the 
service requirement. Only those who responded, choosing to have their 
Direct Unsubsidized Loans converted back to TEACH Grants, had their 
collection activity ceased during the conversion process.
    In February 2019, FSA began sending direct communications to TEACH 
Grant recipients who may be eligible for reconsideration, including 
those who may have been previously converted in error by the former 
servicer ACS, but who did not respond to the outreach effort to this 
population in 2015. This communication directs recipients to the 
program requirements on StudentAid.gov. As a result of the 2019 
reconsideration effort, more than 2,300 recipients have been approved 
for reinstatement as of April 28, 2019. This population of recipients 
includes those who may have been converted in error and also recipients 
who were meeting the service obligation but may have missed an 
administrative requirement (submission of annual certifications). TEACH 
Grant recipients who have been reinstated have either received a refund 
or credits have been applied to other Direct Loans on their account. 
Additionally, the servicer has sent updated information to the credit 
reporting agencies. ED continues oversight of the program which 
includes a continued review of FedLoan's procedures and processing.
  clarification provided to fedloan regarding re-conversion of teach 
                                 grants
    Question. Please provide the Department's clarifications to the 
servicer about the TEACH Grant conversion dispute process including the 
``specific set of criteria under which FedLoan Servicing is authorized 
to convert loans back to grants'' referenced in response to 
recommendation #4 in the GAO's 2015 report.
    Answer. The authority provided to FedLoan did not expand the 
reasons for approving reconversions. At the time, Federal Student Aid 
(FSA) only considered reconversion of loans back to grants due to 
servicing errors; as such, FSA provided clarification to the servicer 
on what constitutes a servicing error. FSA granted FedLoan the 
authority to review and determine the approval or denial of conversion 
requests under the mentioned criteria without additional FSA review.
    Implementation of this change provided for quicker resolution of 
disputes--one review instead of two--to benefit recipients. FedLoan 
refers any questionable disputes to FSA for careful review, including 
those escalated or received through FSA's Ombudsman or official 
correspondence.
   current fedloan guidance on teach grant-to-loan conversion appeals
    Question. Please provide any direction, guidance, policies, or 
instructions currently provided to FedLoan Servicing regarding the 
TEACH Grant application process and the process to appeal a grant-to-
loan conversion.
    Answer. 34 C.F.R. Sec. 686.43(d) provides that, once a TEACH Grant 
is converted to a Direct Unsubsidized Loan, it cannot be reconverted to 
a grant; however, this does not preclude the Department from 
reinstating TEACH Grants when it has been determined that a TEACH Grant 
was converted to a loan due to a servicing error.
    The Department has taken steps to define what constitutes a 
servicing error and has formalized these steps in contractual servicing 
requirements for FedLoan Servicing (FedLoan). Recipients who contend 
that a servicer converted their TEACH Grant(s) in error may appeal to 
the Department. Moreover, the Department's 2019 reconsideration efforts 
streamline TEACH Grant reinstatements. Under criteria established by 
the Department, if a recipient can demonstrate that he or she has met 
or is meeting program requirements, the Department has authorized 
FedLoan to reinstate a TEACH Grant without the recipient needing to 
``appeal'' or further review by Federal Student Aid (FSA). Under this 
same change, the Department instructed FedLoan that where a conversion 
to a loan occurred as a result of a servicing error on the part of the 
servicer, the recipient does not need to ask for ``reconsideration.'' 
FedLoan shall continue to reinstate those grants under existing 
requirements. FSA oversees this process through its oversight and 
monitoring efforts and reviews any disputes associated with this 
process.
     fedloan corrective actions for erroneous teach grant-to-loan 
                              conversions
    Question. Please provide a list of any actions FedLoan Servicing 
has taken to correct its own or the previous servicer's grant-to-loan 
conversions that were or are suspected to have been made in error, 
including details on whether loans were reconverted into grants, 
whether any payments were returned to teachers, and any communication 
to consumer credit bureaus.
    Answer. In 2014, the Department detected anomalies in conversion 
rates that it later determined could be incorrect conversions. Although 
discovered while FedLoan Servicing (FedLoan) was the designated TEACH 
Grant servicer, the errors occurred prior to its involvement in the 
program. The Department's actions included contractual changes 
requiring FedLoan to perform outreach to recipients whose TEACH Grants 
may have been incorrectly converted to a loan and the option of TEACH 
Grant reinstatements. In general, the reinstatement of a TEACH Grant 
includes the following actions:
  --The servicer sends written communication to recipients explaining 
        the TEACH Grant(s) reinstatement.
  --The servicer applies previous loan payments to ED-held loans 
        serviced at FedLoan. If no other ED-held loans are serviced by 
        FedLoan, payments are refunded automatically to the recipient.
  --The servicer provides updated information to credit reporting 
        agencies.
    In February 2015, FedLoan began reaching out to TEACH Grant 
recipients that may have had their grants erroneously converted by the 
previous servicer, ACS, to give the recipients an opportunity to have 
their loans reconverted to grants. FedLoan sent letters and email to 
10,776 recipients; from this effort, 1,671 recipients' loans 
successfully were reconverted to grants. Most of the remaining 
recipients did not respond to FedLoan's outreach. Based on historical 
conversion rates, some recipients may not have responded because they 
were no longer meeting program requirements or did not intend to pursue 
the service requirement. The Department ceased collection activity 
during the conversion process for individuals who responded to the 
servicer's outreach and elected to have their Direct Unsubsidized Loans 
converted back to TEACH Grants.
    In February 2019, the Department began sending direct 
communications to TEACH Grant recipients who may be eligible to have 
their grant-to-loan conversion reconsidered. This outreach includes 
individuals--who may have been previously converted in error by the 
former servicer, ACS--but who did not respond to the outreach effort in 
2015. This communication directs recipients to the program requirements 
on StudentAid.gov. As a result of the 2019 reconsideration effort, more 
than 2,300 recipients have been approved to have their loans 
reconverted to grants as of April 28, 2019. This population of 
recipients includes those who may have been converted in error and also 
recipients who were meeting the service obligation, but may have missed 
an administrative requirement (e.g. submission of annual 
certifications). TEACH Grant recipients who have been reinstated have 
either received a refund or credits have been applied to other Direct 
Loans on their account. Additionally, the servicer has sent updated 
information to the credit reporting agencies.
    The Department continues oversight of the program, which includes a 
continued review of FedLoan's procedures and processing.
  fedloan standards for reviewing and communicating teach grant errors
    Question. Does FedLoan Servicing have clear timeframes for 
reviewing TEACH Grant paperwork for errors and communicating those 
errors to recipients? If so, what are those timeframes?
    Answer. The Department receives and reviews TEACH Grant servicing 
metrics on a weekly basis to ensure effective and efficient processing 
of TEACH certification documentation. Such metrics include:
  --Call center statistics;
  --TEACH Grant certification statistics (e.g. data about approvals, 
        denials, and certifications outstanding; and
  --Denials disaggregated by reason for denial.
    As part of the Department's top-to-bottom review of all aspects of 
the program, the Department intends to address servicing level 
agreements and/or processing to ensure programmatic efficiency.
 per-unit payment for borrowers in repayment versus borrowers in teach 
                              grant status
    Question. Under the 2014 servicing contract, FedLoan Servicing is 
paid $1.05 per unit for ``Borrowers in TEACH Grant Status'' and paid 
$2.85 per unit for borrowers ``In Repayment.''
    If a TEACH Grant is converted into a loan that then enters 
repayment, is FedLoan Servicing paid $2.85 per unit? If so, is the 
Department concerned about a perverse incentive for the servicer to 
allow or not combat grant-to-loan conversions for TEACH Grant 
recipients?
    Answer. Yes. If a TEACH Grant is converted to a Direct Unsubsidized 
Loan, FedLoan Servicing would be paid the per unit rate for a borrower 
in repayment. There is no evidence to suggest improper motivation on 
the part of the current TEACH Grant servicer; however, we continue our 
ongoing monitoring of the servicer's contractual compliance. In 
addition, Corrective Action Plans, which include penalties and fees 
associated with non-compliance, serve as a deterrent to perverse 
incentive.
       collections and disputes resulting from teach conversions
    Question. Please provide the following information on TEACH grant-
to-loan conversions:
  --a. How many TEACH Grant recipients are or have been the subject of 
        involuntary collection proceedings for repayment of TEACH 
        Grants converted to loans?
  --b. How many TEACH Grant recipients have disputed the conversion of 
        their grants to loans?
    --i. In how many cases of dispute did ED staff review the disputes?
    --ii. In what share of the cases were the loans reconverted to 
            grants?
    Answer:
  --a. As of February 28, 2019, there have been 3,196 TEACH Grant 
        recipients--with loans resulting from TEACH Grant conversions--
        who are or have been in default and subject to Administrative 
        Wage Garnishment (AWG) or Treasury Offset Program (TOP) 
        collections.
  --b. As of April 23, 2019, approximately 12,200 TEACH Grant 
        recipients have disputed the conversion of their grants to 
        loans.
    --i. As of April 23, 2019, the Department has reviewed 
            approximately 3,500 TEACH Grant disputes. Please note that 
            a recipient may dispute a TEACH Grant conversion more than 
            once. If a recipient had more than one dispute, the 
            provided data only captures the most recent dispute's 
            outcome. Additionally, many of the recipients with disputes 
            have an opportunity to have their grants reinstated through 
            the reconsideration process which began in February 2019 
            and is ongoing.
    --ii. As of April 23, 2019, approximately 2,300 of the 3,500 TEACH 
            Grant disputes reviewed by the Department have been 
            approved. Please note that a recipient may dispute a TEACH 
            Grant conversion more than once. If a recipient had more 
            than one dispute, the provided data only captures the most 
            recent dispute's outcome. Additionally, many of the 
            recipients with disputes have an opportunity to have their 
            grants reinstated through the reconsideration process which 
            began in February 2019 and is ongoing.
                automatic teach re-conversions to grants
    Question. Have all of the Department's previously announced 
automatic reconversions of loans back to grants for TEACH recipients 
who were subject to servicer error been completed? If not, when will 
these automatic reconversions be completed?
    Answer. As of April 24, 2019, 808 of the 823 recipients who were 
identified as eligible for automatic reconversion have had their loans 
reinstated as grants. The remaining 15 are in process, and the 
Department anticipates completing the reinstatement process soon.
  guidance to fedloan on responding to recipients whose teach grants 
                           converted to loans
    Question. What specific policies, procedures, or guidelines has the 
Department provided FedLoan to respond to grant recipients who have 
experienced a grant-to-loan conversion?
    Answer. The Department has established contractual requirements 
outlining communications, procedures, and standards for responding to 
requests for reconsideration of TEACH Grant conversions.
       criteria for fedloan to convert teach loans back to grants
    Question. What specific criteria are in place for FedLoan to make a 
determination that loans should be reconverted back to grants?
    Answer. The Department has established contractual requirements 
that outline the exact criteria to be considered when determining 
whether loans should be converted back to TEACH Grants. The criteria 
require a review of the remainder of the available service window, the 
remainder of the legally allowed 8 years, and qualifying teaching that 
has already been documented or needs to be credited. Moreover, when 
examining the recipient's available service window, FedLoan Servicing 
(FedLoan) is to consider periods of suspension for which the recipient 
would have otherwise been qualified. Where it is clear--based on the 
available information and documentation-- that the recipient has met or 
can meet the required 4 years within the legally allowed time 
established by the authorizing statute, FedLoan is to reinstate the 
TEACH Grant(s).
 timeframe for fedloan to respond upon initial teach recipient contact
    Question. What is the timeframe for FedLoan to provide an initial 
response, upon being contacted by a grant recipient?
    Answer. FedLoan Servicing (FedLoan) is to respond to recipients who 
submit documentation to request reconsideration (i.e. Certification of 
Teaching Service) within 10 business days of receiving the request. 
Moreover, within five business days of determining that a recipient is 
eligible for reconsideration, FedLoan is to notify the recipient of the 
outcome of the review.
      timeline and safeguards for fedloan to teach re-conversions
    Question. If a grant recipient is determined to be eligible to have 
their loans converted back to grants, what is the timeframe for FedLoan 
to finish this process?
    Answer. The Department did not establish a required processing 
timeframe within which loans need to be converted back to TEACH Grants. 
Each reinstatement is unique, as some may require assignment from 
another servicer, recall from default, and/or reapplication of 
payments. The Department has established service levels for processing 
documentation and determinations related to reconsideration requests. 
Additionally, the Department has requirements that allow for expedited 
processing of individuals who clearly meet program requirements and has 
utilized this authority to assist more than 800 recipients in gaining 
reinstatement.
    Question. What specific policies and procedures are in place for 
addressing potential damages caused to a grant recipient's credit 
history?
    Answer. When a TEACH Grant is reinstated, the former loan 
associated with the grant is written off and a credit trade-line 
deletion is reported to all applicable Credit Reporting Agencies 
(CRAs). Once processed by CRAs, this action removes the credit history 
related to the loan.
    Question. What specific policies and procedures are in place to 
refund any money paid toward those loans? And are there guarantees in 
place to assure refunds will not be redistributed to other loan 
accounts, unless by the express request of the recipient?
    Answer. The Department applies a standard approach to the treatment 
of payments. In most cases, TEACH Grant recipients, whose grants were 
converted to Direct Unsubsidized Loans, also have other Direct Loans. 
TEACH Grant recipients typically make a single monthly payment to repay 
all their Direct Loans, including the Direct Unsubsidized Loans that 
were converted from TEACH Grants. Thus, any payments made on loans that 
are reconverted to TEACH Grants are applied to the outstanding balance 
on the borrower's other Direct Loans or, if the individual has no other 
Direct Loans, returned to the person who made the payments.
    This standard approach is also the most appropriate method for 
TEACH Grant recipients making payments under an income-driven repayment 
plan (e.g., Income-Based Repayment, Pay As You Earn, or Revised Pay As 
You Earn.) Because the monthly payment amount under these plans is 
generally based on the borrower's income rather than the amount of the 
borrower's Direct Loan debt, the monthly payment would be the same 
before and after any TEACH Grants were reconverted. In addition, the 
standard approach ensures that the borrower continues to meet minimum 
payment requirements for Public Service Loan Forgiveness (PSLF) and 
reduces outstanding Direct Loan debt.
          dispute resolution in teach grant-to-loan conversion
    Question. In the event that a grant recipient is found to be 
ineligible to have their loans converted back to grants, what policies, 
procedures, or guidelines has the Department put into place to address 
potential disputes?
    Answer. Individuals who disagree with the initial determination may 
contact the TEACH Grant Servicer to ask for another review. Such 
requests will be handled via the Department's existing appeal process, 
which entails a final, full review by a Department employee. The option 
to discuss determinations is communicated to recipients/borrowers in 
decision notices. The Department monitors the TEACH Grant Servicer for 
compliance in this area. In addition, borrowers can also contact the 
FSA Ombudsman if they still dispute the Department's determination.
                       teach grant recipient data
    Question. Please provide the number of TEACH Grant recipients to 
date, disaggregated by:
  --a. Those that are still enrolled in an eligible program of study, 
        by State
  --b.Those that have withdrawn from an eligible program of study, 
        including:
    --i. The number who subsequently reenrolled in an eligible program 
            of study
    --ii. The number who did not complete an eligible program of study 
            and subsequently had their grant converted to a loan
  --c. Those that have completed an eligible program of study, 
        including:
    --i. The number who have completed the service requirement
    --ii. The number who are making progress toward the service 
            requirement and have not experienced a grant-to-loan 
            conversion
    --iii. The number who experienced grant-to-loan conversions
    Answer:
  --a. Please see the attached file.




  --b. Unfortunately, the Department lacks sufficient data to provide 
        these figures.
  --c. i. Approximately 21,000 recipients have completed their teaching 
        obligation.
    --ii. In addition, there are 70,000 TEACH Grant recipients who have 
            not yet satisfied the program requirements.
    --iii. As of February 8, 2019, there have been 94,000 TEACH Grant 
            recipients, with a combined total of 163,000 TEACH Grants, 
            that have been converted to loans. Approximately two-thirds 
            of these borrowers still have active loans.
                                 ______
                                 
           Questions Submitted by Senator Christopher Murphy
                             magnet schools
    Question. The Magnet Schools Assistance Program (MSAP) is the only 
Federal education grant designed specifically to promote educational 
equity, diversity, academic achievement, and innovation in the 
classroom, and enjoys strong bipartisan support. You have stated that 
magnet schools are part of your school choice agenda. While the 
President's Budget Request requests large investments in school choice 
generally, it asks for level funding for the Magnet Schools Assistance 
Program. Magnet schools are unique compared with some of the other 
school choice options discussed by the administration because they are 
held accountable by the State and the local school board, promote 
school equity through integration, and offer specialized instruction to 
low-income students. Why hasn't the Administration made magnet schools 
a more central part of their choice agenda given their strong outcomes 
and focus on equity?
    Answer. Magnet schools are an important component of the 
Administration's strategy to provide students and families with as many 
high-quality educational options as possible. Since fiscal year 2015, 
Congress has increased the appropriation for this program by more than 
$15 million. At the fiscal year 2020 request level of $107 million, 
which matches the amount Congress appropriated for the program in 
fiscal year 2019, we would be able to continue to support 36 current 
grantees working to expand the choices available for students and 
families in their communities. The President's Budget for fiscal year 
2020 is about prioritizing limited resources; the Department did not 
request additional funding for MSAP because it already considers the 
program a key lever for expanding educational options for students and 
families.
   essa oversight and ensuring support for historically underserved 
                                students
    Question. The Department approved Every Student Succeeds Act State 
plans with accountability systems that do not take into account the 
performance of historically underserved students as required under the 
Every Student Succeeds Act. Many States are now issuing school letter 
grades based on these systems and I am concerned that these letter 
grades may provide misleading information. For example, in one State, 
25 percent of schools that received an A are identified for targeted 
support due to the performance of historically underserved students. In 
that same State, 71 percent of schools that receive a B are identified 
for targeted support.
    It makes little sense for a school to receive an A or a B if its 
students of color or other subgroups consistently underperform. What 
oversight is the Department conducting to ensure the performance of 
historically underserved students isn't masked in State accountability 
systems?
    Answer. The Department carefully evaluated each approved State 
accountability system to ensure it meets all statutory requirements, 
including those for subgroup accountability. It believes that those 
statutory requirements ensure strong subgroup accountability by 
requiring State systems to be based on indicators that are capable of 
disaggregation by subgroup and that take subgroup performance into 
account in the identification of schools for comprehensive or targeted 
support and improvement. States have discretion under the ESEA to 
create and use summative ratings as part of their approved statewide 
accountability systems, and they are responsible for ensuring that such 
ratings operate as intended, providing clear and understandable 
information to the public and adhering to the requirement that the 
accountability system meaningfully differentiates schools. The 
Department stands ready to provide assistance, including through its 
State Support Network and in collaboration with the Council of Chief 
State School Officers, to any State that seeks assistance in evaluating 
the effectiveness and transparency of its approved ESEA accountability 
system.
        state-level policy changes and continued essa oversight
    Question. I am concerned that the Department is insufficiently 
overseeing the implementation of State ESSA plans. For example, 
Michigan committed to identifying schools for additional targeted 
support every 3 years in its approved ESSA plan. However, the Michigan 
Department of Education has apparently changed its policy and now plans 
to identify these schools every 6 years. This not only violates the 
State's own plan, but it also violates ESSA because the law requires 
these schools to be identified no less frequently than once every 3 
years. How is a State like Michigan compliant with ESSA if its schools 
now only need to be identified for additional targeted support once 
every 6 years?
    Answer. While the ESEA requires States to identify schools for 
comprehensive support and improvement at least once every three school 
years, the statute is silent on the frequency with which a State must 
identify schools for additional targeted support. Consequently, States 
have flexibility to establish the frequency of identification of 
schools for additional targeted support and improvement.
                      student aid enforcement unit
    Question. I understand that you have recently decided to open an 
investigation into the admissions scandal known as Varsity Blues. The 
investigation is being led by the Student Aid Enforcement Unit at the 
Department. I am absolutely in favor of stopping abuses of power, but 
your Department is actively dismantling the Student Aid Enforcement 
Unit whose very job is to protect students and taxpayers from illegal 
actions by higher education institutions.
    Please provide a table showing the following information 
disaggregated by each of the Enforcement Unit's four staff groups:
  --i. Current funding level
  --ii. Current number of unduplicated, non-managerial staff
  --iii. Current number of unduplicated, managerial staff
    Answer. For fiscal year 2019, the total approved budget for the 
Enforcement Office, excluding personnel compensation and benefits, is 
$8 million. The total amount spent in fiscal year 2019, as of March 31, 
2019, on personnel compensation and benefits is $3 million. Staffing 
numbers, as of March 31, 2019, are below.

                        TABLE--ENFORCEMENT OFFICE STAFFING NUMBERS, AS OF MARCH 31, 2019
----------------------------------------------------------------------------------------------------------------
                                                                  Number of  Non-    Number of
                              Group                                 Managerial      Managerial        Totals
                                                                     Employees       Employees
----------------------------------------------------------------------------------------------------------------
Administrative Actions & Appeals Service........................               9               1              10
Borrower Defense................................................             5.5               1             6.5
Clery...........................................................              17               1              18
Investigations..................................................               2               0               2
Front Office....................................................               2               0               2
                                                                 -----------------------------------------------
  Total employees = 38.5*
----------------------------------------------------------------------------------------------------------------
*This count includes all Enforcement Office staff, but excludes the Chief Enforcement Officer.

    Question. Please provide a table showing the following information 
disaggregated by each of the Enforcement Unit's four staff groups as of 
January 19, 2017:
  --i. Funding level
  --ii. Number of unduplicated, non-managerial staff
  --iii. Number of unduplicated, managerial staff
    Answer. In fiscal year 2017, the total expenditures for the 
Enforcement Office, including personnel compensation and benefits, was 
$7.9 million. Staffing numbers, as of January 19, 2017, are below.

                       TABLE--ENFORCEMENT OFFICE STAFFING NUMBERS, AS OF JANUARY 19, 2017
----------------------------------------------------------------------------------------------------------------
                                                                  Number of  Non-    Number of
                              Group                                 Managerial      Managerial        Totals
                                                                     Employees       Employees
----------------------------------------------------------------------------------------------------------------
Administrative Actions & Appeals Service........................              11               1              12
Borrower Defense................................................              10               1              11
Clery...........................................................              20               1              21
Investigations..................................................               8               1               9
Front Office....................................................               1               1               2
                                                                 -----------------------------------------------
  Total employees = 55*
----------------------------------------------------------------------------------------------------------------
*This count includes all Enforcement Office staff, but excludes the Chief Enforcement Officer.

        administration record on student aid enforcement actions
    Question. Please a list and description of enforcement actions 
taken by the Student Aid Enforcement Unit since January 20, 2017, 
including school name, summary of each violation, enforcement action 
taken, and total number of enforcement actions taken overall.
    Answer. The Department provided an attachment with the requested 
information to the Committee.
         investigations opened by student aid enforcement unit
    Question. How many investigations were opened by the Student Aid 
Enforcement Unit within the following time periods:
  --a. January 20, 2017 until December 31, 2017
  --b. January 1, 2018 until December 31, 2018
  --c. January 1, 2019 to date.
    Answer:
  --a. From January 20, 2017 until December 31, 2017, eight 
        investigations were opened by the Investigations Group with the 
        Department's office of Federal Student Aid.
  --b. From January 1, 2018 until December 31, 2018, one investigation 
        was opened by the Investigations Group with the Department's 
        office of Federal Student Aid.
  --c. From January 1, 2019 to April 23, 2019, eight investigations 
        were opened by the Investigations Group with the Department's 
        office of Federal Student Aid.
   steps to ensure compliance with 2016 borrower defense regulations
    Question. Please state what steps the Department has taken with 
regard to Education Corporation of America and Vatterott Colleges to 
ensure that the companies comply with the guidance issued on March 15, 
2019, ``Guidance Concerning Some Provisions of the 2016 Borrower 
Defense to Repayment Regulations'' given that the 2016 borrower defense 
regulations were in effect at the time of closure. Specifically, how 
does the Department intend to ensure that the companies indicate if and 
when either of them removed equity from the schools prior to the campus 
closures in November and December of 2018?
    Answer. Because the Vatterott Colleges and most of the ECA campuses 
closed in December 2018, the institutions are not required to comply 
with the March 15, 2019 borrower defense guidance. While the March 15, 
2019 guidance requires retroactive reporting back to July 1, 2017, the 
Department cannot compel closed institutions to comply with such 
reporting requirements.
    The New England College of Business (NECB), the only ECA campus 
that remains open, is required to comply with the 2016 borrower defense 
regulations and the Department's March 15, 2019 guidance. The 
Department will take similar steps as it does with other Title IV-
eligible institutions to ensure that NECB complies with such 
regulations. The March 15, 2019 guidance requires institutions with a 
composite score less than 1.5 to report any withdrawal of an owner's 
equity from the institution, unless the transfer is to an entity 
included in the affiliated entity group on whose basis the 
institution's composite score was calculated. NECB is required to 
report withdrawals of an owner's equity--and, as of May 3, 2019, has 
not done so--and other triggering events within 60 days of March 15, 
2019. NECB also posted a letter of credit for 15 percent of its prior-
year Title IV funding and is currently on the HCM2 Method of Payment. 
In addition, NECB is required to report biweekly cash balances, monthly 
actual and projected cash flows, and monthly student rosters.
  surety measures for institutions deemed not financially responsible 
                         under borrower defense
    Question. What steps has the Department taken to ensure that it is 
able to obtain sufficient financial surety from institutions that are 
determined to be ``not financially responsible'' upon either a routine 
calculation of composite scores or upon recalculation of composite 
scores that are triggered by certain automatic and discretionary events 
defined in the Borrower Defense regulations (34 CFR 668.171)?
    Answer. The regulations at 34 CFR part 668, subpart L and Section 
498(c) of the Higher Education Act govern the steps the Department 
takes to ensure that the Secretary obtains sufficient financial 
surety--as well as the amounts of those financial sureties--from 
institutions determined to be ``not financially responsible'' under a 
routine calculation of a composite score. The regulations at 34 CFR 
668.171 provide the steps the Department takes to ensure that the 
Secretary is able to obtain sufficient financial sureties upon 
recalculation of composite scores that are triggered by certain 
automatic and discretionary events defined in the borrower defense 
regulations. The Department does not comment on deliberative, 
preliminary, or ongoing investigative work, including disclosing the 
specific steps the Department takes to obtain a financial surety from 
institutions that are ``not financially responsible.''
                                 ______
                                 
            Questions Submitted by Senator Joe Manchin, III
          substance abuse treatment and counseling in schools
    Question. As you know, the bipartisan Every Student Succeeds Act 
included a program called Title IV--the Student Support and Academic 
Enrichment Grants program. This block grant is designed to provide 
States and school districts the flexibility to provide a wide range of 
services that support a well-rounded education. Importantly for my 
State, which is battling a devastating opioid epidemic, this block 
grant can be used to provide mental health services and counseling to 
students who are either dealing with addicted parents or facing 
addiction themselves. Congress authorized more than $1.6 billion in 
funding for this program and $1.17 billion in fiscal year 2019. Despite 
the local control and flexibility this program offers to districts, for 
the third year in a row, the President's budget has called for complete 
elimination of this program. That is completely unacceptable. West 
Virginia students are facing huge hurdles that make it harder for them 
to get an education and my State needs every penny of help to bring 
those students the mental health and counseling services that they need 
to overcome those obstacles.
    How can the Department strip funding from a block grant that can be 
used to help a State like mine that is being devastated by opioid 
addiction?
    Answer. The Administration has not requested funding for Student 
Support and Academic Enrichment Grants because the formula grant 
structure of the program, even at the fiscal year 2019 funding level of 
$1.17 billion, results in allocations of less than $30,000 for an 
estimated two-thirds of LEAs, more than half of which receive only the 
minimum subgrant of $10,000. The Administration believes that limited 
Federal education resources should not be invested in a program under 
which most local awards would be too small to have a meaningful impact.
    A variety of other Federal funds, however, are available to support 
opioid abuse prevention and provide mental health services, especially 
in-school counseling, to students. For example, among Department of 
Education funds, school districts may use a portion of the funds under 
the $15.9 billion Title I Grants to LEAs program to provide counseling 
for students, and the $200 million request for School Safety National 
Activities also supports multiple programs that can support improved 
access to school-based mental health services, including School Climate 
Transformation Grants, which includes a priority for applicants that 
propose to include opioid abuse prevention and mitigation strategies as 
part of their projects. For the Department of Health and Human Services 
(HHS), the President's 2020 budget request includes $102 million for 
Project Advancing Wellness and Resilience Education (AWARE), which 
promotes and connects youth to mental health services; and $31 million 
for Healthy Transitions, which improves support services for 
adolescents and young adults with, or who are at risk of developing, a 
serious mental health condition. The largest Federal source of funding 
to pay for mental health services is Medicaid, which requires States to 
provide Medicaid-eligible children with all necessary medical services, 
including mental health services.
                21st century community learning centers
    Question. I have always strongly supported funding for the 21st 
Century Community Learning Centers and afterschool programs. In fact, 
this was one of the few programs that was not consolidated into the 
larger block grant when the Congress passed the Every Student Succeeds 
Act, reauthorizing No Child Left Behind. Congressional support for this 
program comes from the fact that we recognize the critical need for 
safe and secure places for students to learn and be before and after 
school and during the summer months. That is why I was so disappointed 
to see that the President's budget completely eliminated funding for 
this program--a $1.2 billion cut to Federal funding for afterschool and 
summer programs. I've seen firsthand how effective this program is in 
West Virginia. Nila Cobb with the West Virginia Afterschool Network 
recently shared with me one of the impacts that this program is having 
in Barbour County, WV at KidReach through World Vision. There are two 
students that were adopted by a single relative due to the death of one 
parent and the incarceration of the other. KidReach enables the new 
adoptive parent to keep her job and have the peace of mind knowing that 
her children are safe, receiving a nutritious meal, and getting the 
academic support that they need. Too many students do not have a safe 
place to go afterschool or during the summer and do not have the 
academic resources or assistance at home. And in States like West 
Virginia, the State budget cannot replace the Federal funding needed to 
run these programs.
    If this program is cut, where will the 7,353 West Virginia students 
go? How will they get the additional academic assistance that they 
need?
    Answer. While we understand that many parents appreciate the 21st 
Century Community Learners Centers program (21st CCLC) as a safe 
environment for their children during non-school hours, the intent of 
the program is to provide academic enrichment, exposure to subjects and 
experiences students may not otherwise have during the school day, and 
opportunities for family engagement. The primary purpose is not 
afterschool care, which the Administration views as a State and local 
responsibility. At the same time, local educational agencies can use 
funding under the Department's Title I Grants to Local Educational 
Agencies for many of the activities authorized under 21st CCLC.
                            handle with care
    Question. As you may know, there is a program in West Virginia 
called Handle with Care that works in collaboration between the West 
Virginia State Police and local West Virginia schools. This program 
connects children who interact with law enforcement at traumatic 
events, including domestic violence situations, drug raids, overdoses, 
and more, to school resources that are designed to provide the child 
with trauma-informed care. The alert enables the school to exercise its 
trauma-informed training that Handle With Care provides participating 
schools to ensure that the student is provided with the support they 
need to help handle the traumatic event. The goal of the program is to 
promote safe homes, schools, and communities, while ensuring that every 
child is able to thrive in school. In October, Congress passed the 
SUPPORT for Patients and Communities Act (SUPPORT) to address the 
opioid epidemic. Section 7134 of SUPPORT authorizes grants to improve 
trauma support services and mental healthcare for children and youth in 
educational settings.
    When will the Department begin solicitation of grant applications 
for programs authorized in Section 7134 of the SUPPORT for Patients and 
Communities Act?
    Answer. While Congress has authorized grants to improve trauma 
support services and mental healthcare for children and youth in 
educational settings under section 7134 of the SUPPORT Act, it has not 
yet appropriated funds for this new program, and thus the Department is 
unable to solicit grant applications.
             supporting effective instruction state grants
    Question. Like many States, West Virginia is facing a shortage of 
teachers. One program that is critical for retaining and recruiting 
more teachers is the Title II--Supporting Effective Instruction State 
Grant. This is a $2 billion program that the President's budget 
proposes for elimination. 95 percent of funds appropriated to Title II 
are pushed into the local school districts. Last year, West Virginia 
received about $16 million that enabled teachers and principals to 
receive support and training necessary for their schools. The purpose 
of the program is to increase academic achievement by improving teacher 
and principal quality. This program is carried out by: increasing the 
number of highly qualified teachers in classrooms; increasing the 
number of highly qualified principals and assistant principals in 
schools; and increasing the effectiveness of teachers and principals by 
holding LEAs and schools accountable for improvements in student 
academic achievement. Further, many local school districts used these 
funds to train their staff on mental health issues and how to identify 
and respond to students that may be living in a home that is exposed to 
substance use disorder.
    Given how critical these funds are to retaining and recruiting 
qualified teachers in West Virginia, how can the Department justify 
cutting this program outright?
    Answer. The Supporting Effective Instruction (SEI) State Grants 
program duplicates activities that may be supported with other Federal, 
State, and local funds; has not demonstrated success in contributing to 
improved teacher effectiveness or student outcomes; and makes formula-
based allocations to LEAs that often are too small to have a meaningful 
impact on student outcomes.
    Question. If these programs are duplicative, can you please 
identify which funds are specifically dedicated to teacher and 
principal professional development?
    Answer. The SEI State Grants program authorizes a wide range of 
activities, including professional development for teachers and 
paraprofessionals. In school year 2015-2016, the latest year for which 
information is available, 66 percent of districts used funds for 
professional development for teachers and paraprofessionals and 35 
percent used funds for class size reduction (52 percent and 25 percent, 
respectively, of funds). An LEA that identifies either activity as a 
strategy for responding to a comprehensive needs assessment may use 
Title I, Part A funds for the same purpose. The Title I, Part A 
program, funded at nearly $15.9 billion annually, also supports locally 
determined efforts to recruit and retain effective teachers.
                     trio student support services
    Question. In West Virginia, we have a lot of students who are first 
time college students, many of whom come from low-income families that 
don't have the resources or experience to help their children navigate 
things like AP classes, SAT tests, college applications, financial aid, 
and finally college itself. That is why programs like TRIO are so 
important. TRIO programs provide the support that first time college 
students need to thrive in higher education. Without them, we'd see too 
many students who wouldn't know what opportunities are available or who 
wouldn't have the emotional and academic support to succeed. Congress 
has continually invested in this program because the data shows it is 
working for students across the country. In West Virginia, more than 
4,900 students benefit from one of the TRIO programs. In fiscal year 
2019, Congress provided TRIO programs with an increase of $50 million 
bringing the total funding to $1.06 billion. The next grant competition 
for the TRIO Student Support Services competition is scheduled to take 
place during fiscal year 2020.
    Please describe the timeline for the commencement of the Student 
Support Services competition, any proposed priorities that the 
Secretary plans to institute, and what steps the Secretary will take to 
assure applicants will not be ensnared by past challenges relating to 
page limits, line spacing and other formatting issues.
    Answer. The Department has not yet determined the priorities, nor 
has it established a timeline, for the fiscal year 2020 Student Support 
Services competition. However, it is committed to giving applicants as 
much time as possible to develop high-quality applications and to 
awarding grants to successful applicants as early as possible. 
Consistent with the Secretary's policy memorandum prohibiting mandatory 
page limit and formatting requirements, applications will not be ruled 
ineligible for page limit, formatting, or minor budget errors.
   gear up (gaining early awareness and readiness for undergraduate 
                               programs)
    Question. GEAR UP is a comprehensive grant program, authorized by 
Title IV of the Higher Education Act, and is currently providing 
635,000 students across 46 States with the necessary support to ensure 
that they are ready for college and career. In fiscal year 2019 was 
funded at $360 million in the fiscal year 2019. The President's budget 
proposes to completely eliminate this program. The Department's budget 
justification for the GEAR UP program estimates that there will be 
upwards of $28.3 million available for new awards this year, but that 
new awards will be made only to State grant applicants. Until recently, 
ED's interpretation of 20 U.S. Code Sec. 1070a--22(a) ensured that a 
minimum of 33 percent of new funds would be awarded to State grant 
applicants, a minimum of 33 percent to Partnership grant applicants, 
and the remaining 33 percent to either State or Partnership applicants. 
The Department broke from this long-standing policy last year by 
severely underfunding State applicants and appears to be ready to 
depart from the spirit of the statute again this year. Congress 
believes the statute's emphasis on ``awarding grants'' clearly means 
the making of new grant awards, which would exclude ``non-competing 
continuation awards'' from the funding rule calculation. Please provide 
a detailed explanation on how and why ED has arrived at a policy 
decision that forgoes the minimum distribution requirements specified 
in statute. Additionally, the GEAR UP statute [20 U.S. Code 
Sec. 1070a--27(c)] provides the Department with a portion of each 
fiscal year's appropriation ``to evaluate and improve the impact of the 
activities assisted under'' GEAR UP.
    Answer. The Department has long interpreted and operationalized the 
funding rules outlined in Section 404B(a) of the HEA as applying to the 
total appropriation in a fiscal year, not the amount available for new 
awards. In fact, the Department has described this requirement as 
applying to the total appropriation in the ``Program Description'' 
section of the congressional justification for GEAR UP for several 
years. This legal interpretation is based on two key elements of the 
stem of Section 404B(a). The first states, ``In awarding grants from 
the amount appropriated under section 404H for a fiscal year, the 
Secretary shall make available . . . '' The Department considers all 
grants, whether new awards or non-competitive continuation awards, to 
be ``awards'', which therefore count toward fulfilling this 
requirement. For example, a GEAR UP grantee receives a new Grant Award 
Notification in each year of its 6 or 7-year grant. Second, Section 
404B(a) states, ``the amount appropriated under section 404H'' is, in 
fact, the total appropriation Congress provides in a particular fiscal 
year, not the portion of the funding remaining after making 
continuation awards. Therefore, taken together, the Department 
interprets this language as directing the Department to ensure that 
State and Partnership grants each receive at least 33 percent of the 
total appropriation.
    Question. For each fiscal year between 2014 and 2019, please 
provide the following information:
    How much did the Department set aside for this purpose in each 
fiscal year?
    What is the purpose and duration of each of the grants, contracts, 
or cooperative agreements made for this purpose?
    Answer. The Department's Institute of Education Sciences (IES) is 
conducting a rigorous study of a low-cost communication strategy 
designed to improve GEAR UP students' rates of FAFSA renewal, college 
enrollment, persistence and completion. The Department used $2.2 
million in fiscal year 2014 funding and $3.3 million in fiscal year 
2015 funding to support this study. No funding from fiscal years 2016 
to 2019 was obligated for this study. The Department expects to publish 
a report by fall 2019 assessing the intervention's impact on rates of 
college enrollment, FAFSA renewal, and college persistence through the 
second year.
    In addition, over the 6-year period, the Department has allocated a 
total of $876,000--approximately $146,000 per year--to support the 
collection, aggregation and analysis of GEAR UP project performance and 
student outcome data. The Department reports these data annually 
through the President's Budget. Finally, the Department is planning to 
allocate $1 million in fiscal year 2019 funding to support an 
evaluation of State implementation of the scholarship component of the 
GEAR UP program.
    Question. How is the Department planning to respond to 20 U.S. Code 
Sec. 1070a--27(d), which requires the Department to ``biennially report 
to Congress regarding the . . . evaluations conducted pursuant to this 
section''?
    Answer. The Department annually reports to Congress on the 
performance of the GEAR UP program through the Congressional 
Justification provided as part of the President's Budget Request. In 
addition to the performance information, the Department annually 
updates Congress on the status of the GEAR UP evaluation efforts the 
Department is pursuing.
                     full-service community schools
    Question. McDowell County in southern West Virginia is one of the 
poorest counties in the entire country. Reconnecting McDowell is a 
comprehensive effort to make educational improvements to give those 
students a chance to succeed despite the county's complex problems--
poverty, underperforming schools, drug and alcohol abuse, limited 
medical services, and inadequate access to technology and 
transportation. This program highlights the benefits and importance of 
full community schools and having the school be a place that serves the 
whole student. Through this program, schools don't just offer academic 
education, but physical and mental healthcare, counseling, and 
afterschool academic support. For the kids of McDowell County, these 
supports are as necessary to their education as the academic classes 
themselves. That is why, when the Senate considered the Every Student 
Succeeds Act, I worked with my colleagues to push for the Full-Service 
Community Schools program, which provides funding to programs like 
Reconnecting McDowell. So I was so disappointed to see that the 
President's budget request completely eliminates the $17.5 million in 
funding for the Full-Service Community Schools program. I have seen 
firsthand how a small investment like this program can make a huge 
difference in the life of a child and can help rebuild a community. 
Reconnecting McDowell is lucky that they are able to attract some 
private funding to support these efforts, but the Federal funding is 
still a critical part of what they do.
    What will happen to the students in communities like McDowell 
County if their schools are forced to cut back on the important health 
and wellness programs that set these students up for academic success?
    Answer. The 2020 request reflects the President's commitment to 
spend taxpayer dollars efficiently, in part by eliminating duplicative 
programs funding activities that can be supported with other Federal, 
State, or local resources. For example, to the extent that the problems 
that students face in McDowell County contribute to poor educational 
outcomes, the County's schools may use Title I Grants to Local 
Educational Agencies to address those problems as part of their 
comprehensive Title I schoolwide programs.
                    rural schools and school choice
    Question. I am very concerned about the impact that the President's 
budget request would have on rural schools. It proposes to cut $7.1 
billion from the Department of Education while at the same time 
requesting an increase to the Charter Schools program. Additionally, 
this budget would expand charter schools across the Nation that are 
financed by tax-payer dollars, but usually run independently of school 
district requirements. I understand that you feel very strongly about 
school choice, but as we discussed several times, ``choice'' simply 
doesn't make sense in rural West Virginia. We are seeing schools close 
and consolidate, not seeing new schools open, and we simply don't have 
enough resources to fully invest in the schools we have, much less 
dividing those resources further. Now, this budget proposes to reduce 
Federal funding for elementary and secondary education in my State by 
$30 million--more than 20 percent.
    Wouldn't your choice program simply leave holes in rural West 
Virginia school budgets created by your proposed cuts?
    Answer. The Education Freedom Scholarship proposal would create a 
$5 billion annual Federal tax credit, encouraging voluntary donations 
to scholarships for elementary and secondary students. Those 
scholarships can be used to support students in a variety of public and 
private settings, as determined by States. The voluntary donations do 
not shift Federal resources from public schools or teachers. As for the 
Charter Schools Program, the Department believes the creation and 
support of high-quality charter schools that increase options for 
students and parents continues to be one of the best investments the 
Federal Government can make to improve the overall quality of our 
education system. It also notes that there are 1 million students 
across the Nation who are on waitlists for charter school slots, many 
of them seeking alternatives to low-performing regular public schools.
    Question. How would it ensure that rural schools are not being left 
behind and left without the resources that they need to meet their 
student's basic needs?
    Answer. The proposed reduction to overall discretionary spending at 
the Department of Education for fiscal year 2020 represents less than 1 
percent of total national expenditures for elementary and secondary 
education. Moreover, the request protects funding for key programs that 
serve rural schools in West Virginia, including the $15.9 billion Title 
I Grants to Local Educational Agencies program and the $180 million 
Rural Education program. It's also important to keep in mind that State 
and local communities have primary responsibility for K-12 education 
under our system, including ensuring that schools have the resources 
required to meet students' basic needs. By law, most Federal education 
programs are intended to provide supplemental educational services 
rather than basic needs.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy
  application of fund to address implementation problems with public 
                        service loan forgiveness
    Question. On September 19, 2018, the Department of Education 
released the first comprehensive data for the Public Service Loan 
Forgiveness (PSLF) program. The data showed that the Department had 
received more than 28,000 applications for the program but had granted 
relief to just 96 borrowers--resulting in an unbelievable 99.6 denial 
rate. Following the Department's release of the PSLF data, the 
Government Accountability Office published an audit of the Department's 
implementation of PSLF, in which the Department was sharply criticized 
for gross mismanagement of the program. Now, many borrowers are 
understandably concerned that they may ultimately be denied loan 
forgiveness.
    The Department's budget request for fiscal year 2020 calls for the 
elimination of the PSLF program. In each of the past two fiscal years, 
Congress has appropriated $350 million to the Department to address 
eligibility issues in the PSLF program related to students being 
enrolled in ineligible repayment plans. The additional funding provided 
in the fiscal year 2019 Labor, Health and Human Services, and Education 
appropriations bill was meant to ensure that those who were rejected 
for loan forgiveness because they were in the wrong repayment plan but 
would otherwise qualify, could receive loan forgiveness.
    Please describe how the Department has applied the $350 million 
fund to fix the challenges the Department has struggled with during the 
implementation phase of the PSLF program.
    Answer. The $350 million in the fiscal year 2018 and 2019 
appropriations laws ($700 million total) funds are available, as 
defined under section 502 of the Congressional Budget Act of 1974, to 
cover the cost of Temporary Expanded Public Service Loan Forgiveness 
(TEPSLF) discharges. The TEPSLF opportunity allows borrowers to achieve 
the required 120 qualifying payments in a wider variety of repayment 
plans than under the original PSLF Program. In addition to this 
flexibility, however, the TEPSLF opportunity created complex new 
requirements for forgiveness specific to TEPSLF that require FSA to 
request income information from any borrower not currently enrolled in 
an income-driven repayment plan. As of March 31, 2019, 442 borrowers 
have received forgiveness through TEPSLF in the amount of approximately 
$17.6 million.
   number of applicants under temporary expanded public service loan 
                              forgiveness
    Question. How many borrowers have applied to receive relief from 
the $350 million fund after having loan forgiveness rejected through 
PSLF?
    Answer. As of March 29, 2019, FSA has received 13,652 TEPSLF 
requests from borrowers who have previously submitted PSLF 
applications.
       aid to borrowers whose pslf applications have been denied
    Question. Please describe what steps the Department is taking to 
help the 99.6 percent of student loan borrowers whose PSLF application 
was initially denied manage their student loan debt.
    Answer. PSLF is a complex program with many highly specific 
eligibility requirements. Furthermore, because the program was created 
in 2007 and borrowers had to leave school, enter repayment, and make 
120 qualifying payments before establishing eligibility to receive 
forgiveness, there has simply not been enough time for large numbers of 
borrowers to qualify. To this end, FSA's PSLF program data indicates 
the most common reasons that applicants are not meeting the program's 
requirements include not having made 120 qualifying payments (53 
percent), missing information on the application (25 percent), and not 
having eligible loans (16 percent).
    Federal student loan borrowers have a variety of options available 
to them for managing their student loan debt. The Department encourages 
borrowers to contact their assigned loan servicer directly for 
assistance with managing their debt. FSA's PSLF Help Tool, launched in 
December 2018, is also a valuable resource for borrowers who are 
interested in PSLF, including those whose applications for PSLF were 
denied. In particular, the tool helps borrowers assess whether their 
loans and employers qualify for PSLF and allows them to generate forms 
to take to their employer for signature and submission to FedLoan. It 
also uses the information FSA has about the borrowers' Federal student 
loans to explain other actions they should or must take if they want to 
receive PSLF, such as changing to an income-driven repayment plan or 
consolidating some or all of their loans. FSA has also increased the 
outreach provided to borrowers whose PSLF applications are denied and 
is planning further outreach to Direct Loan borrowers in the near 
future.
        measures to ensure pslf participants have loans forgiven
    Question. Please describe what the Department is doing to ensure 
that borrowers who have been participating in the PSLF program will 
ultimately be granted full loan forgiveness.
    Answer. The Department is committed to implementing PSLF as 
directed by Congress and will grant forgiveness to borrowers who 
successfully meet the program's complex statutory requirements. FSA 
provides a variety of resources and communications to borrowers 
interested in PSLF, and we are in the process of enhancing those 
resources and communications through Next Gen FSA to further improve 
borrowers' understanding of the program's requirements.
           compliance with gao recommendations regarding pslf
    Question. How has the Department complied with GAO's audit 
recommendations? How many of those recommendations have you met, and 
with which have you not complied?
    Answer. FSA has already complied or is in the process of complying 
with all four of the GAO's audit recommendations:

------------------------------------------------------------------------
            GAO Recommendation                       FSA Action
------------------------------------------------------------------------
FSA should develop a timeline for issuing   As the policy and guidance
 a comprehensive guidance and instructions   for the PSLF program are
 document for PSLF servicing.                finalized, FSA will deliver
                                             completed chapters of the
                                             servicing manual on an
                                             iterative basis, determined
                                             by the priorities
                                             identified in servicing.
                                             FSA anticipates completing
                                             the first chapters by July
                                             2019.
------------------------------------------------------------------------
FSA should enhance borrowers' ability to    In December 2018, FSA
 determine which employers qualify for       implemented an online PSLF
 PSLF.                                       Help Tool. The tool helps
                                             borrower assess whether
                                             their employers qualify for
                                             PSLF, among other
                                             functions. Later this year,
                                             FSA will implement the tool
                                             into the new Next Gen
                                             digital and customer care
                                             platform and begin adding
                                             additional functionality.
------------------------------------------------------------------------
FSA should standardize the information the  FSA has worked with all
 PSLF servicer receives from other loan      Federal loan servicers to
 servicers.                                  update their PSLF file
                                             layouts to ensure standard
                                             reporting across servicers.
                                             These updates have been
                                             completed by every servicer
                                             except one, whose file
                                             layout corrections will be
                                             completed September 2019.
------------------------------------------------------------------------
FSA should ensure that borrowers receive    FSA is reviewing all PSLF
 sufficiently detailed information from      borrower communications
 the PSLF servicer to be able to identify    from the PSLF servicer to
 any errors in the servicer's counts of      ensure that borrowers
 qualifying payments.                        receive sufficiently
                                             detailed information
                                             regarding payment counts
                                             and repayment history. New
                                             functionality being
                                             considered under the Next
                                             Gen FSA initiative is
                                             expected to provide
                                             borrowers with real-time,
                                             self-service access to
                                             information about their
                                             eligibility for PSLF and
                                             progress towards
                                             completion.
------------------------------------------------------------------------

         eligible uses for proposed school safety formula grant
    Question. The Department of Education's Budget Request for fiscal 
year 2020 emphasizes six major priorities, with one of them being the 
protection of students by promoting safe and secure schools. 
Specifically, the Department's budget request dedicates $200 million 
for school safety- related activities, including $100 million to create 
a formula grant program to improve school safety. Among other school 
safety related initiatives, the proposed grant program will provide 
funds for States and school districts to offer counseling and emotional 
support in schools with pervasive violence. The Department's budget 
request also calls for the elimination of the $1.17 billion Title IV-A 
of the Every Student Succeeds Act Student Support and Academic 
Enrichment (Title IV) Grants, which supports safe and healthy students 
including comprehensive school mental health counseling; drug and 
violence prevention; and training on trauma-informed practices.
    Please describe if any of these requested funds for school safety-
related activities could be used towards arming teachers.
    Answer. States would have the same flexibility around the use of 
the proposed School Safety State Grants regarding activities to improve 
school climate and safety as they currently have under Title IV-A 
Student Support and Academic Enrichment grants.
               offsetting elimination of title iv funding
    Question. Please describe how the $200 million for school safety 
related activities that will partially go towards helping schools offer 
counseling and emotional support in schools with pervasive violence 
will offset the elimination of $1.17 billion in Title IV grants that 
can be used already to hire such support staff.
    Answer. The $200 million proposed in the budget for School Safety 
National Activities will not offset the Title IV funds dollar-for-
dollar, but importantly, the activities authorized under the Title IV-A 
Student Support and Academic Enrichment Grants program generally can be 
supported with funds from other Federal, State, local, and private 
sources, including similarly flexible funds provided under the $15.9 
billion Title I Grants to LEAs program. In addition, while Title IV-A 
funds can be and are used for approximately 30 authorized activities 
related to providing a well-rounded education, improving student health 
and school safety, and supporting educational technology, our $200 
million request for School Safety National Activities is targeted 
solely on helping States and school districts improve school safety, 
including through the expansion of counseling and other efforts to 
provide social and emotional support to students.
                    definition of pervasive violence
    Question. Please describe the Department's method of determination 
for what constitutes ``pervasive violence'' in school will be under the 
proposed grant formula.
    Answer. The Project Prevent program, which supports local efforts 
to address the negative effects of pervasive violence on students in 
elementary and secondary schools, provides flexibility to applicants to 
identify the schools to be served by project activities and describe 
how pervasive violence in the community is specifically affecting 
students in those schools. Funds are awarded competitively, and amounts 
are based on the proposed scope and size of the project, not a funding 
formula.
  timing of provision of emotional support and counseling to address 
                            school violence
    Question. Considering the Department's requested funds for school 
safety-related activities, there is clearly a believed need for 
increased emotional support and mental health staff in schools across 
the country. Please describe why the Department believes providing 
emotional support to schools that have already experienced pervasive 
violence will be more effective in reducing the number of violence 
incidents in schools than providing mental health counseling to all 
schools regardless of past violent incidents.
    Answer. The $200 million budget request for School Safety National 
Activities would fund multiple programs that can support efforts to 
improve mental health services in all schools and not only those that 
have experienced violence, including School Climate Transformation 
Grants, Mental Health Demonstration Grants, and School Safety State 
Grants.
           budget amendment for reversal on special olympics
    Question. The Department of Education's budget request for fiscal 
year 2020 eliminates 29 programs within the Department. One of those 
programs, Special Olympics, helps expand the availability of Special 
Olympics education programs and supports full integration of these 
programs in classroom settings. This is now the third year the Trump 
administration has requested eliminating this program and Congress has 
rejected this elimination the past 2 years. In fact, Congress provided 
the program a $2.5 million increase in fiscal year 2019.
    President Trump stated on March 28, 2019, that he intends to fund 
Special Olympics, reversing your recommendation to eliminate the 
program.
    Does the Department of Education plan to submit an amended budget 
request to fund Special Olympics programs? When do you expect the 
Committee to receive such a request? Will the amended budget request 
also contain a budget amendment to offset the additional funds for 
Special Olympics programs?
    Answer. The President submitted a budget amendment to Congress on 
May 13th that included $17.6 million for the Special Olympics program 
for fiscal year 2020. Taken together with other proposals in the 
transmittal, the fiscal year 2020 net budget authority totals are not 
affected by this amendment.

                          SUBCOMMITTEE RECESS

    Senator Blunt. The subcommittee will stand in recess.
    [Whereupon, at 11:57 a.m., Thursday, March 28, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]