| | | | |  | | By Michael Stratford | Presented by Sallie Mae® | EDUCATION DEPARTMENT WON'T PURSUE CORINTHIAN EXECS: The Biden administration earlier this month moved to forgive all remaining federal student loan debt owed by more than a half-million borrowers who attended schools owned by the now-defunct Corinthian Colleges. The $5.8 billion of relief is the largest-ever single discharge of federal student debt. — Vice President Kamala Harris, who sued Corinthian for fraud when she was California attorney general, said that "Corinthian purposely and fraudulently went after the folks most in need." — Administration officials said the relief came after they "reached a determination that every borrower who attended Corinthian was subject to illegal conduct." — But the Education Department has no plans to recoup the cost of that loan forgiveness from any of the company's former executives or owners after department officials have determined they lack the legal authority to do so. — "We cannot currently hold former owners or executives of Corinthian accountable because none of them had signed the Program Participation Agreement for federal student aid that the Education Department had with Corinthian," an Education Department spokesperson said in a statement. (Bloomberg's Michelle Leder first reported the department's position). — A department spokesperson did not answer a follow-up question on who signed any of the various Corinthian PPAs over the decade it was in operation. Some PPAs were signed by Corinthian's last CEO, Jack Massimino, according to a 2012 court filing. Massimino and former CFO Robert Owen in 2019 agreed to pay civil penalties of $80,000 and $20,000, respectively, to resolve the SEC's allegations they had misled Corinthian investors. The pair did not admit to wrongdoing as part of the settlements. — Some Congressional Democrats have urged the Education Department for years to be more aggressive in going after the owners and executives involved in fraud or other misconduct at for-profit colleges. But department officials are now questioning whether they have the legal tools to do what some Democrats want to see. — James Kvaal, the undersecretary of education, explained the Biden administration's view in a letter to Rep. Bobby Scott (D-Va.), the chair of the House education committee, who had requested that the department hold executives personally liableat Corinthian and other shuttered for-profit schools, such as Dream Center and ITT Tech: "Unfortunately, the Department did not require the owners of those institutions to assume responsibility for losses by co-signing the PPAs of the institutions," Kvaal said in the March letter, obtained by POLITICO . "As a result, there is no clear path to collect liabilities from entities or individuals associated with the shuttered institutions." — Kvaal said the Biden administration agrees in principle with the need to hold individual executives and owners accountable. The administration plans to have more college owners sign onto their school's PPA under certain circumstances. The department announced a new policy on corporate liability in March. — Consumer groups are crying foul over the department's decision. Dan Zibel, vice president and chief counsel at Student Defense, said it was "undisputed" that the department has the authority to hold the owners of colleges accountable. "There are countless for-profit college executives who personally pocketed millions of dollars at taxpayer expense, while operating schools that ruined student lives," Zibel, a former department attorney, said in a statement. "The Department says that it's serious about accountability, but their choice to let these individuals off the hook is baffling." IT'S MONDAY, JUNE 13. WELCOME TO WEEKLY EDUCATION. Please send tips and feedback to your host at mstratford@politico.com or to my colleagues: Juan Perez Jr. at jperez@politico.com and Bianca Quilantan at bquilantan@politico.com. Follow us on Twitter: @Morning_Edu and @POLITICOPro. CORRECTION: The June 9 edition of Morning Education did not provide the proper context for a Morning Consult/POLITICO poll question about student debt forgiveness and income limits. It has been updated to reflect this context for survey results about what voters think about student debt forgiveness for individual borrowers making less than $150,000 or married couples making less than $300,000.
| | A message from Sallie Mae®: At Sallie Mae, being responsible goes beyond responsible lending. It means helping families make informed decisions about planning and paying for college, which might not include borrowing at all. As an education solutions provider, we offer free tools and resources to help all students and families calculate college costs, evaluate financial aid packages, and find scholarships. In fact, more than 24,000 students covered $67 million in college costs by using our scholarship search tool. | | | Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You'll also receive daily policy news and other intelligence you need to act on the day's biggest stories.
| | | SENATORS STRIKE DEAL ON GUN AND SCHOOL SAFETY LEGISLATION: On Sunday, a bipartisan group of senators announced they have a deal on a framework for gun safety legislation that they've been negotiating in the wake of the Uvalde, Texas, school shooting and a string of other mass shootings. — The framework is supported by 20 senators, including 10 Republicans. Senate Majority Leader Chuck Schumer said he supports the deal and will set a vote on it. More on the deal from POLITICO's Burgess Everett and Marianne LeVine. "While Sunday's announcement is a major breakthrough, translating a framework into an actual bill often proves challenging," they write. — The deal was hammered out by lead negotiators Sens.Chris Murphy (D-Conn.), John Cornyn (R-Texas), Kyrsten Sinema (D-Ariz.) and Thom Tillis (R-N.C.). "Our plan increases needed mental health resources, improves school safety and support for students, and helps ensure dangerous criminals and those who are adjudicated as mentally ill can't purchase weapons," all 20 senators said in a statement. — On guns, the framework calls for instituting an "enhanced review process" for gun buyers under 21 years old. The deal would also tighten laws around the licensure of firearms dealers and straw purchases, according to a summary provided by the senators. — The proposal includes funding "to expand mental health and supportive services in schools" such as "early identification and intervention programs and school based mental health and wrap-around services." — The senators said their deal would also include money for "programs to help institute safety measures in and around primary and secondary schools, support school violence prevention efforts and provide training to school personnel and students."
| | | | STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today. | | | | | | | | PURDUE UNIVERSITY HALTS INCOME-SHARE AGREEMENT PROGRAM: Purdue University last week announced it was suspending its income-share agreement program for new students amid growing regulatory scrutiny of the alternative college financing model. — Purdue's program — dubbed Back a Boiler — is among the most prominent providers of income-share agreements, under which investors provide funding to students to cover tuition in exchange for a percentage of their future earnings. The Purdue program has been widely cited, especially by conservatives, as an innovative way to help families pay for college. — But many progressives and consumer advocates view the income-share agreement model, at Purdue and elsewhere, as predatory and potentially illegal. They've been pressing the Biden administration to crack down on the industry. — The Biden administration has been moving in that direction. The CFPB has determined that income-share agreements are private education loans and subject to federal consumer protection laws. And the Education Department has warned colleges it plans to police how they offer the products to their students. — The Student Borrower Protection Center, an advocacy group, had urged federal regulators to investigate Purdue's ISA program in particular. Ben Kaufman, the group's director of research and investigations, said in a statement: "We expect Purdue to do no less than immediately relieve Back-A-Boiler borrowers of the pricey, unfair debt the school deceptively pushed them into, and to make borrowers whole for the legacy of this shameless scam." — It's unclear why the university stopped the program or whether it is a permanent decision. "The Back a Boiler program is not available for new applicants for the 22-23 aid year," the university said in a message posted on the program's home page. "Students currently enrolled in Back a Boiler are not affected." — A Purdue University spokesperson on Friday did not respond to a request for comment. — On Friday, Purdue President Mitch Daniels announced he would be stepping down as the head of the university at the end of the year. Daniels, the former governor of Indiana, has led the institution since 2013.
| | | | A message from Sallie Mae®:   | | | | | | ONLINE PROGRAMS DEMAND ACCESS TO SHORT-TERM PELL — A group of tech companies, community college leaders and online university leaders are urging Congressional leadership to include online-only programs in short-term Pell grant eligibility. — In a Monday letter to Congressional leadership, college leaders and the Skills First Coalition, led by IBM, argued that the exclusion would largely block adult students from accessing the financial aid for programs as short as eight weeks. They cited barriers to education for working adult students, including child care challenges and time constraints. — Leaving online programs out of short-term Pell, the group said, "denies access to a significant population of students who must receive the skills needed to be able to contribute to the workforce and improve their lives." — The letter comes as the House and Senate are looking to finalize the details of their Bipartisan Innovation Act, which chiefly focuses on the country's competition with China. A last-minute amendment added language to the House-passed proposal that would allow students enrolled in short-term career-training programs to be eligible for Pell grants. Bianca Quilantan has more here.
| | | | DON'T MISS DIGITAL FUTURE DAILY - OUR TECHNOLOGY NEWSLETTER, RE-IMAGINED: Technology is always evolving, and our new tech-obsessed newsletter is too! Digital Future Daily unlocks the most important stories determining the future of technology, from Washington to Silicon Valley and innovation power centers around the world. Readers get an in-depth look at how the next wave of tech will reshape civic and political life, including activism, fundraising, lobbying and legislating. Go inside the minds of the biggest tech players, policymakers and regulators to learn how their decisions affect our lives. Don't miss out, subscribe today. | | | | | | | | — The Western Interstate Commission for Higher Education announced that Molly Hall-Martin has been selected as the director for the WICHE State Authorization Reciprocity Agreement.
| | A message from Sallie Mae®: At Sallie Mae, our goal is to help families make responsible choices when it comes to planning and paying for college. We offer free tools and resources to help calculate college costs, evaluate financial aid packages, and discover and apply for scholarships. We also set up our students for long-term financial success by offering an easy option to reduce debt while still in school, saving them money in the long run. That's why Sallie Mae makes sense for students and families. | | | | | | — Rhode Island to improve civics education to resolve federal lawsuit: The Associated Press. — Why students are choosing HBCUs: "4 years being seen as family": The New York Times. — Summer-school students to wear masks in some places where Covid-19 cases are rising: The Wall Street Journal. | | | | Follow us on Twitter | | | | Follow us | | | | |
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