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What Did I Miss in Washington? June 12-June 26, 2017

June 26, 2017

The steady stream of news emerging from the nation’s capital can be overwhelming. NACUBO highlights key actions and provides the status of top higher education business officer concerns.

On Capitol Hill

Senate Committee Seeks Input on Tax Reform. Tax writers in the U.S. Senate are seeking “the best possible advice and insight from experts and stakeholders” as they work to overhaul the federal tax code. NACUBO encourages institutions to weigh in. Comments are due by July 17. 

Senate Holds Hearing to Review Potential GI Bill Changes. The Senate Committee on Veterans Affairs held a hearing on June 15 to review a dozen pieces of legislation—including a discussion draft version of an “omnibus” bill—that could potentially make changes to the Post-9/11 GI Bill. During the hearing, witnesses from the Department of Veterans Affairs and several veterans service organizations provided feedback on the various bills. NACUBO reviewed the discussion draft and found issues that might impact the business office—including improvements to information technology systems and increases to reporting fees—and provided a statement to the committee outlining areas of thanks and areas for improvement.

Senate Republicans Unveil Draft Bill to Repeal and Replace the Affordable Care Act. Republican leaders have made public a discussion draft bill to repeal and replace the Affordable Care Act (ACA). NACUBO, together with other higher education associations, is reviewing the impact of the proposals, from stress on state budgets (due to cuts to Medicaid) and the ripple effect on education funding to the impact on teaching hospitals because of an increase in uncompensated care burden. The bill does preserve ACA provisions that prevent insurers from denying coverage based on preexisting conditions and enables children to stay on their parents’ plans until the age of 26. The “Cadillac tax” remains, but implementation would be further delayed.

Administrative Action: Department of Education

ED Confirms Year-Round Pell Will Be Available Starting July 1. The Department of Education formally issued guidance on Year-Round Pell Grants, which were enacted through the FY17 spending bill and will allow students to receive aid during summer months. ED’s “Dear Colleague Letter” explains how institutions can begin awarding these additional grants on July 1, as long as the institution is using 2017-18 award year funds.

Trump Administration to Revisit Obama Borrower Defense and Gainful Employment Rules. ED recently announced new rulemaking efforts pertaining to gainful employment regulations and borrower defense to repayment. Affected institutions still must comply with gainful employment reporting requirements. However, for private institutions, implementation of new financial responsibility rules has been postponed indefinitely.

ED Announces Format for Posting Banking Arrangement Contract Data. On June 16, ED posted guidance on the format for disclosing contract data under certain banking relationships. All institutions with Tier One arrangements and most institutions with Tier Two arrangements must post the disclosures on the same webpage as their contract with the servicer or account provider by September 1.

On June 8, NACUBO submitted comments in response to an ED request for information on disclosure formats for financial accounts offered to students. In addition to asking for a delay of the July 1 implementation date, NACUBO also encouraged the department to provide two disclosure formats: one for prepaid cards and one for bank accounts. Specifically, NACUBO recommended ED adopt the Pew Charitable Trusts summary disclosure  rather than try to create its own.

ED Solicits Comments on Regulatory Burden. Last week, ED published a notice in the Federal Register soliciting feedback on "regulations that may be appropriate for repeal, replacement, or modification." The notice is directly in response to Executive Order 13777, “Enforcing the Regulatory Reform Agenda." Comments are due by August 21. NACUBO will be responding and will share additional information with members in the coming weeks.

Falwell to Be Part of Higher Education Task Force, Not Lead It. On June 8, Politico reported that Liberty University President Jerry Falwell Jr. shared he will not be leading a presidential task force on higher education. Instead, he will be part of a group of 15 institutional presidents examining higher education issues. Falwell had announced in early February that his task force would address burdensome regulations, though few details followed that statement. 

Other Administrative Actions

Trump Administration Rolls Back Federal Regulation on Apprenticeships. In what the White House deemed an attempt to “to promote affordable education,” President Donald Trump issued an executive order rolling back federal regulation of apprenticeship programs while simultaneously devoting more than $100 million in additional federal support for apprenticeship grants. The order removes the development of government-funded apprenticeship programs from the Labor Department’s purview and instead will allow private entities to create their own programs that will be submitted to the Labor Department for approval. The order also calls for the creation of a federal task force designed to promote apprenticeships.

Administration to Continue DACA Program. On June 15, Trump administration officials announced that they will continue the Deferred Action for Childhood Arrivals program, though they did not make long-term assurances. NACUBO joined the Hispanic Association of Colleges and Universities in December in expressing concerns for so-called Dreamers, undocumented immigrants who came to the United States as small children. The DACA program, instituted by the Obama administration, allows young undocumented individuals who meet specific criteria to register with the federal government without fear of deportation in order to work, pay taxes, and attend school in a legally sanctioned way. In February, NACUBO also endorsed the Bar Removal of Individuals who Grow our Economy (BRIDGE) Act.

IRS Reissues Proposed Partnership Audit Rules. The Internal Revenue Service (IRS) recently published regulations in the Federal Register similar to proposed rules the Treasury Department and the IRS were set to issue in January, but which were never sent to the Federal Register because the administration issued an executive order that acted as a regulatory freeze. The proposed regulations implement a provision Congress enacted in 2015 that has a 2018 effective date for new rules for determining, assessing, and collecting tax with respect to adjustments that result from an audit of a partnership. The IRS has set an August 14, 2017, deadline for receipt of written comments. A hearing on the proposed regulations will be held on September 18.

Judicial Action

Supreme Court Permits Limited Travel Ban. The Supreme Court has decided to allow the Trump administration’s travel ban (enacted through executive order) to go into effect with certain restrictions until the Court hears full oral arguments on the ban’s legality when it takes up its fall docket in October. The order had proposed barring individuals from Iran, Libya, Somalia, Sudan, Syria, and Yemen from entering the U.S. for 90 days and banning refugees from all countries from coming to the U.S. for 120 days.

Under the Supreme Court’s revised restrictions, individuals from the six banned countries with clear ties to individuals, businesses, or organizations in the United States may still be permitted entry to the country. The justices noted that admitted students or those with other ties to U.S. universities would likely be among this group of exempt individuals.
In recent months both the 4th and 9th Circuit Courts of Appeal have issued rulings upholding injunctions barring implementation of the travel ban; the case came before the Supreme Court on a Justice Department appeal of the 4th Circuit’s decision and has been combined with an appeal of the 9th Circuit’s decision.

Advocacy

NACUBO Weighs in with Congress and Trump Administration on F&A Proposal. The Trump administration has included a suggested 10 percent cap on facilities and administrative (F&A) costs for National Institutes of Health (NIH) grants in its FY18 proposed budget. This proposal was a part of a $7.2 billion, or 21 percent, proposed cut to NIH’s current budget overall. Support for this proposal has been widely touted by Health and Human Services (HHS) Secretary Tom Price, including in front of before a Senate appropriations subcommittee. NACUBO, along with other associations including the Association of American Universities, the Association of Public and Land-Grant Universities, and the American Council on Education, a sent letters to Price, Director Mick Mulvaney of the Office of Management and Budget, and the chair and ranking member of the subcommittee, expressing strong concern about the proposal to cap F&A reimbursements.

Awaiting Action

Overtime Rule. There are no significant developments to report on the status of the Department of Labor overtime rule.

1098-T Reporting. The IRS has not yet issued final regulations on 1098-T reporting following its Notice of Proposed Rulemaking that called for significant reporting changes to the form.

Previous Edition
What Did I Miss in Washington? May 31, 2017-June 12, 2017

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Liz Clark
Director, Federal Affairs
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