nasfaa off the cuff – episode 116 transcript · jill desjean: spanish. justin draeger: okay. jill...

NASFAA Off The Cuff – Episode 116 Transcript Justin Draeger: Hey everyone, welcome to another addition of “Off The Cuff.” I'm Justin

Draeger.

Joelle Fredman: I'm Joelle Fredman, one of our Today's News Reporters.

Erin Powers: I'm Erin Powers our director of communications.

Rachel Gentry: Hi, I'm Rachel Gentry, assistant director of federal relations.

Jill Desjean: Jill Desjean, a policy analyst with the policy and federal relations team.

Justin Draeger: Welcome everybody. Now we have a couple new folks around the table. People have heard from you before Joelle.

Joelle Fredman: Mm-hmm (affirmative).

Justin Draeger: And Jill you've been on as a featured special guest.

Jill Desjean: Yes.

Justin Draeger: You're like our celebrity guest.

Jill Desjean: Right.

Justin Draeger: And I'll talk about that in just a second. Jill, you did become like a celebrity this last summer, so I want to talk about that.

Jill Desjean: I'm so excited to talk about that.

Justin Draeger: But we have some new folks that are joining us for the podcast. Erin, Erin Powers who's our director of communications. Erin how long have you been with NAFSAA?

Erin Powers: Six and a half years.

Justin Draeger: Okay, wow. That went by really fast.

Erin Powers: I know. For you it did. I'm just kidding, I love it.

Justin Draeger: Rachel, you just joined. How long have you been at NAFSAA?

Rachel Gentry: Coming up on two months.

Justin Draeger: Two, that went by really fast.

Rachel Gentry: It went by very quickly. Yes.

Justin Draeger: Okay, wow.

Justin Draeger: So two months and six and half years. Now, people obviously if you've been a long-time listener of “Off The Cuff,” Stephen is gone and went to graduate school. I heard from Stephen last week. He seems to be doing fine. He's already got an internship, still in higher education as he pursues his masters. So doing well.

Justin Draeger: Megan is out on new parent leave. So big summer news for Megan. She had her baby girl, I don't even remember what day, early August? Right? It was early.

Joelle Fredman: That's right. Yeah.

Justin Draeger: Yeah, something it was early, and she expected her to come early, and she and baby and older sister are all doing great. Allie is off taking some personal time this week, but she will be back with us. So we've got all these folks here, and people might be thinking like, "Oh, geez, like NAFSAA brought in the B Team," yeah, they might be thinking that. I just want to say, I'm going to put my foot down right here. No. This is the B Plus Team at least. At least B Plus.

So, we're going to be bringing in some folks from time to time to help supplement since we're down three people this week, but two usually. But we're going to keep it going, and the nice thing about NAFSAA is I do feel like there's a lot of overlap so people who kind of jump in, and we have a very ... I mean I'm very skewed because of probably where I sit in the organization, but I feel like we have a very team-oriented environment. Everybody nod their heads and say-

Jill Desjean: Yes, definitely.

Justin Draeger: Okay. Yes. Right? Do you feel like people jump in all the time?

Erin Powers: Yeah. Yeah, and there's a lot of crossover between comm and policy and we're all kind always wearing all the different hats and sharing responsibilities. So yeah.

Justin Draeger: Okay. So, real quick for people that don't know, at NAFSAA, in DC really, like August, for our training staff it's about the same, August is busy for them because they're dealing with all the questions coming in from NAFSAA members. NAFSAA members are obviously very busy in August, because you have disbursements and enrollments and everything happening, move-ins, and everything happening in August.

But for policy it tends to be, I would say, a slower month. That's fair right?

Jill Desjean: Definitely.

Justin Draeger: Yeah. Congress leaves, usually, they go into recess. They go into in-district work periods. So, we do some conversations with folks on the Hill, but that's when a lot of people on Capitol Hill also take vacation, because it's like the only significant down time.

So, let's just really quickly, I want to hear, so for our members it's crazy busy. For policy team it's a little quieter, for communications usually maybe a little quieter, because there's not so much stuff emanating from the Hill that we have to react to.

Erin Powers: That's true. There's always something weird that bubbles up that we don't expect, although that happened in July this year, which I know we're going to talk about.

Justin Draeger: Yes. But your biggest, I'd love to hear your biggest summer whatever, what was it, Joelle?

Joelle Fredman: A personal thing.

Justin Draeger: Okay.

Joelle Fredman: So I had a baby in March.

Justin Draeger: Mm-hmm (affirmative).

Joelle Fredman: So she started rolling this summer. So our big thing, well just one moment I could think about is that we were around the apartment, and we heard her crying, and we couldn't find her for the first time. She had barrel rolled, and she was half under the couch, with one foot sticking out.

Justin Draeger: Aw.

Joelle Fredman: So that is how I describe, that's how our summer's been. New little things that are just shocking us and scaring us but are also adorable.

Justin Draeger: Yeah, like when they're mobile it's like a whole other world.

Joelle Fredman: Yeah.

Justin Draeger: All right, Erin?

Erin Powers: So I had a celebrity siting over the summer, and immediately came into the office on Monday, it was on a Saturday, I came into the office on Monday and I think I slacked Allie and Joelle right away and was like, "You guys won't believe who I met." I didn't even meet her. I just saw her.

Justin Draeger: Wait, where was it?

Erin Powers: So it was at a restaurant.


Erin Powers: My mom and I were going to a show at the Kennedy Center, which is the performing arts center in DC, and the show was at 7:00 so we went out to a really, really early dinner at a restaurant near the Kennedy Center, and kind of struck up a conversation with the manager, who told us that he'd just gotten off the phone with the head of security for one of the Chief Justices, and I immediately started freaking out thinking, "Oh my God is this going to be Ruth Bader Ginsburg?" Because I'm a total fan girl. I saw her bio pic last year.

Justin Draeger: She's very hot this year.

Erin Powers: Oh, yeah.

Justin Draeger: This is like the year of Ginsburg.

Erin Powers: This is her year, right. The notorious RGB.

Justin Draeger: Right.

Erin Powers: Yeah, so I kind of talked myself down and 10 minutes later she walked in in a beautiful blue caftan glowing, looking really nice and healthy, with her grandson. She looked really healthy, which was awesome, and everybody started clapping when she came into the restaurant and she kind of gave us a hand gesture that said, "Stop, I'm here to eat with my grandson."

Justin Draeger: What was the hand gesture?

Erin Powers: It was kind of like a tamping down situation.

Justin Draeger: Oh, okay.

Erin Powers: Like stop, stop.

Justin Draeger: I wasn't sure.

Erin Powers: Like thank you, but stop. Stop.


Erin Powers: So she sat down and it took everything in me not to run over there and just completely nerd out about how much I love her. But that was my most exciting moment of the summer.

Justin Draeger: You did not talk to her?

Erin Powers: No, sadly I didn't.

Justin Draeger: You know what? I respect that. We've had a lot of conversations with the previous, I'll call them the old cast of “Off The Cuff.” We had a big division about do you approach celebrities or do you not? I fall down on the side of, "Let them be, they're just people."

Erin Powers: Yeah.

Justin Draeger: Rachel do you have anything? I didn't prep you, I didn't give you this as a question.

Rachel Gentry: I got a new job. I'm going to go with that. It's pretty straightforward.

Justin Draeger: All right.

Rachel Gentry: Graduated, got a job.

Justin Draeger: Yay! Mission accomplished.

Rachel Gentry: Mission accomplished.

Justin Draeger: Your parents are very pleased.

Rachel Gentry: Yes, quite pleased.

Justin Draeger: You're not living with them?

Rachel Gentry: I am not living with them.

Justin Draeger: Yeah.

Rachel Gentry: They're also quite pleased about that.

Justin Draeger: That's great. All right. Jill, you might have one, but I have one for you too.

Jill Desjean: Okay. I'm excited to hear yours.


Jill Desjean: Mine is, you guys know I'm a bit of a planner and bit of a worrier, so I was all set for school to start in June. My kids, my youngest kids were in a lottery to get into this language immersion program that we really wanted them to do. We found out Thursday.

Justin Draeger: What was the language?

Jill Desjean: Spanish.


Jill Desjean: So they got in on Thursday, which is great; but we went to the beach, so we did the weekend just scrambling and getting ready; but I just got a text from my friend who has a child at the school, and they are physically present at the new school. Because I just sent them on the bus, and I was like, "I have to go do the podcast."

Joelle Fredman: Hope you get there.

Jill Desjean: I hope it's going to be okay. So they are there.

Justin Draeger: Today was the first day?

Jill Desjean: Today was it.

Justin Draeger: Oh, I'm so sorry.

Jill Desjean: So they are physically present in their new school and ... Well yeah, nobody knew because they told me on Thursday.

Justin Draeger: Oh, okay.

Jill Desjean: So yeah.

Erin Powers: Jill I feel like NAFSAA's robbing you of all your big events this year. Like on your birthday we had you stay late, everybody else was away doing things.

Justin Draeger: So that was my summer memory for you. It was at the beginning of August, right? Or somewhere middle of August?

Jill Desjean: Well yeah, so my birthday's August 16th, and I misunderstood the request. I would not have volunteered to do that on my birthday. I thought it was Friday, the ninth.

Erin Powers: Yeah.

Justin Draeger: So for folks that don't know, again, August is a bit of a slower month for us. So I scheduled out that week and I got a text from you Erin that said, that there was a TV show, a network TV show that wanted to do an interview about legal guardianship's right? Was that what it was about?

Erin Powers: Yes, The Doctors.

Jill Desjean: Yeah.

Justin Draeger: The Doctors.

Erin Powers: Yeah.

Justin Draeger: Which because I'm working during the day I don't know, or am not familiar with this show. I assume it's like a talk show with doctors?

Jill Desjean: It is. They do not appear to talk about medicine, but the releases they had me sign were hysterical. Because it was the stuff about well, if you get a procedure that you're not happy with you can't sue us. You might get a diagnosis on air that doesn't make you happy.

Justin Draeger: So you were like, "What did I agree to do?"

Jill Desjean: I'm signing and I was like, "I don't think any of this is going to apply to me."

Justin Draeger: Then Kate brought you out and of course they had their knives, and they were ready [crosstalk 00:08:40].

Jill Desjean: Yeah. So, this nose is really nice now.

Justin Draeger: But no, so first of all I didn't know what The Doctors was. So Erin I think you texted me or something, and I was like, "Jill."

Jill Desjean: Yeah.

Justin Draeger: Also, when I saw the time, and it was like 4:00 or 5:00 on a Friday.

Jill Desjean: Yeah it was 5:00 on a Friday, because they tape on the West Coast.

Justin Draeger: A Friday in August.


Justin Draeger: So, I'm just sort of like, "No, nobody's ... I mean most people are not working in the district.”


Justin Draeger: Okay? We're all working really late the rest of the year, but I'm in August. So I was like, "Jill would be great for this one."

Jill Desjean: Thank you.

Justin Draeger: Then you accepted so enthusiastically, and then you didn't realize it was your birthday.

Jill Desjean: I didn't, no.

Justin Draeger: Oh, because you forgot that your birthday ... You didn't realize, Erin didn't give you the date.

Jill Desjean: Erin gave me the date, I didn't read it carefully. It was like a Wednesday and she said, "On Friday, August 16th," and I saw on Friday, and it was like Friday the second when she sent it.

Justin Draeger: Oh.

Jill Desjean: I thought it was for Friday the ninth.

Justin Draeger: Oh.

Jill Desjean: So I said, "Okay," and then I wasn't going to be like, "Oh guys I'm not doing it, it's my birthday." I didn't have any plans. So, I just stayed.

Justin Draeger: I love the fact that you stayed late. I love the fact that you went to a studio. Were you with them in person?

Jill Desjean: No, I was here in the office.

Justin Draeger: Oh, that's right, because you moved all the furniture.

Jill Desjean: I rearranged the whole kitchen. Yeah.

Erin Powers: Yeah.

Jill Desjean: I created my own set.

Justin Draeger: When is this airing?

Erin Powers: I don't know, I need to check.

Justin Draeger: All right.

Jill Desjean: Yeah, they said they'd let me know, but I haven't heard anything.

Justin Draeger: That's great. I want to find out when that's happening.

Justin Draeger: My big summer thing, two things. One is I separated a joint in my shoulder, it was very painful. What I found is a little experiment, is if I'm totally inactive for four weeks, I gain roughly two and a half pounds per week. So that's where I am

for the month of August. Very depressing, but I started jogging yesterday. A light jog, because I'm hoping to get back to like full activity here in the next week.

Justin Draeger: Second thing, have you heard of TikTok?

Joelle Fredman: Yes.

Jill Desjean: Yes.

Justin Draeger: Okay, good. You know it because you are hip, right? You're-

Joelle Fredman: Because I'm hip.

Justin Draeger: You're hip, and you know it because your kids? Or how do you know it?

Jill Desjean: I listen to podcasts that talk about what the young people are doing. They were talking about how the young people were using the TikTok.

Justin Draeger: Okay. To our listeners who may range from millennial to boomer, I'll just say I had no idea what this was. But in August I spent a significant more time with my family than I would normally, and my daughter and wife were just so enthralled with their phones, more than usual. So I'm like, "What's happening?" Because Instagram isn't that enthralling, and Facebook my daughter's not on. Come on, Facebook is tired.

Justin Draeger: So, I'm like-

Jill Desjean: You're offending half our listeners I'm sure.

Justin Draeger: I'm sorry, I know; but people have to know. Facebook is also stealing all our identities and privacy, and swaying elections. But the TikTok is like, the only way I can describe it is like my daughter tried to explain it to me, and failed. But how would you describe it Jill? Since you are familiar with it.

Jill Desjean: I have not seen it, but what I heard it is like a never-ending feed, which contributes to the addictiveness because everything else sort of ends.

Justin Draeger: Yes.

Jill Desjean: And it's just these really brief videos, and I guess a lot of them are people just like singing along to their favorite songs.

Justin Draeger: It's like there's challenges. They issue challenges.

Jill Desjean: Okay.

Justin Draeger: How would you describe it Joelle? Are you on TikTok?

Joelle Fredman: I'm not on, but I have the app, and on the occasion I endlessly scroll.

Justin Draeger: Yes. I downloaded the app and there's like challenges. So people try to mimic each other, like the song of the summer, which I didn't know until I watched the VMAs with my daughter, but the song of the summer was Lil Nas X ...

Joelle Fredman: Oh, Old Town Road?

Justin Draeger: Old Town Road.

Jill Desjean: Yeah.

Justin Draeger: Yes.

Joelle Fredman: That's a good one.

Justin Draeger: Well, there's like a whole ... There's like 1.5 bajillion videos on TikTok of people doing the Old Town Road dance.

Joelle Fredman: That sounds right.

Justin Draeger: So anyway, it's like insane. It's better than any of the other social media sites. I've probably in the last two weeks spent, I don't know, 40 hours just scrolling TikTok at night, not during working hours.

But that led to me question Erin, since you're the director of communications, what is our TikTok media strategy?

Erin Powers: Oh, God. I'm very scared that you asked me. Justin just told me what TikTok was last week, and showed me a bunch of videos and I was thinking, "Is there a way that we could leverage this?" I think the answer's no.

Justin Draeger: Well, what about if we had Joelle do a dance to Old Town Road?

Erin Powers: What do you think Joelle, are you game for that?

Joelle Fredman: I'm going to pass.

Erin Powers: When we find a staff member that's willing to do that, maybe we'll start a TikTok.

Joelle Fredman: But we do have a new reporter coming in.

Erin Powers: That's true.

Joelle Fredman: Maybe she'd want to take that on.

Justin Draeger: Rachel's only been here two months, so we could have her do it.

Joelle Fredman: Right.

Erin Powers: Yes, it's all part of the NASFAA hazing.

Justin Draeger: All right. Okay. That was my summer. Let's actually get into some policy stuff. Let's do a little bit like looking back at the month of August, and then looking forward. Let's start with the looking back.

This happened like right after we went on break. This thing erupted from the Wall Street Journal and was it ProPulica? I can't remember. Yeah, it was ProPublica, about legal guardianships. Jill do you want to catch us up?

Jill Desjean: Yeah, so we have our own financial aid scandal, but no celebrities like Varsity Blues, unfortunately.

Justin Draeger: Right, and no financial aid administrators, which is also good.

Jill Desjean: Yeah, relief.


Jill Desjean: Yeah, so families were transferring their sort of late high schooler students, their children, transferring their guardianship to friends, relatives, anybody else to establish them as independent for purposes of filling out the FAFSA. These students weren't making a lot of money, didn't have any assets in their names, and were able to qualify for Pell Grants, they seemed to be kind of concentrated in the greater Chicago area. I guess in these wealthier Chicago suburbs.

Justin Draeger: There were like two ... There was like one law firm, or two lawyers that were signing up all the clients, right?

Jill Desjean: Yeah, one law firm. Right. They were advertising like college financing, what do you call it? Consulting, kind of services. They were like, "Here's another way we can help you to get a bunch of money. Transfer the guardianship you can get Pell Grants, state grants, institutional grants in some cases," they were saying they could save you up to $20,000 a year.

The thing about this was that it was perfectly legal. The guardianship transfer process is not as complicated as you might expect for something that goes through the courts. Even for the purpose of getting for financial aid it was fine. People put on their applications, "Why do you want to transfer guardianship?" They said, "It's in the best interest of the student. I'll get them more financial aid this way."

Justin Draeger: Right. The other piece that's difficult about this is this changes state by state. One state might award a legal guardianship based on something, and another state might award it on something else. They might not even call it] legal guardianships, but they are legal guardianships.

Jill Desjean: Right. Right.

Justin Draeger: Custody or ...

Jill Desjean: Mm-hmm (affirmative).

Justin Draeger: So this happened in a very localized area, and I would say this is the sort of stuff the press love. Even though it applied to, when you think of the 19 million FAFSA filers, this probably applies to what like a couple dozen?

Jill Desjean: A couple dozen, yeah.

Justin Draeger: And even the number of people that actually indicate legal guardianship, not even this loophole, but who become independent for legal guardianship is probably, I would venture to guess, less than 1% of the total FAFSA filers.

Jill Desjean: Yeah, it's not a common way to establish independent status at all. Yeah.

Justin Draeger: Right. So, I would say as soon we were in the Wall Street Journal article and then from there is just sort of took off.

Erin Powers: Yeah, it really ballooned. Actually we got word that the Wall Street Journal was writing this article, so I think we proactively reached out to Doug, who was working on this story, and once we got quoted in that it just kind of ballooned for us. So we started getting tons and tons of calls, we ended up being cited in The Washington Post, Inside Higher Ed, The Chronical of Higher Education, the Associated Press, USA Today, The New York Times, and a handful of smaller publications, all talking about this one story even though it was such a concentrated area.

Justin Draeger: Yeah, and we did a couple TV interviews you did with The Doctors, I did one with Scripps.

Jill Desjean: Yeah.

Justin Draeger: So those sort of run in local markets.

Jill Desjean: Yeah. I think the biggest one we did was with Good Morning America, and actually it was Megan Coval's first week working from home in anticipation of baby number two coming; and I think you were wrapped up with meetings and everyone else here was as well. So I had to text Megan an SOS that said, "Hi, can you get downtown in the next 30 to 40 minutes to tape for Good Morning

America?" We had a panicked conversation back and forth, but she did really, really well.

Justin Draeger: She did great.

Jill Desjean: Yeah.

Justin Draeger: The point we kept making, I would say myself, Megan, you, Jill, the point we were making is like one this is egregious, I mean it's legal, but it's certainly unsavory in terms of gaming a system, even if legally. Two, this is a very small population, so we want to proceed cautiously.

Three, aid offices have some tools, and they might want more, particularly schools that are seeing this most acutely; but they have some tools at their disposal. And we put out some guidance to schools like, if you suspect that a person has legal guardianship solely for financial aid purposes, the school can basically… and if they see some information that might look a little strange to them, they could ask the student, "you're independent, how are you supporting yourself? And is that reflected on the FAFSA?”

I can't remember which question, but there is a question that's supposed to be like a catch all.

Jill Desjean: Yeah, I think it's 45-J. It's an untaxed income question that asks, "Did you get any cash support from anybody?" So if you're independent and you make $1,100 a year, and you're going to a $40,000 a year institution and you're living on campus, and you have a nice handbag, odds are good that somebody gives you money for all those things.


Jill Desjean: They should be reporting it on the FAFSA. So yeah, schools can go after students and say, "Can you just let me know and how much it was?"

Justin Draeger: Or if they only took grants, but they're still a lot of remaining need, but no loans. It's sort of, "How are you coming up with the money to pay for the rest of your education?" Would be a valid question. If they see conflicting information like straight out, I have zero income, I'm independent, and I have all this remaining need. If the school deemed that as conflicting, they would have to dig into it, because you have to resolve conflicting info.

Not saying they have to look at every one of those, but if they view it as conflicting. So, the thing that's always a little bit scary about this is it generates so much press that the state of Illinois had a hearing on this, lawmakers reached out to us and wanted to introduce legislation and we just want to be careful that we don't have 19 million students jump through hoops because of a couple dozen.


Justin Draeger: So, that's the balancing act that we're trying to accomplish. We will see where this goes from here, but for now it seems to be leveling off in terms of coverage.

Jill Desjean: Yes, finally. Yeah.

Justin Draeger: Okay. Another thing looking back this last month, some concerns seem to be rising up about tax filings and the FAFSA now that we have the next tax law. Jill you want to catch us up here?

Jill Desjean: Sure. Yeah, so the Tax Cuts and Jobs Act that the president signed into law in late 2017 required some changes to the federal tax forms, because there are certain data items on the old tax forms that no longer apply. Things like personal exemptions are no longer a thing, so the IRS had to tweak the forms to accommodate the new law. In that process they decided to streamline the forms and get rid of the 1040-A, and the 1040-EZ, which were part of the filtering process to qualify people for the simplified need formulas for federal aid, and the simplified application that goes along with that.

So, this became effective for the 2018 tax year, so we used these new tax forms when we all filed our taxes in April this year, but because of PPY it's not going an issue for financial aid, aside from dependents, professional judgment type stuff. It won't be an issue for financial aid until 2020/21 award year.


Jill Desjean: So, the Department put out a request for public comment for their proposed changes to, instead of ask did you file this A or EZ form, did you file this new schedule called the Schedule One? But the problem is that the Schedule One has all these questions that used to be on the 1040-A. So you'd be taking out a bunch of people who used to qualify for the simplified need formulas, by just asking that question.

Justin Draeger: So they're going to see a lot more questions, where they'll presumably just report 0, unless we find a work around, and do we have one?

Jill Desjean: Yes. Yes.


Jill Desjean: It's not perfect, and the A, EZ question wasn't perfect either, because it asked did you file it or were you eligible to? So there were tons of people who did a 1040, because they used H&R Block and they didn't know that they were eligible to use the other form. So a lot of people didn't get to take advantage of the simplified formula. That's probably what's going to happen under the system now.

Now instead of the question just asking, "Did you file Schedule One," it's "Did you file Schedule One, unless it was to claim one of the following," like nine income items. So, a question worded like that is really hard to read and hard to understand. It captures things like student loan interest deduction, capital gains, the dividends from the Alaska Permanent Fund for Alaska residents, all of those things used to be on the regular tax return, are now on this Schedule One.

Justin Draeger: So, will this be able to be picked up from the IRS data retrieval or no? Is the Department working on this connection with the IRS? It that in the plans?

Jill Desjean: Yeah, so our understanding is they might be able to verify if somebody filed a Schedule One, but they might not be able to verify which line items on the Schedule. So if they only filed it to claim a capital gain, it would only be someone looking at the form…

Justin Draeger: Right, because they consolidated all of these questions into the form, so you can figure out which forms; but they can't figure out which questions on the forms actually apply?

Jill Desjean: Yeah, that's my understanding.

Justin Draeger: Yeah, which makes sense because the IRS continues to say that they can't index individual questions and get them over to the Department fast enough.


Justin Draeger: We think they can, they just need some legislative motivation to maybe push them along. So, that's bigger under making the FAFSA easier.

So, worst case scenario though for students, the other side of that is, students who should have qualified for simplified needs are ultimately going to end up answering more questions.


Justin Draeger: It's not like it's going to change their FAFSA outcome.

Jill Desjean: Hopefully it won't, and if it does I guess you can argue then they should have been filling out the whole FAFSA the whole time.


Jill Desjean: Because if they had significant assets it would have been nice to have caught those in the need analysis.

Justin Draeger: For people that are really big on program integrity, this sort of thing drives them nuts. I get that, but I also try to think big picture, any time we're using a proxy to

try to determine a means tested benefit, there's always going to be this sort of leakage. It's just determining the tradeoffs we're willing to have. Are we willing to have some students who don't fall under simplified needs, or might have a false positive, in exchange for getting a whole bunch of other students? So those are always the tradeoffs we have to make, but something that certainly people that are helping students fill out the FAFSA want to be aware of.

All right, some other controversy this last month. The CFPB made a new appointment on their student loan ombudsman. Erin you want to catch us up?

Erin Powers: Sure. So as a refresher, the private student loan ombudsman position at the CFPB or Consumer Financial Protection Bureau has been vacant since last August when Seth Frotman resigned after seven years due to some issues with leadership.

Justin Draeger: Yeah, for people that don't remember, he like ... Take this however you want, the guy left because he said that he was being restricted in how well he could perform his job, and then he immediately went out and started an advocacy organization.

Erin Powers: Exactly.

Justin Draeger: So on the one hand you can view that as this guy was frustrated, he's going to do something about it. One the other hand, it did strike me as ... I don't know, maybe a little opportunistic. He was a holdover from the Obama Administration, and ...

Erin Powers: Yeah, and he took a couple people with him when he left.


Erin Powers: To his new organization. So after nearly a year of that position being open, the CFPB announced in August, this August that it's appointed Robert Cameron to serve as its new private education loan ombudsman. In that role he's going to be responsible for receiving, reviewing, and attempting to resolve complaints from private student loan borrowers, as well as compiling and analyzing complaint data on private education loans and making appropriate recommendations to leadership and to Congress.

So the thing that's creating the hubbub here is that Robert Cameron most recently worked for PHEAA, the Pennsylvania Higher Education Assistance Agency, which as we know is one of our federal student loan servicers, and in that role he was responsible for litigation, compliance, and risk mitigation efforts. He also saw compliance activities at the agency.

Justin Draeger: And they had some findings.

Erin Powers: Right, exactly. They had some audit findings.

Erin Powers: So lawmakers, a small handful of lawmakers came out last week, Congressman Maxine Waters pushed out a statement expressing some concern about the appointment, and Senator Elizabeth Warren sent out a handful of letters.

Justin Draeger: Senator Elizabeth Warren and presidential hopeful.

Erin Powers: Right, exactly. That's an important thing to include.


Erin Powers: Sent out a handful of letters to leadership at CFPB arguing that Cameron is not qualified to assist student borrowers due to his past connection with PHEAA. In the letters she pointed to PHEAA's history of compliance issues, which we just talked about, and called the move, "an outrageous slap in the face to student loan borrowers across the country." So not pulling any punches there.

Justin Draeger: So yeah, first of all welcome to DC, Robert.

Yeah, here's my thought on this, and I'd be interested to what you all think. I sort of feel like audit findings sometimes give, and schools know this better than any, audit findings often get equivocated to wrongdoing. Sometimes they're the same and sometimes they're not. Audit findings sometimes just probe and find weaknesses in a system, and then you fix those weaknesses. That's why NAFSAA has an annual audit and thankfully our audit's been clean for eight years.

But they don't necessarily mean malfeasance. It doesn't necessarily mean that there's been fraud or abuse, and I would just say that there's always this tension between, "Oh, did you hire an insider, or did you hire somebody who was inside and actually knows," for lack of a better term, where to find all the bodies? Or where all the skeletons are? Somebody from the inside might actually have more insight into where all the problem areas are with the servicers.

I mean when we hire for any position at NAFSAA, and I would guess this is true for anybody that's hiring anyone, you look for people who know what you're hiring them for. That's what counts, experience. So, would you hire someone who doesn't know anything about this? Or would you hire someone with experience?

So I guess what I would say is for me, the jury's out, let's see what happens in this position. The nice thing about the government is, while people might hate all the red tape, is that you have people that are appointed to watch industries and then you have people within the government who are supposed to watch the watchers. So you have like inspector generals, and you have GAO, and you have congressional hearings that are watching the people who are watching. So

at some point you just have to fall back on the checks and balances that exist, and I sort of feel like whoever's in the position, let's see what happens.

Oh, the other thing that I learned coming out of this, is when the Department stopped sharing data with the CFPB I was under the impression the CFPB was doing no oversight on federal student loans; because you just talked about private student loan ombudsman.

Erin Powers: Right.

Justin Draeger: Out of all of this I ended up learning that CFPB is still doing some oversight on federal loans, they're just not getting the data runs that they were getting from the Department; but they're still getting large picture data upon request from the Department of Education on federal student loans. So their jurisdiction isn't completely whittled down to just private student loans, there is a federal student loan component that still exists here.

So, yeah. I think that's just important because I think that gets overlooked quite a bit. The political simplification that we have in our messaging that everybody, the press, Congress, that this role is a little more complex than just private student loans. So, again sort of like the checks and balances across federal agencies.

So those are some of the things. That doesn't encapsulate everything, and some of the things that we talked about that happened this last month we might talk about in future podcasts. But let's, in the interest of time, look at moving forward. What's happening in our fall preview here?

Justin Draeger: Let's start with Congress. Thankfully they are still in recess for another week, so they'll be back so we can sort of catch up and then they'll all be back next Monday. But one of the things that we're expecting them to hit right out of the gate Rachel is the budget, you want to catch us up here?

Rachel Gentry: Yes. So, the beginning of last month, I believe it was the second of August, President Trump signed the two-year $2.7 trillion budget deal that Congress passed, I believe it went through the house on July 25, and then August 1 went through the Senate. So, the president signed that deal into law to increase defense and non-defense discretionary spending by roughly $320 billion over the level that the sequestrations and spending caps would have enacted.

Justin Draeger: So this paring of the non-defense discretionary defense, sort of buys off Republicans and Democrats?

Rachel Gentry: Exactly.

Justin Draeger: So Republicans want defense spending up, Democrats want non-defense discretionary spending up.

Rachel Gentry: Right. Yep.

Justin Draeger: Health and Human Services, Education…

Rachel Gentry: Yeah, everybody kind of got a little bit of the pie. So defense went up about 3% to roughly $740 billion, non-defense, that includes education and all the things you just mentioned went up roughly 4%.

Justin Draeger: And this is a two-year deal?

Rachel Gentry: It's a two-year deal, so its fiscal year is 2020 and 2021, and that would impact for Title IV program award years, 2020/21, and 2021/22.

Justin Draeger: We've got to find a better way to do this.

Rachel Gentry: I know it's a mouthful.

Justin Draeger: Yeah, what are we going to do here? We've got to figure this out. 20/21, 20, 21? Because that sounds like 20/21 award year is ... It sounds like 2021 the year.

Rachel Gentry: Yeah, exactly.

Justin Draeger: Okay, so maybe we should crowd source this. Can you put this in our TikTok?

Erin Powers: Yes. Yes, I'll work on that. We'll do a dance.

Justin Draeger: I don't fully understand TikTok but do that. But I would welcome suggestions from the audience here.

Rachel Gentry: I think I said it right, but I thought I said it wrong, because of how it came off.

Justin Draeger: You said it right, but all I kept hearing was 2021 calendar year over and over again.

Rachel Gentry: Yes.

Justin Draeger: All right, but the nice thing is this gets us through the election.

Rachel Gentry: Right.

Justin Draeger: This creates a bigger pie.


Justin Draeger: So when we divide up the pie we have a bigger pie, which means presumably, we should all get as much, if not more, money in our respective programs.

Rachel Gentry: Right. That is the hope.

Justin Draeger: But now we've got to divide up the pie.

Rachel Gentry: Now we have to divide up the pie. So kind of looking forward to what's moving next. As Congress comes back, we'll be looking for starting that first week, the week of September 9th. So next week I guess, it snuck up on us. We're expecting the Senate to start their appropriations process. Looking back, the House, I believe it was throughout the month of June, passed 10 of their 12 appropriations bills, so they are kind of ahead of the game.

Justin Draeger: Including ours?

Rachel Gentry: Including ours.

Justin Draeger: Great.

Rachel Gentry: We saw some nice increases there that we were really happy with. One thing that we need to be conscious of though, the levels that the House used to mark up their bills were a bit higher than the spending levels that were passed in the eventual Budget Act. So the House is going to need to account for roughly $15 billion less in non-defense spending, which is where the Labor H Bill falls into.

Justin Draeger: So they baked a huge pie that will have to be paired down?


Justin Draeger: We'll have to watch this closely, but Rachel two and a half months on the job.

Rachel Gentry: Yes.

Justin Draeger: Will we have our programs appropriated, do you think, by October 1?

Rachel Gentry: It's not super likely. We have heard that the Labor H Bill will probably be one of the first ones to be marked up in the Senate, so we've been hearing that Chairman Shelby is interested in pairing the defense and the Labor H Bills together as kind of the two first bills that are marked up by the full committee.

Rachel Gentry: That said, just this morning I was reading an article about how appropriators in both chambers are starting to think about kind of stop gap legislation that could be a short-term spending extension to keep the government running should all 12 of these spending bills not get passed by the end of the fiscal year on September 30.

Justin Draeger: Yeah, and leaving aside the unpredictability of the president, who sometimes says that he likes government shutdowns and wants them, we won't have a government shutdown this fall.

Rachel Gentry: That's not what we're hearing.

Justin Draeger: Best case scenario though is that we will have Pell Grant amounts for the 2020/2021 year by late fall or winter, that would be best case scenario.

Rachel Gentry: That's what we're hearing. It sounds like the continuing resolutions, or the kind of short-term spending extension that are being considered would go through maybe late November, early December. We'll see what happens there, but hopefully by early winter, or later fall we'll have something to kind of base off of.

Justin Draeger: Yeah, and this last year for 19/20 we have Pell Grant amounts really early in the year. So, we're hoping this is a trend. I mean that was the first time in 19 years I think we had them by October 1.

Rachel Gentry: Yeah, it was the first in a very long time.

Justin Draeger: So we won't have that probably this year, but we're hoping shortly thereafter, the beginning of the federal fiscal year.

Rachel Gentry: Right. I think there is some hope that maybe Labor H will go through because it will be one of the first ones; but we definitely, I won't say definitely.

Justin Draeger: It only sails if it's attached to defense, right?

Rachel Gentry: Right. That's kind of why it sounds like Chairman Shelby is wanting to pair those two, because they're two of the biggest and putting them together kind of bodes well for their likelihood of actually getting through. So if any of the appropriations bills do pass before the new fiscal year starts on October 1, it will probably be defense and Labor H; but that's not a definite, and wouldn't be surprised if we saw some type of bending extension to maintain current levels.

Justin Draeger: Okay. So, we'll stay tuned, more to come there.

We're also expecting a whole bunch of regulations. We talked about borrowed defense at the top Jill, but can you give us a preview of what we should be expecting next few months?

Jill Desjean: Sure. Yeah. So, we are waiting on a number of items from the 2018-19 Neg Reg sessions. To just remind everybody, consensus was reached in those sessions, so the language that comes out of ED will be the language that was agreed to by the negotiators. There were so many topics this session that they actually split the topics into these, they called them buckets. But the rules are not going to come out in the same buckets necessarily. So, they'll just kind of release them piecemeal as they're ready.

So, we did see one NPRM for public comment come out in June, and that included accreditation, state authorization, for distance education, and student needs, some piece of student need general provisions. So, we're expecting the final rule on those, on accreditation, possibly before 11/1, which would be the latest day, according to the master calendar, that you could release the rules to make them effective next July, July 1 of 2020.

State authorization we don't know when that's going to come, but there will likely be an early implementation provision included there, and we also don't know when the general provisions piece will come out for the student need general provisions. We're also waiting, we haven't seen any requests for public comment yet on the remainder of the topics that were covered during the 18-19 session that included distance education, which we probably won't see until December. Teach grants, which we think are coming soon, along with faith-based entities, we've heard those are going to come together and it was late summer, early fall and here we are.

Justin Draeger: So on time as usual…

Jill Desjean: Yes.

Justin Draeger: On time for the department, we're on department time.

Jill Desjean: Yeah.

Joelle Fredman: Plus, the Department of Education Friday just published its Final Rule for borrower defense. NASFAA is currently working on its analysis, which will hopefully be out later this week, so keep an eye on that. Right after the rule came out, Democrats, higher education stakeholders argued that it actually makes it more difficult for borrowers to receive debt relief but stayed tuned to what we have coming out.

Justin Draeger: Okay, so people be on the lookouts for those. For those wondering about NAFSAAs take, a lot of these are, they're tied into Title IV in that Title IV is the hook. But they're not necessarily ... Like accreditation effects the institution as a whole, and obviously ties in with Title IV eligibility, but might not affect the day to day. It's not as acute as if were negotiating R2T4 here.

Jill Desjean: Exactly. Yeah.

Justin Draeger: So we will be doing deep dives and we'll be pulling out the pertinent elements related to Title IV administration, and then hitting at a higher level some of the other institutional things that folks want to be aware of.

But our normal take is we get these, we kind of go through them, we issue summaries on Today's News, and we'll talk about them on the podcast, and

then if it's something that's very acutely within the financial aid office wheelhouse, we might even do webinars and things like that.

Jill Desjean: Yep.

Justin Draeger: So people can be on the lookout for those regulations.

All right, final thing, which I think is the question a lot of people are wondering about is the Higher Education Act. Will we actually see a reauthorization and it sort of is like our favorite pastime to try to figure out whether we're going to have an HEA reauth. If people remember, if you were placing bets on this, which we don't do. We don't gamble on HEA. Although, I'm sure in Vegas there's somewhere you can do this.

Erin Powers: We'd have lost so much money by now.

Justin Draeger: Yeah. Can you make note? Let's look into that.

Erin Powers: Yeah.

Justin Draeger: So for HEA reauthorization, we've been talking about how odds seem to not be going in its favor, Congress seems to be deadlocked on a lot of issues, the only thing moving through are budget and appropriations really. Even areas where there's agreement can't move forward, like both Dems and Republicans want to do like an infrastructure package, doesn't seem to be going anywhere.

So something as specific as HEA, the only thing we keep coming back to is that for Senator Alexander, who's the chairman of the Senate Health, Education, Labor and Pensions Committee, given that this is his final term in Congress, that he might put his thumb on the scales to really move this forward. Even then it's not a sure thing. But as Rachel and I have been up on the Hill this last month, and talking to lawmakers, it's possible, but it seems like it's going to be a pretty heavy lift to get a reauth done in this calendar year. What's your take Rachel?

Rachel Gentry: Agreed on that. I think when you add in the aspect of Senators Warren and Sanders also being on the HELP Committee and having their own higher education priorities and kind of initiatives and parts of their platform that kind of adds another layer to this. Are they going to be willing to sign on, and support any type of HEA proposal that doesn't include what they're running on?

Justin Draeger: Right. So we've got politics involved, we've just got the reality of a deadlocked Congress, and then right on the heels of all of this is the 2020 election, and it's just really hard to see how major pieces of legislation get done in election year, because neither side wants to hand the other side a major victory leading into an election. That's just normal course.

For people who are holding their breath about a full HEA reauthorization, we'd say don't hold breath. Don't put yourself at risk.

Rachel Gentry: Don't pass out.

Justin Draeger: Right. That's right. But then there's the question of could you get a mini reauth? And Senator Murray on the democratic side has been very clear over and over again publicly about wanting to do a full comprehensive reauth. So her position is it's all or nothing, which I understand as the minority party. On the other hand, if Senator Alexander's major focus is FAFSA simplification and Senator Murray’s major focus is Title IX and sexual assault, if they could come to an agreement on those two things, and both compromise, perhaps you could see a mini reauth, that isn't as large as a full reauth.

I still think the chances of that are quite low, but it's an option where you might have a mini-re-authorization but not a full re-authorization.

Rachel Gentry: Right. Particularly thinking about something after the election happens, right? Kind of right before Senator Alexander retires, maybe sometime in that very short time frame.

Justin Draeger: Like they've done all the work, it's all happened behind the scenes, and then they push something through very quickly.

Rachel Gentry: Yep, the politics are never out of it, but things diffuse a little bit after the election. Maybe then.

Justin Draeger: All right. And for NASFAAs part we're still geared up for reauthorization whenever Congress starts to move on this.

Rachel Gentry: Yes, so we put out our kind of revised, refreshed, and updated HEA priorities, so feel free to check that out.

Justin Draeger: Lest folks forget, all the work is happening now. Staff are still drafting the legislation, underscoring whatever will be reauthorization. So it's not like they're twiddling their thumbs, the drafting work is happening right now. So, now is the time.

So, I want to, maybe for our listeners, this next week maybe we can give them just a little bit of homework. I'm always interested for me, I think I've talked about this before, the new year is always the new academic year for me, that's like my January 1. January 1 is completely meaningless.

July 1 to me is like the beginning, and so that's when I make my resolutions. So I'm interested in productivity hacks, and so for you guys here, next week maybe you can come with your best, most recent productivity hack. For anybody who is

listening, if you want to send them to us, we'll make sure we highlight them on the podcast next week.

This last month we also did an interesting interview with Ked Bradford, who's the assistant superintendent in the Office of Student Opportunities with the state of Louisiana. They implemented a new program that garnered a lot of interest in our membership about as part of their financial aid planning requirements for high school graduation, students must complete a FAFSA, and we had a couple questions for him.

I think we're going to publish that later this week. So people can check out that special episode. It'll be a mini episode here about how that's going in Louisiana, and what some of the early results of their new curriculum, how it's going.

So other than that, remember to subscribe, tell a friend, send us your comments, until next week.

nasfaa off the cuff – episode 116 transcript · jill desjean: spanish. justin draeger: okay. jill...

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