Tag: Delay

  • Education Department seeks delay in landmark borrower defense settlement

    Education Department seeks delay in landmark borrower defense settlement

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    Dive Brief: 

    • The U.S. Department of Education is asking a federal judge for an 18-month extension to decide borrower defense claims from students who were promised decisions by January — or automatic relief if their cases aren’t resolved by then. 
    • The nearly 200,000 borrowers still awaiting decisions are covered by a landmark 2022 settlement that promised automatic debt relief or timely decisions based on when borrowers filed claims and what institutions they attended.
    • The Project on Predatory Student Lending, a nonprofit legal firm representing the borrowers, urged the judge overseeing the case to reject the Education Department’s request for an extension. “It is time for the Department to hold to its commitments and move this Settlement to its final phase,” the group said in a Nov. 21 court filing. 

    Dive Insight: 

    The settlement in the Sweet v. McMahon case stems from a class-action lawsuit filed during the first Trump administration that accused the Education Department of stonewalling decisions on applications for borrower defense to repayment, a federal program that provides debt relief to students defrauded by their colleges. 

    The settlement divided borrowers into three groups. 

    It granted automatic relief to the first group, which was composed of roughly 200,000 borrowers who attended one of the 151 colleges listed by the department. The list was dominated by for-profit institutions, including both large chains that had shuttered and still-operating colleges. 

    The second group was promised timely decisions, or automatic relief if the Education Department didn’t meet certain deadlines. The agency told the court earlier this year it had resolved many of those cases, and will provide another update in December. 

    And the last group — which is now facing a potential delay — is composed of the 207,000 people who filed over 251,000 borrower defense claims after the settlement had been struck but before it received final court approval. 

    The Biden administration’s Education Department promised to make timely decisions on their cases — or else provide automatic relief to them by Jan. 28 of next year. Now, the department under President Donald Trump is requesting to move that deadline back to July 2027. 

    In a Nov. 6 court filing, the agency said it lacked the resources to quickly issue decisions on such a large pool of applications. 

    “The Department has not received the resources that are needed to adjudicate post-class applications — Congress repeatedly ignored requests for funding to increase staffing to the levels the Department deemed necessary to fully implement the settlement,” the agency said, adding that its Federal Student Aid office “has instead seen staffing dwindle at the time when resources for postclass adjudication are most needed.”

    Trump signed an order to close the Education Department to the “maximum extent appropriate and permitted by law” and has asked Congress to reduce its funding.  

    The Education Department has cut its staff roughly in half under Trump and moved to outsource its programs to other federal agencies without first seeking congressional approval — a move some say could be a violation of the law. 

    The department said it is now adjudicating about 1,500 borrower defense applications each month for the final settlement group. As of Oct. 31, it had issued decisions on almost 54,000 of the final group’s applications. 

    It projected that roughly 193,000 borrower defense applications covered by the settlement would still lack decisions by the January deadline. Those borrowers’ outstanding loan balances total $11.8 billion, the Education Department said in court documents. It also said about half of the group’s borrower defense claims have so far been denied. 

    In a statement Wednesday, Under Secretary of Education Nicholas Kent the Trump administration is requesting more time so taxpayers aren’t “burdened with discharges for ineligible borrowers.”

    “Although the Department has complied with the Court’s deadlines in good faith, the upcoming January deadline is unreasonable,” Kent said. “Without adequate time to review each outstanding borrower defense case, taxpayers could be forced to shoulder $6 billion in windfall discharges for ineligible borrowers, based on the Department’s current adjudication patterns.” 

    In response to the Education Department’s request, lawyers for the borrowers slammed the department’s request. 

    “Less than 12 weeks before the deadline, the Department reveals that not only is it behind schedule to meet that deadline, it never had a prayer of meeting the deadline,” they said. “Out of more than 251,000 Post-Class applications, it has adjudicated fewer than 54,000 — barely one-fifth.”

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  • Government Shutdown Could Delay ED Rule Making

    Government Shutdown Could Delay ED Rule Making

    All rule-making sessions for the Department of Education were held online from the start of the COVID pandemic to the beginning of the second Trump administration.

    J. David Ake/Getty Images

    If the government shuts down Wednesday, it’s not clear whether the Department of Education will be able to continue with the meetings it had planned to iron out a batch of regulatory changes this week.

    The advisory rule-making committee began its work Monday and was originally slated to continue through Friday. But at the start of Monday’s meeting, department officials noted that if the government runs out of funding Oct. 1, the remainder of the session would be delayed and the plan would be to resume virtually in two weeks. (This was consistent with a pending notice that was posted to the Federal Register in the morning.) 

    That all changed once again moments before Monday’s meeting ended when Jeffrey Andrade, the deputy assistant secretary for policy, planning and innovation, said the department was reconsidering its earlier statement and that the negotiated rule-making committee might be able to continue operating in person through the end of the week.

    “There is a possibility that we can work through this,” Andrade said, adding that he had just received word of the possibility himself. 

    The department is planning to furlough nearly 87 percent of its employees, according to its shutdown contingency plan. But officials are planning to keep employees who are working on the rule-making process on board as well as those working to implement Congress’s One Big Beautiful Bill Act, which passed in July.

    This rule-making session is focused on clarifying the details of new graduate loan caps and a consolidated version of the multiple existing income-driven repayment plans.

    Going into this week’s meetings, multiple higher education experts said that finalizing new regulations before the caps and repayment plans take effect July 1, 2026, would be difficult no matter what. A government shutdown, one added, could throw a wrench into the already tight timeline.

    “With such a crunched timeline for finishing the rules in the first place, this makes the department’s job much more challenging,” said Clare McCann, managing director of policy for the Postsecondary Education and Economics Research Center at American University. 

    One of this week’s rule-making committee members, who spoke with Inside Higher Ed on the condition of anonymity, said that while they were still uncertain how the rest of the week will play out, Andrade’s last-minute announcement gave them hope.

    “I’m not sure what to make of it and will be waiting for clearer answers in the morning,” the committee member said. “But I know the department is working hard to get as much done as possible.”  

    That said, if the session does end up moving online, it wouldn’t be too out of the ordinary for department staff members. All sessions prior to the start of the second Trump administration were held online since the COVID-19 pandemic broke out in 2020.

    The real challenge, McCann noted, would likely be having enough staff to facilitate the session, regardless of its modality. 

    “Certainly the department will be able to keep some of this moving, but they will undoubtedly also have some employees who are not considered essential and are furloughed during a shutdown,” McCann said. “It takes many people at the department to make a rule making happen, and so any loss of personnel is going to present a challenge, even if they’re able to keep some of the core team that’s involved.”

    Under the contingency plan, student aid distributions will not be paused and loan payments will still be due. The department will, however, pause civil rights investigations and cease grant-making activities, though current grantees will still be able to access funds awarded by Sept. 30.

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  • Union seeks delay in Education Department layoffs

    Union seeks delay in Education Department layoffs

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    U.S. Department of Education employees caught in the Trump administration’s reduction in force say they are being terminated against the terms of their bargaining agreement. The union representing them, American Federation of Government Employees Local 252, is seeking to delay the department’s termination date as a result. 

    It filed a grievance against the department on Wednesday, claiming the new Aug. 1 termination date only gives employees two weeks rather than the required 60-day notice. The department put in place the new termination date after a recent U.S. Supreme Court decision greenlighting the layoffs.

    On July 14, the Supreme Court allowed the department to move forward with a mass termination of over 1,000 employees originally announced in March. The department, in turn, notified employees that their new separation date was Aug. 1 rather than the previously announced date of June 9 — which got delayed due to the legal challenges. 

    The union claims, however, that the department must re-start its RIF process — which requires longer notice than two weeks and a briefing — since it walked back its March RIF due to blocks from the lower courts.

    During that time, the department sent RIF’d employees multiple emails over the course of a few months saying they were planning for the employees’ reentry into the office, the AFGE Local 252 grievance document says. “We are actively assessing how to reintegrate you back to the office in the most seamless way possible,” a June 6 email from the department told employees on administrative leave. 

    The Education Department, however, says its termination date set two weeks after the Supreme Court’s decision complies with the 60-day notice period required within the collective bargaining agreement. 

    “The CBA does not specify that the agency must provide 60 consecutive days’ notice,” said Madi Biedermann, deputy assistant secretary for communications, in an email to K-12 Dive. “ED is now providing affected employees with, in total, more than 60 days’ notice.” 

    The union’s grievance is the latest wrinkle in the Trump administration’s efforts to wind down the department, which have been met with resistance and criticism from former department employees, lawmakers and some public education advocates concerned about the agency’s effectiveness with only half of its staff remaining. 

    While these wrinkles unfold, the department has been spending $7 million in taxpayer dollars per month to pay workers on leave.

    That dollar amount is only for 833 of the 962 laid-off Education Department workers that the union represents and whom it was able to reach for its analysis. Thus, much more than $7 million is actually being spent per month to keep the more than 1,300 laid-off employees on payroll.

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