November 3 AM Final

DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

AFFORDABILITY AND STUDENT LOANS COMMITTEE

SESSION 2, DAY 3, MORNING

November 3,

2021

Committee Meetings - 11/03/21

On the 3rd day of November, 2021

, the

following meeting was held virtually, from 10:00 a.m.

to 12:00 p.m., before Jamie Young,

Shorthand Reporter

in the state of New Jersey.

Committee Meetings - 11/03/21

P R O C E E D I N G S

MR. TOTONCHI: Good morning and welcome

to day three of the second session of the Affordability

and Student Loans Committee Negotiated Rulemaking

Process. My name is Emil Totonchi and I'll be

facilitating this morning. Before we dive into

substantive discussion, I just want to take a roll call

of everyone that's here. I will start with Heather

Perfetti and Michale McComis, who are primary and

alternates for accrediting agencies.

DR. PERFETTI: Good morning, everyone.

Heather Perfetti here.

MR. MCCOMIS: Good morning, Michale

McComis.

MR. TOTONCHI: Next, I'd like to

welcome Dixie Samaniego and Greg Norwood, who are the

primary and alternate negotiators for dependent students.

MS. SAMANIEGO: Good morning, everyone.

MR. NORWOOD: Good morning, Greg

Norwood.

MR. TOTONCHI: I would like to welcome

Rajeev Darolia, who is an adviser for economic and/or

higher education policy analysis and higher education

data.

MR. DAROLIA: Morning.

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MR. TOTONCHI: I'd like to welcome Jaye

O'Connell and Will Shaffner, who are the primary and

alternate negotiators for federal family education loan

lenders and/or guarantee agencies.

MS. O'CONNELL: Morning, Jaye

O'Connell.

MR. TOTONCHI: Is Will Shaffner

present?

MR. SHAFFNER: I'm having a

conversation by myself, sorry, I'm on mute. Hi, everyone,

I need more coffee.

MR. TOTONCHI: Fair enough. Welcome.

Alyssa Dobson and Daniel Barkowitz, the alternate of the

and I apologize, I reversed those, the alternate and

primary for financial aid administrators and

postsecondary institutions.

MR. BARKOWITZ: Morning, everyone,

Daniel Barkowitz here.

MS. DOBSON: Good morning, Alyssa

Dobson.

MR. TOTONCHI: Marjorie Dorime-Williams

and Rachelle Feldman, the primary and alternate

negotiators for four-year public institutions of higher

education.

DR. DORIME-WILLIAMS: Good morning,

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everyone, Dr. Dorime-Williams here.

MR. TOTONCHI: Rachelle Feldman

present? Okay. Michaela Martin and Stanley Andrisse, the

primary and alternate negotiators for independent

students.

MS. MARTIN: Morning.

DR. ANDRISSE: Good morning, everyone.

Pleasure to be here with you.

MR. TOTONCHI: Bethany Lilly and John

Whitelaw, primary and alternate negotiators for

individuals with disabilities or groups representing

them.

MS. LILLY: Morning, everybody.

MR. WHITELAW: Good morning, all.

MR. TOTONCHI: Persis Yu and Joshua

Rovenger, primary and alternate negotiators for legal

assistance organizations that represent students and/or

borrowers.

MS. YU: Good morning, everyone.

MR. ROVENGER: Morning, everyone.

MR. TOTONCHI: Noelia Gonzalez,

alternate for minority serving institutions.

MS. GONZALEZ: Morning, everybody.

MR. TOTONCHI: Misty Sabouneh and

Terrence McTier, primary and alternate negotiators for

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private nonprofit institutions of higher education.

MS. SABOUNEH: Good morning.

DR. MCTIER: Morning, Dr. McTier here.

MR. TOTONCHI: Jessica Barry and Carol

Colvin, primary and alternate negotiators for proprietary

institutions.

MS. BARRY: Good morning, everyone.

Jessica Barry here.

MS. COLVIN: Good morning.

MR. TOTONCHI: Heather Jarvis, adviser

on qualifying employers on the public on the topic of

Public Service Loan Forgiveness.

MS. JARVIS: Good morning, Emil. Good

morning, everyone.

MR. TOTONCHI: Good morning. Joseph

Sanders and Eric Apar, primary and alternate negotiators

for State Attorneys General.

MR. SANDERS: Morning, everyone.

MR. APAR: Morning, everyone.

MR. TOTONCHI: David Tandberg and

Suzanne Martindale, primary alternate negotiators for

state higher education executive officers, state

authorizing agencies and/or state regulators of

institutions of higher education and/or and/or loan

servicers.

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MR. TANDBERG: Good morning, everyone.

MS. MARTINDALE: Morning.

MR. TOTONCHI: Jeri O'Bryan-Losee and

Jen Cardenas, and I'm being deliberate about Jen, primary

and alternate negotiators for student loan borrowers.

MS. O'BRYAN-LOSEE: Good morning,

everyone.

MS. CARDENAS: Buenos dias, good

morning, everyone.

MR. TOTONCHI: Bobby Ayala and

Christina Tangalakis, two-year public inst primary

alternate negotiators for two-year public institutions of

higher education.

MR. AYALA: Good morning, everyone.

MS. TANGALAKIS: Morning.

MR. TOTONCHI: Justin Hauschild and

Emily DeVito, primary and alternate negotiators for U.S.

military service members, veterans or groups representing

them.

MR. HAUSCHILD: Morning.

MS. DEVITO: Good morning.

MR. TOTONCHI: And also, Jennifer Hong

of the Department of Education.

MS. HONG: Good morning, welcome back.

MR. TOTONCHI: And who is present here

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for the Department of Education, Office of General

Counsel this morning?

MR. DAVIS: Good morning, everyone.

Todd Davis back again. Thank you.

MR. TOTONCHI: Excellent. Did I miss

anyone? Excellent. Okay, well, let's get rolling with the

program today. Before we jump into Borrower Defense,

which is our next big topic to discuss, I understand

Jennifer from the Department has a few general remarks.

MS. HONG: Morning everybody just

wanted to flag, today is Wednesday. We're midway through

session two of the negotiations. We have a lot on our

agenda, as you all know and a lot to discuss. We really

appreciate the discussions thus far. It sounds like, just

to review, I want to backtrack because I'm growing a

little bit concerned about where we are on different

issues. Sounds like interest capitalization is the one

issue where we are all in consensus under the current

proposal. So I'm pleased about that. We're pleased about

that. I realize, Jaye is still interested in the FFEL

language if we're being able to vote on the discharge

issues, however, I felt like TPD was an encouraging

discussion. We're going to go back and we're going to

review for the end of the week again because I think it

bears repeating what the sticking points are for some of

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these issues. And as I mentioned before, you know, going

back on the five years with TPD, we're taking that under

consideration. I believe that was the main issue for

total permanent disability discharge. So I think that is

in a good place as well. With regard to closed school,

I'm a little concerned about where some of the committee

is with regard to reenrollment and then the institutional

representatives in terms of the definition.

MS. HONG: I don't know if that's

something that we can carve out some time for you all to

discuss and find a meeting place. We are we are bound by

the master calendar, the master calendar stipulated in

the Higher Education Act that we that we've got to

publish any, you know, the outcome of these rules if we

reach consensus by November 1st, the following year. So I

just want to remind people that this is our goal here is

consensus. We want to have everybody on board. We're here

in good faith. But if we don't reach consensus, then the

Department will publish, you know, whatever rule or

policy direction that we see fit. So we just we really

want to remind folks about the goal of consensus. It is

Wednesday in session two, so as much as we can remedy

kind of sticking points, articulate those sticking points

so that we can be clear on where we are with these

things, I think that would be very fruitful going

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forward. And I thank you all for your continued

commitment to this process.

MR. TOTONCHI: (Inaudible) hands before

doing so, I'd like to recognize that Josh is present for

legal aid and that Greg is present for dependent

students. If there were any other folks who don't intend

to be at the main table right now that still have their

cameras on, please turn off your cameras at this time.

Alright, thank you, David.

MR. TANDBERG: Appreciate those points

by Jennifer. We are working under a, you know, fewer

hours than typically are operated under with a negotiated

rulemaking. And the last negotiated rulemaking that I

was, I participated in, which was the last one before

this one, we actually added an hour per day and actually

added days in order to reach consensus. And so I, none of

us want to spend any more time on Zoom than we have to,

but it may necessitate us going to perhaps 5:00 Eastern

Time if that worked for folks. I know that people out

east may have obligations to pick up kids, et cetera, but

I wonder about adding start going to five moving forward

or perhaps even adding a day or two, or keep open the

option of adding a day or two on on the back end if we

reach that point. But it sure does seem like we have

short days, even though they also feel long at the same

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time. But we have five hours each day, which actually for

a negotiated rulemaking is not much time. So just wanted

to put that on the table of going until five each day

Eastern Time.

MR. TOTONCHI: Daniel?

MR. BARKOWITZ: Thank you. In response

to Jennifer, and again, thank you, and I appreciate the

fair and accurate representation of the desire to move to

consensus. It would be helpful. I had asked yesterday if

Raj could present some data on closed schools. And I

wonder if we have or can make time today if Raj is ready

with those data. Again, I think that would be helpful to

give us the context. So we have a sense of how big of an

issue this is and and where this takes place. Because

again, my sense is this is a much larger issue than I

think we understand.

MR. TOTONCHI: I understand that Raj

will have something to share at some point today, most

likely the afternoon. Bethany.

MS. LILLY: Jessica was actually ahead

of me, I'm not sure why she bumped over.

MR. TOTONCHI: I don't know why,

either. Jessica, please proceed and thank you, Bethany,

for for that.

MS. MACK: Really quickly. Sorry,

Committee Meetings - 11/03/21

Jessica, if you put your hand up and then take it down

and then put it back up, it will move you to the end of

the line. So I just want you to know that folks move

themselves when their hands go up and down. So we'll

continue to call on the first person. So if you do

inadvertently lower your hand, please put it right back

up and we'll get to you in that sequence list.

MS. BARRY: Yeah, which is exactly what

I did. So thank you and thank you, Bethany. Jennifer, I

just wanted to ask. I know there was a lot of support for

the proposal that we put forth on closed school

discharge, but I know you said the Department had some

concerns with it. Is there any way we could get feedback,

even like a red line document with feedback on it? I

think that would help us come to consensus.

MS. HONG: You know, that's why I tried

to address it as succinctly as I could. Unfortunately,

and you got you all know that you submitted more

proposals yesterday that we appreciate. I urge you to do

so, and getting the proposed language allows us to review

that more expeditiously. We can't provide written

feedback to you guys on every single proposal. We can

discuss them here at the table. And just in general in

the definition, we appreciate that discussion and what

you're trying to address in terms of mergers and and

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those issues, but in general in general. You know, the

idea here and the policy direction from the Department is

to just has to cast a net to capture students and address

the proprietary, I'm sorry, the predatory actions of some

of the institutions with regard to closed school

discharge. And we have that being said, to the extent

possible, we've tried to address in the proposed language

through comments verbally, through quick emails, you

know, any issues that you have with your proposals, but

we can't do a red line back to each and every proposal.

We just don't have that bandwidth.

MS. BARRY: Can I just comment on that

real quick? I totally understand that. I just think there

are some situations that we presented that are not coming

from a predatory place that I think we're where

discharges are being applied, that is just not the

Department's intent. So I hope when we're talking about

closed school discharge next time and maybe if we see

this data to that Daniel's talking about, maybe we can

continue that conversation just a little bit further.

MS. HONG: Nor nor was I suggesting I

was suggesting that we were trying to address the

predatory practices for the additions that we made after

session one.

MR. TOTONCHI: A few more hands up, you

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know, we'll welcome those comments, obviously, we want to

get into Borrower Defense. But go ahead, Bethany.

MS. LILLY: I'll be very brief. I just

I appreciate the Department's very clear focus on getting

us to consensus, but I also want to just acknowledge that

I think there are going to be things we're not going to

reach consensus on. I think there are just large gaps

between perspectives, and so I appreciate the reminder

that that is our goal and that is something that we have

agreed to in in the protocols, but that I think sometimes

we just end up at that point where we're not going to be

able to get there. And I I want to acknowledge that as

part of this discussion, because I don't think that's a

bad thing. I think people are just going to have

different perspectives.

MS. HONG: If I if I could just quickly

respond to that. Thank you, Bethany, and we realize that

that's always a possibility. I would just ask you to

think and contemplate whether the current regulations, as

written, is something that you would prefer than in the

alternative, because that is the alternative, as are the

current regulations, we're trying to improve upon them.

So that is really the the issue that I wish I would like

for you to consider when you look through these

regulations, whether they are an improvement and whether

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you can kind of move the thumb toward the middle or

whether you prefer the current regs as written, so that

that's the standard that we're looking at right now.

MR. TOTONCHI: Josh.

MR. ROVENGER: I just initially was

just coming on here to voice support for adding time if

needed, because I do think the discussions have been

fruitful. But I do also want to respond to two points

that have just been made. One, I actually respectfully

disagree with the Department's framing of what we're

doing here. The Undersecretary and Secretary and

President have made very clear commitments to borrowers,

and so I don't think it's I don't think the question

we're faced here is current regulations, many of which

were entirely decimated by the prior administration and

what the Department has put forward. I think the question

we need to be asking when we're evaluating these

regulations is do these meet the commitments that the

Secretary and the President and the Undersecretary have

made to borrowers and students? And I think that's where

a lot of the pushback that's coming towards the

Department's positions is anchored. I also just want to

address Jessica's comment and that proposal. Just to

clarify the record-

MR. TOTONCHI: Excuse me, one second,

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Josh. Someone has unmuted themselves and we can hear

them, which means we can't hear you clearly. Can everyone

ensure that they are muted if they're not currently

speaking? Thank you. Josh, proceed.

MR. ROVENGER: Sure. So while those

specific proposals may not be coming from a predatory

place, I think I think from the legal aid constituency

they’re, as written, a nonstarter. And so I don't think

they had a significant consensus, as was alluded to.

MR. TOTONCHI: I see a few more hands

up. Daniel.

MR. BARKOWITZ: Thank you. I want to

just circle back to something that Dixie, I believe it

was Dixie had said yesterday or asked yesterday about the

question of again going back to school, the question of

liability. In re-reviewing the document last night, I

didn't see anything in the closed school discharge

section about institutional liability. Dixie had asked

the question about whether this was borne out of a

concern for institutional liability, and it is in part

for me. Again, if a campus of an institution shuts down,

which I think we're going to find happens often, not the

entire institution, the question of liability becomes

germane. So I don't know, Jennifer, if there's any

ability to provide any context on that or if I'm just

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missing this. It doesn't appear in the regulatory

proposal that was provided by the Department, so I'm not

sure if it's in a different subsection or if there's a

different place where institutional liability is

mentioned as part of closed school discharge. So that

would be an open question for me.

MR. TOTONCHI: If you can note that in

the chat, that would be great, Daniel. Justin.

MR. HAUSCHILD: Yeah, I just I also

understand what the Department is getting at here in

terms of timeline and improvement in the regulations. But

I also have to disagree with the framing that in a an

improvement on currently deficient regulations is somehow

adequate or sufficient. I mean, I think if we're going

to, it's not. It's not the appropriate framing to be

looking at deficient regulations and saying that simply

approving them is good enough. Just improving bad

regulations isn't enough, and we should be looking to see

how we can make them as sufficient as possible. Ok.

That's it. Thanks.

MR. TOTONCHI: Yeah. All I ask as

facilitators, you know, this means you're there and you

like it [indicates thumbs up]. Here is you can live with

it [indicates sideways thumb]. Just make sure that this

accurately matches where you're at. If that if that's

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fair. Okay? David.

MR. TANDBERG: Yeah, I'd just like to

call the question on adding an hour to each of our days

if we could discuss it or just skip straight straight to

a vote.

MR. TOTONCHI: Oh, I. Jennifer, go

ahead.

MS. HONG: Yeah, I just want to jump in

here and thank you, David, for the suggestion. All of,

please note that my comments are in the context that

we're doing this for the first time virtually. I think

it's gone very well. We extended it to, you know,

rulemaking is usually three days when we do it live. We

extended it to five days purposefully and made the days a

little bit shorter because there's a real Zoom fatigue or

virtual meeting fatigue that's very real and I think the

facilitators have had a lot of experience with this. So

it becomes, strenuous hours together, I think becomes

counterproductive at some point. But more than that, we

have real limitations in terms of our technology and our

commitments in terms of the people that are making this

possible. So we would not be able to add time and I don't

want to belabor this discussion anymore. My my point was

simply, you know, great job, guys, thank you, and we just

a reminder let's let's remember what the end goal is here

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and that we are we we is we are dealing with a limited

time frame that's the whole pressure of negotiated

rulemaking, whether it's live, whether it's virtual. So

to the extent that we can caucus or do whatever we need

to do to kind of build some bridges on these sticking

points before the end of the week, that would be really

great.

MR. TOTONCHI: Jessica, and then I'm

going to call on myself.

MS. BARRY: This will be quick, just to

Josh's comment, I don't want to over-represent the

support for that proposal. I just got excited about some

support, so I just wanted to say that.

MR. TOTONCHI: Folks, thanks so much

for the comments. I'm sure you can see us in terms of the

facilitators and what we're trying to help the parties

accomplish is really zeroing in on where those gaps are.

Anything you can do to help us with that is appreciated

in your comments. Again, solution-oriented comments, you

know, specific changes are ideal at this stage. So with

that, keeping that mindset in our minds, if we could move

to Borrower Defense. And with that, Jennifer, I'll ask

you to tee that up for us.

MS. HONG: Okay, thank you, Emil. I

believe Vanessa's on if she could queue again, just

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there's three Borrower Defense to repayment documents.

The one has a proposed language, the lengthy one has a

proposed language for our proposal. There is a cross

reference to another set of regulations under our General

Provisions section that has to do with an existing

definition of misrepresentation that we will be cross

referencing. But first, we will begin with the with the

proposed language on Borrower Defense to repayment.

Yesterday, I went through the general title so you can

see from the titles the different processes that we're

proposing and we'll go through each each one of them. So.

Alright, this is the applicability, we we started getting

into that, I believe Josh put some language forward to

ensure that we're clear in terms of the new sub part

being applicable to all loans pending before the

Secretary, as well as applications received on or after

July 1st, 2023 is when we're aiming to effectuate these

regulations so we can just start in on page four. That is

where we left off. The black, all this is new proposed

language again and and definition. So we have definitions

under the general sub-part. We did flag some areas where

we've had some questions. If we pull stuff in from 2016,

the first one that you will see on the middle of page

four, subparagraph five is the term for provision of

educational services. And I'll just read the definition

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aloud aloud, it means the educational resources provided

by the institution that are required by an accrediting

agency or state licensing or authorizing agency for the

completion of the student's educational program. And so

we just wanted to tee that up to you guys from 2016. Are

there any comments on that? And I see Joe's hand up.

MR. TOTONCHI: Joe, please proceed.

MR. SANDERS: Thanks, Jennifer. I'm

going back to look at this. On the document that's

Borrower Defense proposal. Sorry. I don't know what it's

called the first Borrower Defense document, which just

has language that I sent you guys. And the violation of

State Law section, it talks about the provision of

educational services. So I can hold these comments until

we get to that State Law section. But in caucusing with

my constituency, I did have people raise some concerns

about the scope of provision of educational services as

it relates to a State Law claim of Borrower Defense to

repayment. Very brief overview, the concern was that

there have been some very high profile cases of sexual

harassment and sexual abuse of students at play. For

example, the sports program cases like Michigan State or

Penn State football and gymnastics programs. And so my

constituency raised the concern, does provision of

educational services cover things such as participating

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in a sports program or using the pool at the campus gym.

Situations where students could come to sexual harm and

then not feel safe at the school and so have to withdraw,

so that may that, I think applies to this definition and

something that we just ask the Department to consider.

MS. HONG: Thank you for that, Joe, and

we'll unless are there any other comments on the

definition, we can proceed and we're going to be pulling

down your document shortly to discuss the other

components of what constitutes the claim under the

proposed federal standard. Okay, so moving along on page

four. Okay, under the General Definitions, school and

institution can be used and interchangeably, that's

existing language. Okay, so so paragraph B is a federal

standard for Borrower Defense applications. Again, we've

repeated here that it's not based on disbursement, but

receipt on or after July 1st, 2023 or applications

pending before the Secretary. This also includes a Direct

Loan or other federal student loan that could be

consolidated into a federal direct consolidation loan may

assert a defense to repayment under this subpart. And

we've identified five bases for a claim;

misrepresentation, omission of fact, breach of contract,

aggressive, deceptive recruitment tactics, judgment

against a school or, the Department's adverse action

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against the school. So moving on to page five, we are

going to pull up the misrep documentation just a moment,

but before we do that, while we're on the discussion

about educational services, there is a comment under

paragraph three on page five, which comes again from 2016

and whether this should be tied to the provision of

education services or not. And that is the institution

that the borrower received the direct loan or other

federal student loan that could be consolidated into the

Federal Direct Consolidation Loan Program to attend

failed to perform its obligations under the terms of a

contract with a student. So we'll tee that up for you to

kind of chew on. In the meantime, I would like to use

this time to kind of get into the misrepresentation

discussion and if we could queue that document now.

Vanessa, that is subpart F of proposed language. So what

we were proposing under misrep, you see from the bottom

of page four to page five in the main text, it makes a

cross reference to made a misrepresentation as defined in

34 CFR part 668 subpart F in connection with the

Borrower's decision to attend or to continue attending

the institution. And this is subpart F existing language,

and you'll see the red lines are additions that we would

like to make. So if we scroll down here. Yeah, if you

could just scroll down to the first red line here, this

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is this is the definition of misrep. We are also

including here omissions of fact as defined under section

668.75. We've added some language under 668.72 regarding

the nature of education program or institution and adding

the clause, “which may be included in the institution's

marketing materials, website, or communications to

students,” any misrep pertaining to those issues. Again,

the black text is existing language.(b)(1), the general

or specific transferability of coursescourse credits.

clarified that language. Under 2, acceptance of credits

earned through prior work at another institution toward

the educational program at the institution. We can keep

scrolling down. Size, location, facilities or

institutionally provided equipment, books or supplies.

Down. Yeah, and then there's a deletion there, and I

think it's because we captured that elsewhere. And then

the second deletion we've captured below some re-

numbering on the headings and then a new (m) (n) (o)and

again, some of these are additions from above. But let me

just read those aloud to summarize. “Actual institutional

selectivity rates, rankings, or student mission profiles

if they're materially different from those included in

institution’s marketing materials,” and a representation

regarding tax status of the institutionthat's different

from the tax status as determined by the Secretary for

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purposes of administering Title IV HEA programs. (o),

specialized programmatic or institution certifications

accreditation approvals that were not actually obtained

or that the institution fails to remove from marketing

materials, websites, or other communication. (p),

assistance that will be provided in securing required

externship or the existence of contracts for specific

externship sites. And again, that is a new element that

we would like to seek additional feedback on. Let's

scroll down. I see your hand, Josh. Let me just get

through this piece. Disclosures under those rules that

are cross-referenced. And then, well, let's let's pause

there because I see Josh's hand up, so it's a lot, and

David.

MR. TOTONCHI: Josh, you're on mute.

MR. ROVENGER: Yep, there we go.

Thanks. So I'll just start off by saying, I think there's

a lot of good stuff in here that the Department has put

forward, and we're generally supportive of these changes

to the misrepresentation section in 668. My question,

though, actually relates to subsection B in 685.401. And

I'm I'm interested in hearing from the Department,

whether it's a policy choice or whether the Department

feels that there's a legal requirement for it to limit

individuals who have a balance due to apply for Borrower

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Defense at any time. I don't know, Jennifer, if you can

answer that for me.

MS. HONG: Well, this is the Borrower

Defense regulations are with regard to discharges of

loans, right, so if there's no loans outstanding, there's

no claim to be brought.

MR. ROVENGER: But isn't one of the,

one of the remedies that the Department can offer a

refund of monies paid? And if that's the case, is it a

borrower who has paid off all of their loans but was

defrauded, entitled to that money back under the Borrower

Defense regulations? And so I guess that's where I

struggle. I don't know if it's a policy choice then I

would urge the Department to reconsider that choice

because those borrowers would have a valid Borrower

Defense claim and be entitled to their money back. If

it's a legal restriction, I would be interested in

hearing what the restriction is.

MS. HONG: Thanks, Josh, I can take

that back.

MR. TOTONCHI: I see Todd has come off

mute. Todd, do you have a response?

MR. DAVIS: Yeah, Josh, I feel like we

may have to circle back as far as fleshing this out a

little more, but I think it's safe to say we have taken

Committee Meetings - 11/03/21

the position and that it is a legal restriction and that

this references outstanding money owed and you have to

have, you know, a dollar and announce this specifically

relates to loans and but you have to have some kind of

outstanding direct loan balance. That's been consistent

with our position about in pastimes consolidating FFEL

into a Direct Loan program so that we can get this

section of regulation, but if you'd like us to flesh that

out a little more, I understand, and we can circle back

on that.

MR. ROVENGER: That would be good,

yeah.

MR. DAVIS: That was a legal position,

not a policy choice in terms of the Department's current

policy team.

MR. ROVENGER: I understand. Yeah, that

would be great if the Department could flesh that out a

little bit. Thank you.

MR. TOTONCHI: David.

MR. TANDBERG: Within the existing text

or the red lines when we're discussing misrepresentation

is job placement rates included among the items that

could be that considered misrepresentation. I didn't see

it, so I'm thinking not, but that can be a more

significant factor than some of the other admissions

Committee Meetings - 11/03/21

factors that are included in the list. I guess I'm saying

if it's not included, I would like to see job placement

rates included among the items around the

misrepresentation.

MR. TOTONCHI: Thank you, David. Joe?

MR. SANDERS: This is kind of a

baseline question, but are the enumerated

misrepresentations the only misrepresentations that can

be considered or is or is this a non-exhaustive list? So

if we're looking at 668.72, it's got all the, you know,

this kind of gets at David's comment, right? Do we have

to list job placement rates for that to be considered a

misrep?

MS. HONG: No, but to David's, David's

point, we're going to get to it on page five there. We

have captured job placement rates there, but it is not

meant to be. It's, what does it say? It says not limited,

Okay, which may, may be included. The point is it's not

exhaustive. These are just examples that we're providing

here.

MR. SANDERS: Okay. Okay, thank you.

MR. TOTONCHI: Justin.

MR. HAUSCHILD: Yeah, and I think maybe

I'll just limit my comments recognizing that this is a

non-exhaustive list, we'd like to see a few other things

Committee Meetings - 11/03/21

included, particularly when it comes to nontraditional

credits earned and representations made by institutions

in that regard, or accommodations available to folks with

physical or mental health issues. But we'll just make

some suggestions, understanding that this is

nonexhaustive and just provide a general support for

what's going on in this area. Thank you.

MR. TOTONCHI: Yeah, please place those

suggestions in the chat. Jessica.

MS. BARRY: Thank you. I'm not sure if

this is the right time to ask this question or not, but

so I see that there's a definition of substantial

representation and that that the student had to rely upon

the misrepresentation or be harmed by it. Is that the

basis of the Borrower Defense of the approved Borrower

Defense claim is substantial or is it just

misrepresentation? Because I think when you remove

substantial, then you can get kind of back into that

mistake standard of an inadvertent mistake, and I'm just

not clear about it. So maybe someone can help you with

that.

MS. HONG: Thank you, Jessica. The the

cross reference here is to cross-reference the

misrepresentation definition generally.

MR. TOTONCHI: Joe.

Committee Meetings - 11/03/21

MR. SANDERS: Yeah, so to go to, to get

back to Jessica's question is, is reliance required here?

MS. HONG: So no, because we're not

relying on the substantial misrep definition, just

misrepresentation.

MR. SANDERS: Okay. If for the record,

you know, reliance is not an element of Illinois’s

Consumer Fraud Act, I think Massachusetts and other

states have the same standards, so we don't think

reliance needs to be in there. It wouldn't be required

under State Law claim. We don't think it should be

required here either.

MS. HONG: That is helpful, thank you.

I can go ahead and proceed to 668.73 on page four.

Unless, I see Heather's hand up, if you want to, if you

had a comment on what we just talked about, Heather.

DR. PERFETTI: Thank you, Jennifer, it

was really relating to the provision on tax status, I

think I understand what you're trying to convey. I just

wondered if there was some clarity that could be offered

there and certainly happy to post it in the chat. But I

think that IRS tax status is trying to be distinguished

from the Department status that it uses for Title IV

access, is that right?

MS. HONG: That's exactly right. You

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know that we review changes of ownership and it's a

different type of review, nature of review that IRS does.

So the standard here is representing your tax status as

understood by the Department.

MR. TOTONCHI: Shall we proceed with

the shared screen?

MS. HONG: Great, thank you so. Some

additions to page four. Major financial charges or

financial assistance on date, we've added some language

regarding to pay the cost of attendance at the

institution to include part-time employment, housing,

transportation assistance. There's a new (g), the amount,

method or timing of payment of tuition and fees that the

student would be charged for the program. And this is

relevant to what was just raised regarding placement

rates. Employability of graduates is the next section

under 668.74. There's a comment on the bottom of page

four regarding the incorporation of that element, which

is actual licensure passage rates if they are materially

lower than those included in the institution's marketing

materials, website, or other communications made to the

student. And then this is followed up by all the text on

page five. We're really interested in getting your input

on these, whether this language will address known

examples of job placement rate manipulation and how it

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will interact with existing rules for placement rates

that accreditors in our states may use. Certainly

interested in hearing from State AGs and Heather as well.

If I could just go over some of these. I think it bears

reading aloud. “Actual employment rates if they are

materially lower than those included in the institution's

marketing materials, website communications”. “Actual

rates are calculated in a manner that is inconsistent

with a calculation formula established by an accreditor,

licensed body or the institution” or “actual rates that

the institution does not disclose are inflated by means

such as”, and you see some A through D examples there.

Whether that's “including individuals in an employment

rate calculation who are not bona fide employees, such as

those individuals placed on a one-day job fair, an

internship, externship or employment subsidized by the

institution.” (B), “Including students in employment rate

calculation who are employed in the field prior to

graduation. (C), “Excluding students from an employment

rate calculation due to the difficulty of placing that

student” or (D), ”Excluding nonrespondents to a survey

for calculating an employment rate.” And we ask that the

institution furnish these documentation and other

information used to calculate the institution's

employment rate calculations. We can either we can sit on

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this if you want to stew on it, I see hands raised so I'm

going to go on mute.

MR. TOTONCHI: I was on mute too.

Misty.

MS. SABOUNEH: Thanks. I think at least

from my perspective and scenarios, I think that this

touches on, I mean going through you can actually

remember instances where all of these things happened.

And so I think it's really important to include this for

the intent but the thing I want to bring up, and I don't

know that it's necessarily regulatory changes. Maybe it's

a Dear Colleague Letter that comes out after. The idea is

we want schools to disclose this kind of information, but

it's kind of difficult so like unemployment rates,

there's not really a standard that schools can measure

apples to apples. So if there was some kind of definition

on how you should measure your employment rates, I think

that would help for students who are comparing. And then

on (B), including students employment rate calculations

that were employed in the field prior to graduation. I

think this is important and we need to measure this. But

from a school's perspective, I don't know how you would

do that. Would we survey students before graduation and

track that? So it's more just in the technicality of how

schools could actually go about doing this in a

Committee Meetings - 11/03/21

consistent way.

MR. TOTONCHI: Joe.

MR. SANDERS: Thanks. I'll be brief

here. There's a lot that could be said, but I think the

two points I want to make, one, this section upon

request, the institution must furnish the Secretary

documentation and other information used to calculate

employment rate calculations. That's really important

because it's hard to capture all the different ways that

a job placement rate could be manipulated or calculated,

and so providing the backup information is really

important. The Department did that in their DeVry

investigation and I think that requiring that in that

instance led to a really good outcome. Second point I

would make is is, you know, the best resource from the

state attorney general's side that we have in terms of

what to look at for job placement rates is probably the

multistate consent judgment with Education Management

Corporation. There were significant allegations of job

placement rate manipulation in that case, and we

negotiated a set of terms with the operator of the

schools that the Department could look at in terms of,

you know, an evidence-based investigation of these

issues, and I'm searching for a link right now, and I'll

throw that, a link to that consent judgment in the chat.

Committee Meetings - 11/03/21

MR. TOTONCHI: Thank you, Joe. Daniel.

MR. BARKOWITZ: Thanks, Emil. So I have

two thoughts. The first is just a language question. And

I believe number two, the way it needs needs to be

clarified. So the way I interpret romanette two, it says

actual rates the institution does not disclose are

inflated, which means that the rates not disclosed are

inflated by those means. I think the intention of the

Department is the opposite. So actual rates that are

disclosed are inflated by things that are that are actual

rates are inflated by the following things not disclosed.

So it's just a language construction question. I think

the intention is reversed. In general, I have no issue

with this. I think Misty raises a really interesting

point and valid one on sub (B), and I would give a couple

of examples for the Department to consider. For example,

if I am employed, I'm thinking about my local economy, in

a theme park local to where I live and I come into a

program on hospitality and I graduate from that program

and get a more advanced job in that theme park. By

definition, I therefore have included my knowledge and

grown my employability, but I would have to be excluded

from the employment rate. So I would I would be, I would

struggle a bit with that because again, you know, not

necessarily. It's not necessarily the employability in

Committee Meetings - 11/03/21

the field. It may be the skills are developing me for

advancement in that field. I think the way this is

written, this also again, sub (B) also provides

disincentive for institutions to assist in externships

and other programs that may lead to part-time employment

prior to graduation. So at my institution, most of our

students are part-time. It is likely that during their

tenure, they will begin to find placement in the in

employees in the field that could in fact lead to future

opportunities. And we don't want to disincentivize that,

and we don't want to penalize the school for encouraging

students to explore the field prior to graduation. So

again, I have some significant concerns about that sub

(B) and thank you to Misty for highlighting that because

I missed it on my first review.

MS. HONG: Thank you. Thank you for

your comment, Daniel, real quickly, I just want to point

out that this is that's definitely not the intent of this

action. Remember, this is this is applying to graduates.

So I mean, with with the with the idea that those

internships and externship placements would lead to

meaningful full-time work for the graduate.

MR. BARKOWITZ: Right. But I guess my

feedback is that sometimes you're placed in an

internship, say in your sophomore year that leads you to

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part-time employment in your junior year. And by the time

you graduate, you've already begun work in the field.

That is not an internship or an externship. And by this

definition, once I graduate, I would be, you know, I'd

have to be excluded from that consideration. So, you

know, the concept of prior to graduation is problematic.

And again, it doesn't address my first point about

further knowledge development in the field.

MS. HONG: Point taken, thank you.

MR. TOTONCHI: Thanks. I do want to

note that Michale is now at the table on behalf of

accrediting accrediting agencies. Michale, please.

MR. MCCOMIS: Thanks. Nobody can

pronounce that word, really. So just to echo and add on

from a practical component what Daniel was just talking

about that Misty brought up as well. So for just for my

agency, there sub (B) about including students in the

employment rate calculation who were employed in the

field prior to graduation. Yes, to Daniel's point,

oftentimes students will obtain employment in the field

that stems from either an internship or externship or

that they sought out and were able to get on their own.

An HVAC technician who halfway through their program,

starts working as a helper part-time before they get the

full-time gig after graduation is an example of that. But

Committee Meetings - 11/03/21

we we have guidelines and with my agency for, you know,

employment classification, who can be classified as

employed as part of our reporting mechanism. And one of

the areas is career advancement. And so what we require

from institutions for in order to count students as

employed who were already employed is that they were able

to maintain the employment position due to the training

provided by the school because maybe technical elements

of the position changed and they needed to get additional

training, or that the student would be able to attest

that from both the employer or the graduate, that the

training supported the graduate’s ability to be eligible

or qualified for advancement due to the training provided

by the school. So we have those two carve-outs of what we

call career advancement, and those are very important

elements of the many programs that are offered,

particularly in vocational fields. So I just offer that

as probably being somewhat problematic to just a blanket

you can't count anybody that was that was employed, you

know, prior to graduating. I get what you're trying to do

there. But the what happens more predominantly are these

types of career advancement positions.

MS. HONG: This discussion is helpful,

I'm just wondering if that's easily remedied by

qualifying that it's employment that is unrelated to the

Committee Meetings - 11/03/21

program study that we're talking about.

MR. MCCOMIS: If that's the case, then

that would be a super useful clarification. I thought

that what you what was intended here and reading it was

that you were saying we've seen predatory practice where

a student was enrolled, was employed as a medical

assistant and they came out of graduation and they were

still employed as a medical assistant. They didn't

advance, they didn't get any gain, any gainful employment

because of that. But if it's if it's no, you cannot count

somebody in employment classification who was employed in

an unrelated field, get the training and then still have

that same job accomplished. If that's the intent, then

that clarification would be very useful.

MS. HONG: I think we certainly want to

grab that those that population that you described

Michale, and if either Michale or Daniel have any

suggested language to send regarding the career

advancement piece, that would be useful for us.

MR. MCCOMIS: I'll post the, my

agency's guidelines for employment classification in the

chat and you'll see in there the specific language that

we use. Would that be helpful?

MR. TOTONCHI: Jessica.

MS. BARRY: Yeah, I just wanted to

Committee Meetings - 11/03/21

agree with Michale and Daniel on a lot of those points. I

went through this with our career services director too,

and he had some concern about internships being included

because he's seeing that especially our highest-level

employers, our most exclusive employers, a lot of them

are starting almost every employment, at least at the

entry level with an internship, and sometimes we have a

really short window to place the graduate. And so he

would hate to see for us to start shying students away

from those internship opportunities when we have that

short window, because sometimes those lead to the best

employment opportunities. So just something to think

about.

MR. TOTONCHI: David.

MR. TANDBERG: Just a point of

clarification if, using the internship example, would

those students under the red line text that we're reading

now, would those students be excluded from both the

numerator and the denominator? Or are they just excluded

from the count of employed students? Because that that

would make a big difference as to the incentives, right?

If they count against the school, I could see an

incentive being put there, but if they're not counted at

all, then it wouldn't be the same kind of incentive that

Jessica is highlighting.

Committee Meetings - 11/03/21

MR. TOTONCHI: Michale.

MR. MCCOMIS: Well, well, just to

David's question, that would not be an allowance that

most accreditors would have. So you don't get you don't

get to pick and choose which graduates. Now you report on

there are some exclusions. But one of those that that my

agency doesn't include students that were employed

before. So that's the only way you can take them out as

from both the numerator and the denominator. Otherwise,

we're counting all graduates. Of that number, how many

are employed utilizing the guidelines for employment

classification?

MR. TANDBERG: And that was my

assumption also. And I think that's the way most state

agencies would calculate it. It wouldn't be an exclusion.

MR. TOTONCHI: Josh.

MR. ROVENGER: Thanks, I guess I'm a

little confused by this discussion, just because, I mean,

doesn't this provision only come into play if there are

misrepresentations regarding what the institution is

doing here? So let's say if an institution is puts

forward an employment, a job placement rate and says this

includes individuals who are placed in an internship or

individuals who were employed in the field prior to

graduation. I mean, that wouldn't constitute, I don't

Committee Meetings - 11/03/21

think, a misrepresentation if the institution is being

honest about it on the front end, though, if I'm

incorrect about that, that would be helpful to know.

MS. HONG: Josh, thank you. That's

you're absolutely right, the qualifier preceding this

section is misrepresentation regarding the employability

of an eligible institution's graduates includes, but it's

not limited to limited to false, erroneous or misleading

statements concerning everything under that section.

MR. TOTONCHI: Daniel, I see your hand

is up.

MR. BARKOWITZ: Yeah, thanks. I just

want to respond to Josh, I think this is my question

about the romanette. And again, Jen, thank you for

teaching me the word romanette, but the the romanette 2,

I just I don't understand the English construction of

that clause. The actual rates of the institution does not

disclose. So is it is it that the rate is not disclosed

or the information is not disclosed? That's where I'm,

Josh, that's where I'm struggling in concert with the sub

(B). And I appreciate your clarification, but I just I

need some help on understanding what's intended by that.

And I'm not sure the language gets to what you've stated,

Josh. So as I read it, is it the rate we're not

disclosing or the fact that the rate is calculated based

Committee Meetings - 11/03/21

on what's listed below that becomes the issue?

MR. TOTONCHI: Michale. You're on mute,

Michale.

MR. MCCOMIS: That's right, I mean, I

think that the construction of the language here is that

the that the issue is that the rate is inflated by using

these means. That any use of these means, by definition,

inflates the rate, you can't qualify that away.

MS. HONG: Yeah, I think that that

wasn't intentional. I think we're talking about the

inflation of the rate. That does not disclose

(inaudible), Doesn't add anything (inaudible).

MR. TOTONCHI: Thank you all. Jennifer,

at this stage, do you want to continue to proceed?

MS. HONG: Yes. Moving on to continuing

on that same document. A new 668.75 in fact. And so we

were just interested in your feedback. This is just an

example of what we're considering and where we're

considering placing it. I believe some of this was at

least a result of our back and forth with state AGs and

draws elements, terms from New Jersey's Consumer Fraud

Act, including concealment, suppression or absence of

material information. Except that Subpart (c)is drawn

from language already in the federal regulations

concerning misrepresentation. So we are open to feedback

Committee Meetings - 11/03/21

on the appropriateness of this language and are open to

feedback and alternate suggestions for the best ways to

define omissions. Let me just read it again real quickly.

“An omission of fact includes the knowing concealment,

suppression or absence of material information or

statement with likelihood that others rely upon such

concealment suppression or absence in connection with the

nature of the institution's education programs, financial

charges or the employability of the institution's

graduates. An omission of fact includes, but is not

limited to, the knowing concealment, suppression or

absence of material information or statement concerning-

the entity that is actually providing the educational

instruction. (b), the availability of slots or

requirements for obtaining admission in a program where

the institution placed the students in a preprogram at

the time of enrollment. (c), factors that would prevent

an applicant for reasons such as prior criminal records

or preexisting medical conditions from qualifying to meet

requirements that are generally needed to be employed in

the field for which the training is provided. (d), the

nature of the institutions, educational programs,

institutions, financial charges or the employability of

institution's graduates.”

MR. TOTONCHI: Joe.

Committee Meetings - 11/03/21

MR. SANDERS: So I want to make one

point and then I'd like my alternate actually to weigh in

here as well. I'm concerned by the term “knowing”. I

think it's very difficult to prove a school's state of

mind on an omission, and, you know, that's not a part of,

that's not under Illinois's Consumer Fraud Act, that's

not required. And so I think any student is not going to

be in a position to prove what the school knew or didn't

know. And I think even from a law enforcement

perspective, you know, we don't normally have to prove

that. So it would be a higher standard than we are

currently held to by our State Laws. That being said, you

mentioned New Jersey, so I want to refer to my my

colleague from New Jersey to the extent that he knows

whether that would be an element in his state.

MR. TOTONCHI: Eric, if you could come

on camera. There you are.

MR. APAR: Yeah, thanks, Joe, so I

would have to go back to some of my colleagues and ask

whether they've had experience interpreting the term

“knowing” I don't want to speak out of turn here.

MR. TOTONCHI: There are no other

comments at this stage, Jennifer.

MS. HONG: Yeah, I think. And then the

last part is just a severability piece. Unless there are

Committee Meetings - 11/03/21

any other comments, we can maybe take a, I see Heather.

MR. TOTONCHI: Heather, please proceed.

DR. PERFETTI: Thank you. And this may

be a question for Jennifer, I'm trying to gain a sense

for the interconnectedness of what is here with

institutional information that's required under 668.43 or

668.45. So just trying to understand if there is a

mapping certain information is required by institutions,

is the misrepresentation and omission intended to be

reflective at all of what institutions are required to

provide for enrolled and prospective students under those

other regulations?

MS. HONG: Right, so remember that,

yes, the answer is yes, this is from this is under

general provisions, so this is not under the BD

regulatory section. We are just cross-referencing it for

consistency sake. So this is under general provisions

because we have an existing definition. We want to make

sure that we can just as opposed to proposing or being

redundant in the effort to streamline. We're just going

to cross reference what already exists. And we've

provided more other examples to the nonexhaustive list.

DR. PERFETTI: Thank you.

MR. TOTONCHI: Justin.

MR. HAUSCHILD: Yeah, thanks. I just

Committee Meetings - 11/03/21

wanted to flag that I'm going to drop some alternative

language into the chat on this. I think we're generally

supportive of what the Department is trying to do here,

but harbor some of the same concerns that Joe mentioned

with regard to the word “knowing” and “reliance”,

generally speaking. And we'd like to see some additional

categories included here to address things like omissions

of back with regard to the academic experience and

instruction who who's providing that at the institution

specifically with regard to ineligible third parties, how

academic terms are initiated in instances where a student

isn't notified or they may be enrolled in a term without

their express consent or knowledge. And then similarly,

with regard to the structuring of programs and the

student not having affirmative information with regard to

how those programs are structured or bundled or staffed.

So I'll drop that language in the chat. Thank you.

MR. TOTONCHI: Thanks, Justin. So at

this stage, Jennifer, unless you would like any other

guidance, let's take a temperature check for tentative

agreement on the red line text that's currently in front

of you now. So give me, please provide your thumbs and

please be ready if you are, you know, if you haven't

spoken up and if you have a serious reservation to speak

up. Oh, we're cutting you off Joe and Daniel. Go ahead,

Committee Meetings - 11/03/21

Joe and Daniel, and then we'll see if we can do a temp

check after your comments.

MR. SANDERS: There's a lot that we

just went through, and I don't feel like I'm in a

position to temp check all that, right, that's like. And

I understand that it's kind of a standard thing, but I

mean, and in terms of we're dealing with a lot, but I

don't know that I can temp check everything we just went

through up to this point this morning in one go.

MR. TOTONCHI: Fair. Fair enough. That

was a lot. Daniel, is your, the same comment?

MR. BARKOWITZ: Well, sort of, I guess

I'm asking. I wanted to ask, is it specifically the

misrepresentation section? Because we started on the much

larger section. So I'm just trying to understand what it

is we're temp checking. Are we temp checking the

misrepresentation section or the language that also is

included in the general overarching overarching language

in the reg text pages one through five that we've already

discussed? So I'm comfortable taking a temp check on the

misrepresentation section. I just, I want to understand

what it is we're temp checking.

MR. TOTONCHI: Yeah. Well, let's let's

I actually appreciate. I mean, Jennifer, if you have

another way of that, you'd like some feedback, please

Committee Meetings - 11/03/21

suggest it. But you know, for example, Suzanne in the

chat has suggested by section, we can do that. But

Jennifer, do you have another suggestion?

MS. HONG: Yeah, if I would just if

it's helpful to break it up. Like we've gotten to the

federal standard, what, you know, the five bases that

constitute a federal standard in the general BD

regulations. If we could do a temp check to where we are

for that and then another temp check on

misrepresentation. I realize there's a lot in

misrepresentation. I don't know if that's what Joe's

concerned about, but just it's just a temperature check

just to see generally how people are feeling up to this

point on those issues. So two different temperature

checks, one where we are generally, we talk about the

structure of the BD regs, the probability of the BD regs

and what the five bases for claim. And so that's one. And

then and then temperature check on the definition of

misrepresentation.

MR. BARKOWITZ: And again, I'm sorry,

but one of the five representations is aggressive

recruitment, I know we have yet to discuss that. So

again, in theory, I could vote, but until we have, the

particular conversation, it's going to hard.

MR. TOTONCHI: Are you referring to the

Committee Meetings - 11/03/21

proposal that's been made by committee members, not the

Department or?

MR. BARKOWITZ: No, the Department's

proposal that is a separate document from the Department

on what constitutes aggressive recruitment. And then

there was a counter proposal made as well.

MS. HONG: You're right, we can ask, so

would it be better because we're just going to get into

the aggressive recruitment, that discussion is more, you

know, more of a, I guess less refined. So if we what if

we could take it, how about a temperature check on misrep

and then we can move into the aggressive recruitment

discussion if people are comfortable with that?

MR. TOTONCHI: Okay, is everyone clear

with a temp check is on at this stage? You can say no if

you're not. So let's take a temp check for tentative

agreement on the misrepresentation section. Let me see

thumbs please. Alright, I know a number of you have

raised a number of points during our conversation, if

there are any additional points you haven't raised,

please do so. I can't tell if there are any thumbs down

for for folks that did not speak during this section. If

you haven't spoken, please share your serious

reservation. Jessica, go ahead.

MS. BARRY: I've spoken, but I just

Committee Meetings - 11/03/21

want to be clear, because I've been thinking about the

conversation that's been going on. I just think that the

Department should have to determine that there was a

reliance upon the misrepresentation and the student was

harmed or the borrower was harmed. So that's why I voted

no.

MR. TOTONCHI: Joe.

MR. SANDERS: It's possible that I

could be a sideways on this, but I have a 3:00 p.m.

central time call with my constituency where this is

going to be covered and so I don't want to give the

Department that false sense that we're all behind this

before I get feedback from, you know, I've got 50 other

members that I should, because this is so central to kind

of what we do, I want to get that feedback before I

before I give the thumbs up, so that's that's the only

addition I have.

MR. TOTONCHI: Thanks. David.

MR. TANDBERG: Yeah, I could likewise

very easily be a sideways, and maybe if you'd asked me

five minutes later, I would have been a sideways. The big

concern I have is that just I need to, there was really

important (inaudible) now written, and I'm not clear as

to which points the Department has agreed with us on. And

until I have clarification on those points, I can't

Committee Meetings - 11/03/21

really be a yes. But I'm, you know, very close to it.

MS. HONG: Just just to follow up with

that, David, you broke up a little bit. If you could

speak more specifically about what, you broke up, so what

points were keeping you from sideways?

MR. TANDBERG: Yeah, it was it's mainly

around the language regarding the disclosure and

misrepresentation. Are we, are the items there, things

that cannot be used in the calculation, for example, of a

job placement rate or are they items that must be

disclosed if they are being included in the job placement

rate? That's a huge difference or any of the

misrepresentation, you know? And so, you know,

clarification on that is the Department, what's the

department's intent? That never became clear to me.

MS. HONG: Is that the same concern

with the accrediting agency constituency?

MR. TOTONCHI: You're on mute, Heather.

DR. PERFETTI: You're asking about

accrediting agencies, I was agreeing, yes, with David, I

think until we can see the language and process how that

would be implemented, it's hard to give us thumbs

sideways even right now.

MS. HONG: Right, but we're we're

talking specifically about the employability of graduates

Committee Meetings - 11/03/21

section, the placement rate.

DR. PERFETTI: And I think also some of

the conceptual language that Daniel was referencing, once

that gets clarified, I think it would be helpful for us

to see it rewritten as well.

MR. TOTONCHI: Well, at this stage,

just before we move on, oh, Greg, you have a comment.

Please.

MR. NORWOOD: Yeah, real quick and we

were thumbs sideways, but I was just wondering how we

could even prove, and I think Josh mentioned this, I

mean, State AGs mentioned just earlier, how can you even

prove reliance or how the Department of Education could

prove that? And if like, if that is a prohibitor, I would

just caution to maybe develop, how could we even as

students know, you know, we're talking about students?

Not not legal experts, but but students. How could we

prove that an institution or whatever the case may be?

Thank you.

MR. TOTONCHI: Thanks, Greg. Jennifer,

before we move on, seeing as there’s no hands up, does

the Department, would the Department like any other

guidance from the committee before we move on?

MS. HONG: No, I think this is helpful.

We'll move on, we can move on to the document. The third

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document, Vanessa, this is the one that says draft

Borrower Defense to repayment language there is, it's a

separate document, and this will help us talk about

aggressive recruitment. Great, thank you. So this is,

this is a document we've kind of collated suggestions

from State AGs, some 2016 language, BD language and

language from the CFPB. Let's put a, I wanted to jump

down to, well, okay, we'll talk the violation of State

Law. Actually, Joe, if you're on, can you talk about this

piece on the violation of State Law? This is this is what

you, your constituents have provided and then we can go

into aggressive recruitment.

MR. SANDERS: Yeah, sure. So, you know,

our concern here was with consideration of State Law

claims and not wanting to create additional burdens for

students who wanted to have a State Law claim considered.

And so, we also heard the Department on the

administrative burden of considering State Law in all

instances, and so we tried to come up with a compromise

here and so we pulled language from the 2016 rule, that's

the language in red. And I should note that we had

feedback and actual help drafting from the legal services

community, so kudos to Josh and Persis's colleagues at

the National Consumer Law Center for their work on this.

So we pulled the language from the 2016 rule that's in

Committee Meetings - 11/03/21

red, then we tried to create this compromise between the

Department's original proposal, which was that you'd have

to appeal and bring your State Law claims separately

after denial. And so if you look at section (a), section

(a) has a requirement that the State Law be alleged in

the application. And it gives the Department the

discretion to look at the State Law piece prior to the

federal piece should they choose to do so. And then in

(b), we have a component that allows the Department to,

should the Department choose to do so, they could

consider it without the allegation. So bottom line here,

we're trying to bridge a gap that would reduce a burden

on students, but also not place an un-administrable

burden on on the Department, that's the goal. Happy to

take questions if I can clarify for this.

MS. HONG: Actually, I did. I put you

on the spot and I asked you to talk about this. If we

could put a pin on this piece, I did want you to present

it so that folks can kind of sit with it. We're going to

talk about this proposal and the state review generally

when we get into the adjudication. If we could put a pin

on that discussion and then continue with aggressive

recruitment. But thank you for that, Joe. And again, this

is, this continues with language that the State AGs had

put forward and that is, I can read that out loud,

Committee Meetings - 11/03/21

aggressive, “aggressive recruitment means exerting

unreasonable pressure upon a consumer to enroll in an

institution without limiting the general application of

foregoing the following conduct is a violation of the

section” and again, and Joe, you can jump in here as

well, because I realize you provided this, these are all

different citations where some of these subsections come

from. But just to give a quick review, “Exploiting a

consumer’s fears, anxieties, insecurities, or any

specific misfortune or circumstances of such gravity as

to impair the consumer's judgment to influence the

consumer's decision with regard to the institution. (b),

Interfering with the ability of a consumer to understand

a term or condition of enrollment or a financial product

or service related to enrollment. (c), Taking

unreasonable advantage of someone's lack of understanding

of higher education and financial aid by reason of

socioeconomic background, lack of familiar experience and

higher education or other reason.” We've heard a lot

about that throughout this discussion session one. “(d),

taking unreasonable advantage of someone who recently

relies on the recruiting individual or entity to act in

their interests; Reasonable reliance shall be presumed if

the recruiting individual uses a title that implies

they're acting in the best interest of the student,

Committee Meetings - 11/03/21

including but not limited to admissions for guidance

counselor or academic adviser. (e), unsolicited contact

with a borrower that has previously requested not to be

contacted. (f), the use of threatening or abusive

language or behavior. And (g), exerting unreasonable or

unsubstantiated time pressures upon a consumer.” Just to

go back to the issue of reliance. I just wanted to loop

back to Greg and I think Jessica. Remember, we're

inferring reliance if a reasonable person could have

relied upon it. And let's let's pause there and see if

there's any questions or concerns about that. Everything

under aggressive recruitment in that first paragraph.

MR. TOTONCHI: Daniel.

MR. BARKOWITZ: Thank you, Emil. So,

first of all, I note that this is one of I think, three

options that are listed from the Department or, you know,

captured in this document. And then a group of us

provided a fourth definition and concept for discussion

as well. I do have, so first of all, I want to be very

clear, none of these things are good and appropriate. And

so I have I have reasonable agreement with with this

definition in terms of the the fact that all of these are

bad actors and bad actions. I have a concern, though,

about the subjective nature versus objectivity and

reliance on objective statistics for some of these. So,

Committee Meetings - 11/03/21

for example, I'm not sure how one would demonstrate the

exploiting of a consumer's fears or the interfering with

the ability to understand the term. So I'm looking for

some help with some of that. And again, this is, others

of this piece are very objective. So the use of

threatening or abusive language is objective and can be

documented. But the subjectivity concerns me on some of

these. And while I understand the intent and support the

intent, I wonder if there's another way to get to this

without it being a subjective piece. So if we're in a

meeting, I could be accused of subjecting or exploiting

your fears or anxieties without without knowledge. So

that's that's really, I think the objective and and I

would suggest again, I know we're not there yet,

Jennifer, but let's, you know, if we can also look at the

group of proposals that that some of us put forward as

part of this conversation. We've tried to be objective in

our in our assessment.

MS. HONG: Thank you. Thank you,

Daniel. And yes, let's revisit some of the language that

you put for you and others put forward. And the point is

well taken. We have the same concerns here, so we are

open to, you know, these these are the concepts that

we're trying to get out. What does that look like in

terms of when you're adjudicating these claims? And I

Committee Meetings - 11/03/21

think getting to language that is measurable in terms of

what this result in, I think that's we would appreciate

any feedback or proposals or proposal language on those

issues.

MR. TOTONCHI: We have a number of

hands up. And I am curious as to whether the hands have

to do with this specific option or if it's another

option. So just if your comment is going to be regarding

another option that we haven't gone over yet, just please

be clear about that, okay? David.

MR. TANDBERG: Yeah, in all of these

items, one of the concerns that I have in my constituency

is whether these can be written to apply to agents of a

college. So we see increasingly that nonprofit and public

institutions are contracting with external for-profit

firms for their recruitment admissions, enrollment

management services, often their contracts are written in

such a way that they try to provide themselves protection

against such regulations and laws. And so we would want a

misrepresentation, aggressive recruitment and other rules

that we write to apply to the institutions or the agents

of the institutions. And so I see Joe. Yeah, yeah. Thank

you, Joe. So that that hopefully it sounds like is in the

language that we work with Joe on. And but something to

keep in mind for all of the rules that we're considering

Committee Meetings - 11/03/21

is when do we want them to apply to other entities

contracted acting on behalf of the institution? Because

that's a growing problem.

MR. TOTONCHI: Thanks, David. Greg.

MR. NORWOOD: Yeah. Quickly, I just

wanted to, first of all, appreciate fin-aid for,

financial aid, for for the comments. But I think again, I

think when when you come, I think context matters and

when you're talking about individuals from low income

communities, from, you know, people of color, or even our

veterans, I think that some institutions know how to play

on some of the fears that that the future isn't possible

without a college education from this particular

institution or that, you know, just there are different

ways by which institutions use context to try to almost

suggest that without this collegiate experience, there is

no hope type, type, type of thing. So I think that is

something that is relatively easily, relatively easy to

approve. And I think that while it would be a challenge,

maybe towards institutions, I understand your object and

subject of conversation or comment, but I think that I

think that this is one that that happens all the time.

And certainly, I think a lot of students have an

experience whereby they were contacted by a recruiter,

contacted by someone who essentially told them that this

Committee Meetings - 11/03/21

institution is the only institution and there's no other

way to go about success. And that's not necessarily true

at all, particularly those within the context of the one

that I come from. Right, low-income, you know, colored

community.

MR. TOTONCHI: Alright, Joe.

MR. SANDERS: Yeah, so I want to push

back on the idea that this standard is somehow subjective

and can never be proved because that's just not the case.

This was common practice in the industry, the for-profit

school industry for a long time. We have investigations

where we have training manuals that talk about things

like the pain funnel, right? This is a term that a lot of

us on the call today have heard that exploit the

borrower's pain funnel. And this is the type of thing

that Greg's talking about. Schools would train their

recruiters to specifically get the person talking about

their hopes and goals and dreams. And then they would

push the person to enroll by saying, well, don't you want

to provide a better life for your family? Don't you want

to do this? Don't you want to do that? You know, you can

do it. Just sign up with us today. Right? So this is

well-established activity. It can be proven through

internal documents from the company. It can be proven

through call recordings. I have listened to a lot of

Committee Meetings - 11/03/21

recruiting phone calls in my eight years at the Attorney

General's Office and they're the type of things that make

you blush when you when you hear the stuff that

recruiters tell students in order to get them to enroll.

And so, this standard here, you know, we have to get at

this conduct, this is what aggressive recruitment has

looked like for the last 10 years. Happy to talk about

tweaking the language, but am 100 percent against

removing it, because it's too subjective or anything

along those lines.

MR. TOTONCHI: Thanks, Joe. Jeri.

MS. O'BRYAN-LOSEE: I'm going to agree

both with Joe and with what Greg was saying, It's, you

know, consistent phone calls. It's, you know, blowing up

emails, which is one of the reasons students don't answer

their emails, they get blown up with all of these, you

know, time's running out. You're not going to be able to

have the future you want unless you go through us. I

don't think it's it's it's hard to prove at all. And it's

I think it's necessary language to make sure that our

students are protected in in these cases.

MR. TOTONCHI: Thanks, Jeri. Justin.

MR. HAUSCHILD: Yeah, thank you. Just

want to say that I think, broadly speaking, we're

generally supportive of this particular approach to

Committee Meetings - 11/03/21

aggressive recruitment, we'd be supportive of it actually

being strengthened further to include some additional

instances or categories of things that would satisfy or

qualify as aggressive recruitment and also be supportive

of that being strengthened, strengthened further. And I

think there's some indication that that's in the works

with regard to third parties that that is not a novel

idea. There are examples of that very thing, both within

DOD and in more more recent policy focused on the

Department of Veterans Affairs. So I just wanted to

express general support and support for it being

strengthened further, especially in both of those areas.

Thank you.

MR. TOTONCHI: Heather.

DR. PERFETTI: Thank you, and thank you

to Joe for offering to tweak some of the language because

I know I was a part of some of the discussions with

Daniel in this smaller group, and I think that we were

looking at some of the more specific areas that made it

clear what the behaviors were to those that may not have

the years of experience that that you all have seeing the

behavior. So I certainly wanted to express appreciation

for that. I also wanted to speak to David and Justin's

comments from the accreditor perspective in terms of the

contracts that may exist with institutions or what we may

Committee Meetings - 11/03/21

call as third party providers. Certainly, there's an

increased reliance on that by institutions and

accreditors do hold institutions responsible for any

activities or actions under their name. And so for us, we

do have requirements for institutions relating to those

arrangements and where they are problematic, we can

certainly pursue noncompliance actions against the

institution. So I did want to offer some support for that

as well. And I did note that in the chat, Michale placed

a comment there as well about his agency that they

require recruitment to be done by institutional

employees. So we do see some activities from the

accrediting perspective that I think lend well here.

MR. TOTONCHI: Great, thank you, I do

want to note that new language has just been circulated

via email. So please take a look at that. Noelia.

MS. GONZALEZ: Oh, yeah, thanks. I just

wanted to make sure that we differentiate between some of

the aggressive practices we're talking about and what

maybe some of the publics and nonprofit campuses are

doing, specifically the marketing and outreach to

students around the May 1 national intent to enroll

deadline. There are a lot of emails that go out to

students during that May 1 or just prior leading up to it

to ensure that students don't miss that specific, very

Committee Meetings - 11/03/21

important deadline. Because if they're not committing by

that May 1 date, they may not come, attend that campus

after that. So I do want to differentiate some of these

email blasts that go out from the from the nonprofits and

the the public institutions to ensure that students

aren't missing vital deadlines.

MR. TOTONCHI: David?

MR. TANDBERG: Yeah. Thank you, Noelia,

that was something that Joe and I and others discussed

via email and comments to the document quite a bit

because recruitment can be a very good thing. And for,

particularly students who don't think they are college

material to be recruited wakes them up. They see more

options. And and so we don't want to restrict helpful

recruitment that is reasonable, that helps keep campuses

alive, that helps students see their options. And so we

actually did cut some language in order to allow for

that. If there is more that needs to be done, I think we

should because we do want students to be recruited. We

want them getting mailers and emails. It can get annoying

as a parent for two students who went through the college

process, but at the same time, my student, my kids were

so flattered, you know, it was kind of cool to be wanted.

So absolutely.

MR. TOTONCHI: Thank you, David.

Committee Meetings - 11/03/21

Jessica.

MS. BARRY: I just want to just support

what Noelia and David were saying. I just want to add a

comment. I started my career as a graphic designer and

then moved into higher ed. So I've been working on

marketing for a long time. And when I think about what we

used to do 20 years ago to let even students know about

an open house, you know, we used to send them an

invitation and maybe follow up with some phone calls to

get their RSVP. But because now there are so many

different communication channels and not all students pay

attention to the same channels. You know, I look at our

marketing campaigns now, and they are so much more

complicated because we're having to send emails and texts

and we're still calling and sending direct mail. And

we're also doing some social campaigns just because we're

trying to reach the students. And I know everybody's

recruiting students for different reasons. You know, it

could be because in my case, their artistic talent, it

might be academic or athletic talents. So yes, I agree

with what's been said that we don't want to stifle that

because that helps students make good decisions.

MR. TOTONCHI: Thank you. Jeri.

MS. O'BRYAN-LOSEE: Okay, I understand

all that, but that's not what we're talking about. We're

Committee Meetings - 11/03/21

not talking about the can you please come to my school?

Here's my catalog. We're talking about predatory, the

pain funnel. If you've never lived in the pain funnel,

the pain funnel is real. It's it's not about general

admissions that, you know, you go to a college fair.

That's not what we're talking about here. We are talking

about people who are targeted because of their economic

status, because their first gen, because of that, they're

targeted for a reason to get money that then students

can't pay back. So I just want to like make sure we're

really clear on the student aspect of this. This happens

all of the time. And it's not a, we mean well, and we

want you to do well because you're not represented,

there's a way to recruit people who are underrepresented,

who don't know the process and doing it through a pain

funnel. I love that phrase. It'll be on a hat at some

point, because that is the truest thing about what we're

actually talking about here, is really what individuals

are going through. Thank you.

MR. TOTONCHI: Thanks, Jeri. And I see

Dixie is at the table for dependent students now. Please

proceed, Dixie.

MS. SAMANIEGO: Yeah, so I really

wanted to kind of push back a little bit on what folks

were saying and especially as a CSU student. So I attend

Committee Meetings - 11/03/21

Cal State Fullerton, which is housed within the largest

four-year public university system in the nation. The Cal

State University system, which is where Noelia is from as

well, so, hey, but I also I do recognize and also there

is important right to like, hey, May 1st deadline is

coming up, right? That was particularly helpful for me.

But the difference here is that students are being preyed

upon on our inexperience and not having right the

knowledge that we really need to differentiate like, oh,

this, this campus or this university system is like

reminder, right? We I when I was a senior, could not

really differentiate like May 1st deadline with, hey,

we're going to aggressively recruit you to our campus

because you're a first gen Latina, right? You're the

first person in your family to graduate high school,

which was the case for me, right? Like, even despite

having an older sibling like I was the first to graduate

from high school and I went to a poor high school filled

with brown students. And I'm a brown student myself. So

of course I'm going to like, I'm going to be aggressively

recruited. And so I want to push back on that idea that

like, well, you know, these public institutions, right?

Whatever, these institutions are doing it for the good of

their heart and like, right, there is a difference, yes.

But also the majority of these recruiting tactics are

Committee Meetings - 11/03/21

aggressive. And so we need to, yes, that reminder email

is helpful. But the difference, the difference in that

and getting phone calls all the time to come to an event

and this and that and this and that every every couple of

weeks, that is aggressive, that is aggressive and it's

tiring and it's emotionally and mentally, and at some

point for me, physically taxing right to be someone

trying to navigate an entire educational system, not

knowing. And so I think a lot of what the points made

here lacked a lot of perspective from students. And

specifically, I shared my perspective and my experience

as a first gen Latina student being aggressively

recruited the first session. And so I wanted to bring

that that experience back because that the reminders are

helpful, like May 1st deadline. Right. That's different

than getting phone calls from an institution consistently

every week or every two weeks on the clock, on the hour,

right? That's different. And I wish I could submit

through the entire committee. Thank you. I could I wish I

could submit could submit phone call records from

institutions that I would like, cause I would be getting

every week to attend things that weren't even pertinent

to my degree pathway or what I was interested in, right?

And so, right, we're being exploited until there is a

difference between a reminder, then what is what we're

Committee Meetings - 11/03/21

talking about here. And that's what the perspective and

the point point of views that were shared that it lacked

that perspective from a student that was aggressively

recruited based on their identities.

MS. MACK: We're at time.

MR. TOTONCHI: Thanks, Dixie. Joe.

MR. SANDERS: Just very briefly, the

definition of aggressive recruiting that we're looking at

here, it wouldn't, we specifically excluded stuff that

would have implicated what Noelia was talking about or

what Jessica was talking about. They're, the only thing

that would apply is unsolicited contact with the borrower

that has previously requested not to be contacted. Right,

so there's nothing in here that puts a bar on schools

talking about May 1st or other substantiated time

concerns. So we really did try to, you know, be

thoughtful in protecting protecting students, but also

allowing institutions to communicate with people that

want to be communicated with.

MR. TOTONCHI: Thanks, Joe. Daniel.

MR. BARKOWITZ: Yeah, sorry, trying to

find the mute and open up Word and everything at the same

time, sorry about that. So Joe, if you can, and this is

really helpful. Let me back up. First of all, Dixie, Greg

and others, I appreciate the the voice you're raising.

Committee Meetings - 11/03/21

And again, my concern is that I want to make sure that

the way the the regulations are written, that we're not

catching the good actors with the bad. I have no, I have

no, and Jeri, I have exception to the pain funnel as

well. I think it's that is ridiculous and and

exploitative, and I just want to be very clear, right? My

concern all along has been, though, that we not be so

broad as to catch the good actors with the bad actors.

And so I'll go back to where I started, which is, you

know, I'm looking for something objective, something that

that says this is the behavior that cannot be done. And I

get that, Joe, to your point, earlier, these may fall

under objective standards, but is written exploiting the

consumer's fears as an example. Right? You know,

documented how? So, is there a way for us to show or talk

about how that could be documented so that again, we

don't, you know, by casting a wide net, and I want to be

careful because I want to cast a net wide enough to catch

the examples that you've given. But by the same token, I

don't want to cast it so wide that we snare institutions

that aren't in place, and I'll use a a point of view that

has been shared before. You know, this is going to depend

on the administration, I think, in place at the time. I

want to be careful that different administrations don't

take a different view on this. To the students credit, I

Committee Meetings - 11/03/21

want to be careful that we're protecting and and careful

about student perspective. So I want to I want to cast

the net wide enough, but also not cast it so wide. And so

I look for some help. It also would would like us, we

spent a lot of time on this first definition. I'd like us

to look at some of the others because I think there may

be pieces that we can pull and and, you know, reflect in

to the to those pieces.

MR. TOTONCHI: Thank you. I see we have

a few comments, we have about five minutes left in the

morning session. I don't want to prematurely cut off the

discussion. It would be nice before the lunch hour to

take some kind of temp check given that there has been a

lot of discussion and I don't want it to be lost. If

that's not appropriate, that's fine but that's just as

facilitator something I'm thinking about doing. Josh. Oh,

Jen, Jennifer, go ahead.

MS. HONG: I was just wanted to we

might need to take that temp check after lunch because we

still we still don't. Yeah, but this is all good, it

sounds like in general, people feel positively about the

inclusion of this concept, so I feel good about this

discussion.

MR. TOTONCHI: Well, I'll ask when we

go to lunch, keep the conversation fresh in your head so

Committee Meetings - 11/03/21

when we get back to it, we can pick up from where we left

off. Josh.

MR. ROVENGER: Thanks. So we're very

supportive of, in particular, the new proposal that Joe

just circulated. I do have concerns, though, to Daniel,

your comment. I understand, like I totally get that we

want to distinguish between good actors acting

appropriately and unfair and deceptive conduct. My

concern is that if we get too specific in what we're

listing out, bad, we've seen schools, particularly in the

for-profit industry, find new ways to exploit people and

take advantage of people. And if we're not, I don't want

to use, if we're not broad enough in our language, we're

going to end up creating a situation where these schools

will just find new ways to take advantage of people. So

for example, one school that has just been subject to a

class action lawsuit school lawsuit, a former teacher

testified in an affidavit that on smoke breaks,

admissions officers would bring unhoused individuals into

the office and get them, to exploit their financial

situation and get them to sign up for their school. You

know, I don't think we need to list that specifically in

the regs, but it needs to be covered with whatever we end

up with. And I think the language that Joe just circulate

would capture that and does a nice job of distinguishing

Committee Meetings - 11/03/21

between what we're what we're trying to get after here.

MR. TOTONCHI: Thank you. I just do I

do want to note that Emily is at the table for veterans

and military group. Joe. Joe, where did you go?

MR. SANDERS: Sorry, I'm here. I

lowered my hand after you called my name. Two very quick

things.

MR. TOTONCHI: Oh, go ahead. Sorry.

MR. SANDERS: Yeah, that's alright. Two

very quick things, one, the Department asked for cites as

to where we got these concepts, and so this is included

in what you see here. Moving down from the first one,

many of these are pulled from the Dodd-Frank Consumer

Financial Protection Act. One of the reasons that we did

that is because there are concepts in that law that are

flexible in ways that Josh talked about. It's an

established federal standard which should appeal to the

to the Department here. And then, if you look at B and C,

these are concepts that are pulled directly from Federal

Law and that we saw as directly applicable to schools'

conduct in lawsuits and investigations that we've been

involved with. So we are trying to get definable

standards here, to Daniel's point, we don't want

something that isn't grounded in fact and law. So, second

thing, I'm sorry for distributing the second version of

Committee Meetings - 11/03/21

aggressive recruitment right as we're talking about it,

but I got a lot of feedback from negotiators from my

constituency. And so although the timing isn't the best,

it was my best effort to consolidate everything I got and

get and get it out there for the group to consider. Thank

you.

MR. TOTONCHI: So I see David and Emily

have their hands up. We are at lunchtime, so David and

Emily, you will be the first two to go when we resume the

conversation, okay? Excellent. Well, with that, we are at

12 o'clock Eastern. We'll take a one-hour lunch. Thank

you for the hard work of the committee this morning. Look

forward to continuing the discussion this afternoon.

Appendix

Department of Education

Office of Postsecondary Education

Zoom Chat Transcript

Affordability and Student Loans Committee

Session 2, Day 3, Morning, November 3, 2021

Committee Meetings - 11/03/21

DISCLAIMER:

Note: The following is the output of transcribing from a

recording. Although the transcription is largely accurate;

in some cases, it is incomplete or inaccurate due to

inaudible passages or transcription errors. It is posted as

an aid to understanding the proceedings at the meeting, but

should not be treated as an authoritative record.

From

Brady FMCS to Everyone:

Morning all! I am handling tech issues today. Feel

free to email me at [email protected] with any

questions.

From Michaela Martin to Everyone:

I had to resist the urge to say "Here" like for class

role call lol

From Will (A) FFEL Agencies to Everyone:

;)

Committee Meetings - 11/03/21

From Jen (she/ella): (A) Student Borrower to Everyone:

Lol

From Misty (P) Priv. Non-Profit to Everyone:

HA HA HA!!!!

From Daniel (P) Fin Aid Admin - (he/his) to Everyone:

Is it "here" or "present" that is the proper response?

From Marjorie (P), Four Yr Publics (she/her) to

Everyone:

I vote for "present"

From Daniel (P) Fin Aid Admin - (he/his) to Everyone:

David and Suzanne win for the longest title...

From Brady FMCS to Everyone:

Would alternates mind switching off their cameras?

From Greg, A - Dependent to Everyone:

Sitting in for Dixie this morning

From Michaela [P] Ind. Students to Everyone:

I support this

From Will (A) FFEL Agencies to Everyone:

+ 1 David

From Marjorie (P), Four Yr Publics (she/her) to

Everyone:

+1 David

From Raj - Advisor Econ/Higher Ed/Data to Everyone:

I am ready

From Justin (P) Service Members/Veterans to Everyone:

Committee Meetings - 11/03/21

+1 Josh

From Joe; P, State AGs to Everyone:

+1 Josh

From Daniel (P) Fin Aid Admin - (he/his) to Everyone:

Is Institutional Liability considered through Closed

School Discharge? There is no mention of Liability in

the section on Closed School as currently mentioned.

Is this something addressed in a different sub-

section? Or is there no liability envisioned by the

Department to a school if they close a campus or have

a merger?

From Josh (A), Legal Aid (he/him) to Everyone:

Thank you, Jessica

From Jessica (P), Proprietary Schools to Everyone:

You’re welcome!

From Suzanne Martindale (A) state regulators to

Everyone:

+1 josh

From Justin (P) Service Members/Veterans to Everyone:

+1 Josh

From Daniel (P) Fin Aid Admin - (he/his) to Everyone:

David, I think job placement is addressed by 668.74

(g)

From Joe; P, State AGs to Everyone:

We support use of Department's tax status here

(subsection n)

From Heather (P) - Accrediting Agencies to Everyone:

Is "tax status" a term reserved to the IRS? The

Committee Meetings - 11/03/21

deletion of the term "tax" and a more general

reference to the status determined by the USDE may

improve the clarity of this provision.

From Justin (P) Service Members/Veterans to Everyone:

We'd like to ensure that misrepresentation also

includes misrepresentations made concerning:

Accommodations available to students designed to

assist with physical or mental health issues.

The award, acceptance, or transfer of credit

related to non-traditional learning, including

military experience and training.

The availability or nature of accommodations or

resources for students impacted by military service

obligations.

From Heather (P) - Accrediting Agencies to Everyone:

Alternate Michale will be joining to provide feedback.

I'll turn my video off.

From Marjorie (P), Four Yr Publics (she/her) to

Everyone:

+1 David

From Jessica (P), Proprietary Schools to Everyone:

+1 Daniel

From Joe; P, State AGs to Everyone:

The EDMC consent judgment with 30+ states is a good

starting point to evaluate job placement rate

manipulation: https://www.oag.state.va.us/consumer-

protection/files/Lawsuits/EducationMgmt-

EnteredConsentJudgment.pdf

From Jessica (P), Proprietary Schools to Everyone:

Committee Meetings - 11/03/21

+1 Michale

From Daniel (P) Fin Aid Admin - (he/his) to Everyone:

+1 Michale as well...

From David (P) - State hi ed agencies to Everyone:

I think both are important to capture

From Josh (A), Legal Aid (he/him) to Everyone:

+1 David

From Daniel (P) Fin Aid Admin - (he/his) to Everyone:

I don't. Michale can you help?

From Suzanne Martindale (A) state regulators to

Everyone:

+1 josh

From Rachelle (A) 4 year Pbulics to Everyone:

"The rates disclosed by the institution are inflated

by means such as"

From Heather (P) - Accrediting Agencies to Everyone:

I am back now for Accrediting Agencies.

From Daniel (P) Fin Aid Admin - (he/his) to Everyone:

Or "the institution does not disclose that they have

inflated their rates by means such as"

From Josh (A), Legal Aid (he/him) to Everyone:

+1 joe

From Bethany (P) Disability (she/hers) to Everyone:

+1 Joe

From Justin (P) Service Members/Veterans to Everyone:

Committee Meetings - 11/03/21

+ Joe RE "knowing"

From Jeri (P) Student Borrower (she/her) to Everyone:

+1 Joe

From Daniel (P) Fin Aid Admin - (he/his) to Everyone:

+1 Joe

From Greg, A - Dependent to Everyone:

From Suzanne Martindale (A) state regulators to

Everyone:

+1 joe, deception/misrepresentation in the civil

context does not include an intent standard

From David (P) - State hi ed agencies to Everyone:

+1 Justin (particularly on the "who is providing the

instruction" item)

From Jen (she/ella): (A) Student Borrower to Everyone:

+ Justin

From Bethany (P) Disability (she/hers) to Everyone:

+1 Justin

From Suzanne Martindale (A) state regulators to

Everyone:

we could temp check by section, as we did and the end

of yesterday?

From David (P) - State hi ed agencies to Everyone:

Agreed. My assumption is that the Dept has agreed with

some changes we've suggested but I'm not sure about

other suggested changes.

From David (P) - State hi ed agencies to Everyone:

Committee Meetings - 11/03/21

+1 by section

From Justin (P) Service Members/Veterans to Everyone:

An omission of fact includes the concealment,

suppression, or absence of material information or

statement that deceives or tends to deceive. An

omission of fact includes, but is not limited to, the

concealment, suppression, or absence of material

information or statement concerning—

[…]

the nature of the institution’s educational

programs, financial charges, or the employability of

the institution’s graduates

The entity that is actually providing the

academic services or educational instruction,

including failing to affirmatively disclose that such

service or instruction is provided substantially by an

otherwise ineligible third-party entity;

The initiation of academic terms, including

failing to affirmatively disclose a student’s

participation in an academic term and obtain a

student’s consent to participate in the academic term,

such as automatic course renewals, or sequencing

course offerings in a manner that precludes dropping a

course without penalty...

From Justin (P) Service Members/Veterans to Everyone:

Enrollment in programs of education, including failing

to affirmatively disclose a student’s participation in

an academic program and obtaining a student’s consent

to participate in an academic program.

From Dixie (P) Dependent Students (ella/she) to

Everyone:

Committee Meetings - 11/03/21

How do you prove that then?

From Persis (P) Legal Aid (she/her) to Everyone:

swapping in for legal aid just for a few minutes

From Daniel (P) Fin Aid Admin - (he/his) to Everyone:

That's the clarity I am looking for as well...

From Jessica (P), Proprietary Schools to Everyone:

+1 David

From Josh (A), Legal Aid (he/him) to Everyone:

I’m back in for legal aid

From Daniel (P) Fin Aid Admin - (he/his) to Everyone:

+1 Greg

From Jeri (P) Student Borrower (she/her) to Everyone:

+ 1 Greg

From Joe; P, State AGs to Everyone:

+1 Greg

From Josh (A), Legal Aid (he/him) to Everyone:

+1 Greg

From Bethany (P) Disability (she/hers) to Everyone:

+1 Greg

From David (P) - State hi ed agencies to Everyone:

+1 Greg

From Joe; P, State AGs to Everyone:

We have updates to aggressive recruitment compiled

from our constituency and other negotiators. I can

forward that now.

Committee Meetings - 11/03/21

From Dixie (P) Dependent Students (ella/she) to

Everyone:

I caution to include that in the language because

there is no outright way for students to prove

reliance. Especially with no guidance from ED. If ED

and the negotiators who want to include reliance could

provide examples and ways for students to prove

reliance and the "knowing" aspect of the text it would

actually be helpful.11:33:19 From Jessica (P),

Proprietary Schools to Everyone:

+1 Daniel

From Joe; P, State AGs to Everyone:

I just distributed a version of aggressive recruitment

to FMCS that covers agents, as David is expressing

From Justin (P) Service Members/Veterans to Everyone:

+1 David

From Jeri (P) Student Borrower (she/her) to Everyone:

+1 David

From Josh (A), Legal Aid (he/him) to Everyone:

+1 David

From Bobby (P) Two Year Public Colleges to Everyone:

+1 David

From Joe; P, State AGs to Everyone:

+1 Greg

From Josh (A), Legal Aid (he/him) to Everyone:

+1 Greg

From Bobby (P) Two Year Public Colleges to Everyone:

+1 Greg

Committee Meetings - 11/03/21

From Jeri (P) Student Borrower (she/her) to Everyone:

+1 Greg

From Dixie (P) Dependent Students (ella/she) to

Everyone:

+1 Greg

From Michale (A) Accreditation to Everyone:

To David's point, ACCSC only allows "employees" to

engage in recruitment activities. No contractors. This

is a huge problem, especially in the recruitment of

international students.

From Jen (she/ella): (A) Student Borrower to Everyone:

+ Greg

From David (P) - State hi ed agencies to Everyone:

Wow, "the pain funnel". That brings back horrible

memories of when I was dealing with these issues while

working in the PA state hi ed department.

From David (P) - State hi ed agencies to Everyone:

+1 Joe

From Bethany (P) Disability (she/hers) to Everyone:

+1 Joe

From Joe; P, State AGs to Everyone:

+1 Jeri

From Josh (A), Legal Aid (he/him) to Everyone:

+1 Joe and Jeri

From Joe; P, State AGs to Everyone:

I have included suggestions from Justin and his

constituency in the version I just sent to FMCS for

Committee Meetings - 11/03/21

distribution

From David (P) - State hi ed agencies to Everyone:

Justin - Do please check the version Joe had sent to

your e-mail. I think it hits on what you're talking

about.

From Justin (P) Service Members/Veterans to Everyone:

Thanks, David. Will do.

From Joe; P, State AGs to Everyone:

We cut some language to account for the situation

Noelia described.

From Joe; P, State AGs to Everyone:

Happy to discuss if helpful.

From Greg, A - Dependent to Everyone:

THAT IS NOT WHAT WE ARE TALKING ABOUT!!

From Greg, A - Dependent to Everyone:

Thank you, Jeri!

From Suzanne Martindale (A) state regulators to

Everyone:

+1 jeri - key terms like "exploiting" fear and taking

"unreasonable" advantage show the distinction

From Dixie (P) Dependent Students (ella/she) to

Everyone:

I'll be in for Dependent Students right now.

From Josh (A), Legal Aid (he/him) to Everyone:

+1 Jeri

From Jen (she/ella): (A) Student Borrower to Everyone:

Committee Meetings - 11/03/21

+Jeri!!

From David (P) - State hi ed agencies to Everyone:

+1 +1 - Absolutely

From Bethany (P) Disability (she/hers) to Everyone:

+ Jeri

From Michaela [P] Ind. Students to Everyone:

From Bobby (P) Two Year Public Colleges to Everyone:

+1 Jeri

From Daniel (P) Fin Aid Admin - (he/his) to Everyone:

I agree with you Jeri, and the concern is to make sure

that the way the regs are written doesn't by accident

include the good actors.

From Jen (she/ella): (A) Student Borrower to Everyone:

+Dixie

From Jeri (P) Student Borrower (she/her) to Everyone:

+1 Dixie

From Michaela [P] Ind. Students to Everyone:

From Bethany (P) Disability (she/hers) to Everyone:

+1 Dixie

From David (P) - State hi ed agencies to Everyone:

Exactly - that is the difference we're trying to hit

at.

From David (P) - State hi ed agencies to Everyone:

Committee Meetings - 11/03/21

+1 Joe

From Dixie (P) Dependent Students (ella/she) to

Everyone:

+1 Joe

From Jessica (P), Proprietary Schools to Everyone:

+1 Joe

From Dixie (P) Dependent Students (ella/she) to

Everyone:

Importance is the consent of students to be contacted

From Jeri (P) Student Borrower (she/her) to Everyone:

and students forced to sit in the audience no mater

what

From Dixie (P) Dependent Students (ella/she) to

Everyone:

From Jeri (P) Student Borrower (she/her) to Everyone:

*matter

From Suzanne Martindale (A) state regulators to

Everyone:

@Daniel, school opportunity to respond with

information can address that

From Justin (P) Service Members/Veterans to Everyone:

In addition to the most recent langauge submitted by

Joe, we'd also offer the following additional

categories of aggressive reruitment:

Providing inducements, including any gratuity,

favor, discount, entertainment, hospitality, loan,

transportation, lodging, meals, or other item having a

Committee Meetings - 11/03/21

monetary value of more than a de minimis amount, to

any individual or entity, or its agents including

third party lead generators or marketing firms other

than salaries paid to employees or fees paid to

contractors in conformity with all applicable laws.

Institutional scholarships or grants, tuition

reductions, and other awards related to a student’s

completion of a program of education are permissible.

(modeled off DOD MOU)

Refrain from providing any commission, bonus, or

other incentive payment based directly or indirectly

on securing enrollments or federal financial aid to

any persons or entities engaged in any student

recruiting or admissions. (modeled off DOD MOU)

From Justin (P) Service Members/Veterans to Everyone:

Our alternate, Emily, will be stepping in to comment.

From Daniel (P) Fin Aid Admin - (he/his) to Everyone:

For example, I would support the second proposal

language -- namely "demanding that the borrower make

enrollment... immediartely".

From Daniel (P) Fin Aid Admin - (he/his) to Everyone:

How about "including but not limited to"... language?

From Justin (P) Service Members/Veterans to Everyone:

+1 Josh

From Suzanne Martindale (A) state regulators to

Everyone:

+1 josh, it's all but impossible to regulate for every

fact pattern

From Daniel (P) Fin Aid Admin - (he/his) to Everyone:

Josh perhaps the language "Without limiting the

Committee Meetings - 11/03/21

general application of the foregoing, the following

conduct is a violation of this section" allows for the

smoke break example?

From Heather (P) - Accrediting Agencies to Everyone:

Option 2 has … include but not limited to … perhaps

that was intended for each of them but was not

included in each one.

From Michaela [P] Ind. Students to Everyone:

Sorry forgot I was already off camera lol