A New Vision for Serving Student Loan Borrowers

For Sarah, streamlining student loan repayment for easy access to affordable repayment plans is critical. Sarah teaches second grade in Minnesota, and works to ensure that all her students have hope for their futures and “know that the possibilities are endless for them.” After paying her monthly loan balance, she lives paycheck-to-paycheck. Public service loan forgiveness options are available to help make debt more manageable and affordable, but many teachers like Sarah struggle to learn about whether or not they qualify. The Obama Administration knows that families across the country are working hard to pay off their loans. This Administration wants to ensure that students do not have to choose between a job that serves their communities and paying their debt, and that borrowers like Sarah do not struggle to navigate student loan repayment. That’s why the US Department of Education is taking steps to reinvent customer service for federal student loan borrowers to ensure that every borrower has the right to an affordable repayment plan like Pay As You Earn (PAYE), quality customer service, reliable information, and fair treatment as they repay their loans – objectives the President put forward in his Student Aid Bill of Rights.

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Strengthening Accreditation to Protect Students

As I wrote back in February, accreditation plays a critical role in protecting students and taxpayers. Students and families trust that approval from an accrediting agency means that a school or program prepares its graduates for work and life. The federal government also relies on accreditation to affirm that the education provided by that institution or program is a worthy investment of taxpayer dollars.  Unfortunately, in recent years, we’ve seen far too many schools maintain their institutional accreditation even while defrauding and misleading students, providing poor quality education, or closing without recourse for students. This is inexcusable. Accreditation can and must be the mark of quality that the public expects.

That’s why the Department has been working to strengthen the accreditation system. We have published information about accreditors’ standards and the student outcomes at the institutions and programs they have approved. We are taking steps to increase transparency around accreditors’ reviews of institutions and resulting actions. We will soon publish guidance to encourage accreditors to use the flexibility they have in order to target their resources to problematic and poorly performing institutions and programs. And we are increasing our focus on outcomes in our own process of recognizing accreditors.

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Don’t Be Fooled: You Never Have to Pay for Student Loan Help

Cross-posted from Medium.

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I’ve seen online ads claiming that “Obama Wants to Forgive Your Student Loans!” or “Erase Default Statuses in 4–6 Weeks!” The link takes you to companies that want to help you manage your loans — for a fee. You never need to pay for help with your student loans. For the great price of free, the U.S. Department of Education can help you:

Your loan servicer — the company that collects your payments on behalf of the Department of Education can also help you with these goals for free. If you need help with your debt, you should contact your servicer. Click here for a list of servicers’ contact information.

And you should — because you never need to pay for these services.

Some debt relief companies charge a lot. Our research shows that some companies charge upfront consolidation fees as high as $999 or 1 percent of the loan balance (whichever is higher); “enrollment” or “subscription” fees up to $600; or monthly account “maintenance” fees as high as $50 per month. That’s money out of your pocket for services that are available to you for free.

Unfortunately, some companies act unethically or illegally to get your business — misrepresenting themselves as having a relationship with the Department of Education by using our logos, violating students’ privacy by inappropriately using their FSA IDs, and claiming that government programs are their own. In fact, yesterday, the Department sent two of these companies cease and desist letters because they have inappropriately used our logo, giving the impression that they are working with or for the government.

We are taking action to crackdown on these companies and continuing our efforts to protect student borrowers.

Throughout the Obama Administration we’ve worked to ensure student borrowers are protected and have worked across agencies in doing so. For example, the Department of Education has convened an interagency Joint Task Force on the Oversight and Accountability of For-Profit Institutions. The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) have been active in looking at possible deceptive practices in the debt-relief business.

The extent of the problem with debt relief companies is demonstrated by numerous legal actions around the country. In January of 2014, the New York Student Protection Unit issued subpoenas to 13 student debt relief companies as part of an investigation into concerns about potentially misleading advertising, improper fees, and other consumer protection problems in that industry. Over the past two years, the Florida, Illinois and Minnesota Attorneys General all took separate actions against firms found to have misled borrowers. A number of states and our enforcement partners are stepping up to help protect borrowers, but the first line of defense is making sure you know your rights.

We’re making it easier to distinguish between Department sites and private companies’ pages to make sure students and families aren’t mistakenly lured into paying for services available for free. For instance, last year we reached a settlement with a company to obtain a web address it was using — FAFSA.com — to market its for-profit service charging students to fill out the Free Application for Federal Student Aid (FAFSA). This settlement reduced confusion among students and parents who may have thought they were using a federal website rather than a commercial one. We also trademarked many of our forms’ names and taglines.

We are strengthening our internal systems to ensure continued protection of students’ information. For instance, under the new FSA ID, there is a delay for borrowers trying to recover their password to ensure that third-party companies are not inappropriately accessing peoples’ accounts.

Always remember: Keep your FSA ID private and think twice before signing on to pay for a service you can get for free. Sharing your FSA ID puts you at risk.

If you think that you’ve been scammed then learn your options. Many state governments have an Office of Consumer Affairs or Consumer Protection either within or affiliated with, the Office of the state’s Attorney General. At the federal level, the FTC and the CFPB have the authority to act against companies that engage in deceptive or unfair practices. Click on the links to file your complaint with either of those agencies; or you can call the CFPB at 1–855–411–2372.

Ted Mitchell is U.S. Under Secretary of Education.

Critical New Protections for Students, Borrowers, and Taxpayers

This blog originally appeared on Medium.

Protecting students and borrowers has been central to President Obama’s higher education agenda and initiatives since day one. From holding career training programs accountable, ensuring they provide valuable education without drowning students in debt, to ending huge subsidies to banks and reinvesting that money for students, especially the neediest students who rely on Pell Grants — this Administration has made student, borrower, and taxpayer protection a top priority. Today we are announcing the publication of two sets of final regulations that build on these efforts to provide important new protections for students and taxpayers’ investment in higher education.

creditcards

Over the past several years, partnerships between banks and colleges have led schools to market debit and prepaid cards to students, often giving students the impression that their school is endorsing that financial product. Students are likely to trust this endorsement, making them a particularly vulnerable population. These cards are marketed as a way for students to receive their Federal student aid meant to pay for books, rent, and other necessities. Government reports and investigations by consumer groups found that in some cases, students were either strongly urged or given no choice but to sign up for these accounts as a way to receive their financial aid.

The problem with some of these school-bank partnerships is that students who want to use the bank accounts they had before arriving on campus may be forced to take extra steps and experience delays to have the aid disbursed. In some cases, students were required to mail or fax in paper forms or to wait weeks for their refunds. But the bigger problem is that many of these school-endorsed accounts include fees that aren’t clearly disclosed to the student — like overdraft fees or fees for every debit purchase using a PIN — or schools only make funds accessible through a single fee-free ATM meant to serve thousands of students. These fees can add up and be burdensome, especially for college students trying to make ends meet.

studentslaptops

It is critically important to ensure that students can choose freely how to receive their federal student aid refunds. Students need objective, neutral information about their account options; and they should be able to choose to receive deposits to their own bank accounts, rather than being forced to sign up for campus cards with unreasonable fees and obscure account terms. The new regulations ensure that these goals will be met, and students will have the protections they are entitled to.

The final regulations we’re announcing today will protect students against onerous fees, require schools to provide students with the ability to easily access their aid for free, and require schools to disclose the terms of their partnerships with financial institutions.

Today also marks another important milestone in an effort called for by the President in June 2014 to allow five million more student borrowers in the Direct Loan program to cap their student loan payments at 10 percent of their monthly income without regard to when they borrowed their loans. The final rule establishes a new income-driven repayment plan — called the Revised Pay As You Earn (REPAYE) Repayment Plan. In addition to the monthly payment cap, REPAYE will forgive remaining debt after twenty years for those who only borrowed for undergraduate study and twenty-five years for those who borrowed for graduate study. The REPAYE plan will also provide a new interest subsidy benefit to prevent ballooning loan balances for those whose income-driven payments cannot keep up with accruing interest.

The new repayment plan will be available to borrowers starting in December of this year.

Ted Mitchell is U.S. Under Secretary of Education.

Educational Quality through Innovative Partnerships (EQUIP): Expanding Access to High-Quality, Innovative Postsecondary Education

The Obama Administration has made ensuring that all students have access to a high-quality, affordable education a key priority. Last month, we vastly increased the quality of data available and published a new tool to help students and families make more informed decisions when choosing colleges. The Department of Education (ED) also awarded $60 million in First in the World grants to colleges and universities to help them design and test innovative approaches to teaching and supporting students.

I am therefore pleased to announce that ED is now inviting applications for the Educational Quality through Innovative Partnerships (EQUIP) experiment. As part of ED’s experimental sites authority under HEA, EQUIP will accelerate and evaluate innovation through partnerships between colleges and universities and non-traditional providers of education, such as intensive “boot camps” building skills in particular fields, specific programs awarding certificates aligned to employer needs, and Massive Open Online Courses (MOOCs). Eligible programs will lead to a degree or certificate, build students’ transferable academic credits, and provide students with the ever-changing skills they need for today’s economy. The experimental sites authority allows the Secretary to waive certain provisions regarding federal financial aid in order to improve the results achieved with federal student aid dollars.

A critical component of this program will be to increase transparency and generate data regarding the quality of these programs. Participation will require a partnership among a postsecondary institution, one or more non-traditional providers, and a quality assurance entity that will make student outcomes transparent in areas such as learning and employment, and provide tools for ongoing quality improvement. The Department has already begun a conversation about innovation and quality in higher education, through which we have received significant input reaffirming the need for this effort and providing guidance from institutions, providers, student advocates, and other in the field about the best ways to move forward.

We encourage interested colleges and universities, non-traditional providers of education, and potential quality assurance entities to find details about the program in this Federal Register notice. To share your thoughts or to be notified of updates, please email us at innovation@ed.gov.

Ted Mitchell is U.S. Under Secretary of Education.

Guidance for Competency Based Education Experimental Site Released

The Obama Administration has worked steadily to increase access to and completion of high quality degrees for students of all ages and backgrounds. One specific thrust has been to remove barriers that stand in the way of innovation in higher education, including those that prevent promising new educational models from expanding. Competency based education (CBE) is one example of a promising new delivery model with the potential to improve degree completion, reduce costs to students and improve transparency and alignment of learning outcomes to the needs of employers and society. And the field is growing – recently, a survey suggested that as many as 600 postsecondary institutions in the United States are currently designing or implementing CBE programs.

In 2014, the Department of Education launched three experiments under the Experimental Sites Initiative – Competency-Based Education, Limited Direct Assessment, and Prior Learning Assessment – as an opportunity to learn more about this and related delivery model and to experiment with Title IV disbursement models designed to incent student achievement and student success. Among those, the Competency-Based Education experiment provided the most expansive regulatory waivers and modifications, and in the time since that experiment was announced, it has become clear that additional detail and guidance from the Department of Education regarding that experiment would be helpful to both institutions and accrediting agencies.

I am delighted to say that we are ready to release the CBE Experiment Reference Guide for institutions participating in the CBE experiment. We believe that this Guide will offer tremendous support for both experienced and new CBE providers as they implement this experiment. We recognize that many of you were anticipating that the Guide would be released earlier this summer, but it was very important for us to have a high level of confidence that the guidance it contains is on very firm ground. The Guide can be located at https://experimentalsites.ed.gov/exp/guidance.html.

Additionally, by the end of this year, we will be issuing an expansion of the current CBE experiment. The CBE experiment was designed to offer institutions a new approach to financial aid disbursement in the hopes of incentivizing student success and cost reduction. Following the release of the 2014 Federal Register notice, we received additional feedback from institutions about the approach provided in the 2014 notice, and we have been working to respond to this feedback. When the expansion is released, we are confident that this experiment will be even more useful to the field, particularly to institutions using a subscription-based tuition model with their CBE programs. As part of the experimental site initiative, ED will be gathering significant data from the participating institutions to enable a rigorous evaluation of the impact of CBE programs on issues of completion, affordability and transparency of degrees.

As always, I encourage and welcome your comments, suggestions and feedback. We are eager to learn from these CBE experiments, and we remain committed to responsible innovation to enhance learning outcomes, lower cost and improve completion rates in higher education.

Ted Mitchell is U.S. Under Secretary of Education.

Investing in Higher Education Innovation

As I have written previously, much is changing in higher education.  Student demographics have shifted significantly, as have the demands of a fast-evolving workforce.  Technology, powerful insights from brain science, and research on teaching and learning are creating vast new possibilities.

In order to build our economy and our democracy, we must invest in the kinds of evidence-based innovations that expand access, affordability, and success to communities that are not currently well served, such as students who would be the first in their families to go to college, those from low-income families, and students of color.

This is exactly what our First in the World (FITW) grant program seeks to do.

Today the Department of Education is awarding nearly $60 million in FITW grants to 17 colleges, universities, and organizations.

This year’s highly competitive applicant pool demonstrated the innovation and creativity flourishing at all kinds of institutions.  Grants will fund projects with a range of goals and approaches, including proactive advising and support services guided by predictive analytics, redesign of online gateway courses to increase student engagement, integration of adaptive learning software into a short-term bridge program, and open source developmental courses delivered through mobile learning apps. Read a few examples of these terrific projects and a list of all of this year’s recipients.

I’m especially pleased that nine of the 17 winning applications came from minority serving institutions (MSIs), three of which are also Historically Black Colleges and Universities (HBCUs).  These MSIs and HBCUs will receive a total of over $30 million in funding.  I was also pleased to see proposals from strong and broad collaborations: we simply cannot achieve the impact we need with every campus acting alone.

I only wish we were able to fund many more of the high quality applications we received. And in fact, while the President’s FY2016 budget requested $200 million for FITW, Congressional budget proposals have zeroed out the program. Without a change to those budget proposals, we will not be able fund these critical innovations going forward.

Congratulations to the recipients of this year’s grants, and our deepest thanks to them and to all the FITW applicants for their leadership and their commitment to the success of all our nation’s students.

Ted Mitchell is U.S. Under Secretary of Education

Innovation and Quality in Higher Education

Much is changing in higher education.

Most fundamentally, students themselves are changing. After long decades of exclusion, college access has expanded opportunities for minority students, first-generation students, and low-income students. In 2015, students are more likely to attend community college than any other postsecondary option, and more likely to be older, living away from campus, and may be attending part-time while balancing work and family.


The iconic picture of an 18-year-old high school graduate walking across a leafy campus toward her dorm room no longer reflects the reality of today’s college student.


Institutions of higher education are responding to these changes, in part by making course delivery more flexible. Technology has made this even more possible, introducing teaching and learning that is less constrained by time and place. Technology is also making new kinds of embedded assessment and adaptive curriculum possible, allowing instructors and students to discern with greater accuracy a student’s mastery of material or skills.

The demand for higher education is increasing, well beyond the capacity of traditional institutions. It’s easy to see why. As President Obama has said, the time when a high school diploma could lead to a good middle class job is gone. In today’s economy and tomorrow’s, some kind of postsecondary degree or credential is essential. That’s why we are committed to policies that increase access to high-quality programs, to keeping those programs affordable for all, and to ensuring quality outcomes for students.

Outside of the traditional colleges and universities, a vibrant marketplace for learning is emerging, whether through stand-alone MOOCS, “boot camps” that focus on training students for particular skills like computer coding, online skills courses, and institutional experimentation with competency-based programs and degrees. We applaud this wave of innovation and believe that the innovators are leading the way to a system of higher education that is more open, often less costly, more customizable to the needs of students, and more transparent in terms of its outcomes.

Many of the programs now offered outside of traditional higher education are of high quality and many earn learners access to new knowledge, new skills, and new opportunities. Some, however, are not. That’s not the problem, though. The problem is that we have few tools to differentiate the high-quality programs from the poor-quality ones. The normal mechanism we use to assess quality in higher education, accreditation, was not built to assess these kinds of providers. Moreover, even if they were, even the best programs and those serving low-income students would not, under current rules, be certified to receive federal financial aid because they are “programs” or “courses,” and not “institutions.”

The U.S. Department of Education (ED) is interested in accelerating and focusing the ongoing conversations about what quality assurance might look like in the era of rapidly expanding educational options that are not traditional institutions of higher education. We are particularly interested in thinking about quality assurance through the lens of measurable student outcomes and competencies. We have no stake in supporting one or another specific set of learning outcomes. Rather, we are interested in the fact that outcomes matter and ought to be the centerpiece of any kind of quality assurance. Outcomes, in this vision of the future, are clear claims for student learning, move beyond mere statements of knowledge to what students can do with that knowledge, and are measurable.

Join a Conversation

Over the coming weeks and months, we seek to engage broadly with the field to help deepen our understanding of how to recognize high-quality non-traditional programs. We think that a new set of quality assurance questions will need to be developed to ask hard, important questions about student learning and outcomes. These questions will help students, taxpayers, and those evaluating educational programs separate programs that are high-quality from those that do not meet the bar. Such a quality assurance process will rely much less on inputs, where the emphasis of much accreditation still rests, and will instead focus on outputs and evidence.

Based on some preliminary input we have received, we have identified several general categories in which questions should be asked:

  • Claims: What are the measurable claims that a provider is making about student learning?  Do those individual claims combine into a coherent program of study?  Are they relevant and do they have value; how do we know?
  • Assessments: How is it clear that the student has achieved the learning outcomes?  Are the assessments reliable and valid? Do the assessments measure what students can do with what they have learned?
  • Outcomes: What outcomes do program completers achieve, both in terms of academic transfer or employment and salary, where relevant?  What are other outcomes we should ask about?

These quality assurance questions are designed to focus on student learning and other critical outcomes at a much more granular level. We welcome feedback and sustained dialogue on how to foster and improve quality assurance, particularly in this moment of tremendous innovation and change. We seek to convene, participate in, and hear the results of many conversations with diverse stakeholders.  To join those conversations, please fill out the form below, or send us your thoughts, questions, and ideas for engagement at collegefeedback@ed.gov.

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Ted Mitchell is U.S. Under Secretary of Education

New Measures to Combat Sexual Violence

College campuses should be safe places where all students are free to focus on the joy of learning, forge lasting friendships, and explore the interests that lead to lifelong callings and careers. Even one sexual assault at our nation’s colleges and universities is too many.

This is an issue of great concern for President Obama, Vice President Biden, and all of us at the Department of Education. In hearing from many dedicated men and women from across the postsecondary and law enforcement communities — from college presidents, trustees, deans, and student affairs professionals, to attorneys and campus security staff, to student advocates, we know that many of you are devoting significant efforts to ending this threat because you are deeply committed to the health and wellbeing of our students and communities.

These cases are often difficult, complex, and emotionally harrowing. And we recognize that the problem of sexual violence doesn’t begin on college campuses, nor is it isolated to them. As we work to keep college students safe, we must also work more broadly, as partners – across the education pipeline, and throughout society – to address the issue, including by identifying and disseminating promising practices.

There’s no “one-size-fits-all” method to tackling this challenge, and our Department supports a variety of approaches. In addition, there are many different types of campuses and institutions. Some serve 800 students, others serve 80,000. Some have residential communities, some are exclusively commuter campuses.

In 2014, the President established the White House Task Force to Protect Students from Sexual Assault, co-chaired by the Office of the Vice President and the White House Council on Women and Girls. The Task Force recommendations have led to:

  • The creation of the NotAlone.gov website for students and schools to access resources on responding to and preventing sexual violence;
  • The compilation of effective training materials for students and for school, health center and victim services staff;
  • A sample memorandum of understanding between higher education institutions and law enforcement agencies; and
  • The clarification of schools’ reporting obligations under all the applicable laws.

As an agency, we’ve worked to improve the coordination of our enforcement efforts. Our Office for Civil Rights (OCR), in particular, has taken steps to:

  • Issue policy guidance on schools’ obligations under Title IX to prevent and address sexual violence;
  • Provide resources and technical assistance, through our headquarters and regional offices, to inform school officials, parents, students, and others of their rights and responsibilities under the law;
  • Engage in more robust enforcement of Title IX through our complaint and investigation process;
  • Improve coordination between our Federal Student Aid office and OCR for Clery and Title IX compliance; and
  • Increase transparency by posting resolution letters and agreements with recipients on our website and NotAlone.gov, and by making public, for the first time, a list of colleges and universities under OCR investigation for their handling of sexual violence complaints.

And, today, July 1, 2015, final regulations take effect implementing the changes made to the Clery Act by the Violence Against Women Reauthorization Act of 2013. These new regulations reflect extensive public comment and the consensus of a broad-based negotiated rulemaking committee.

We will soon be sharing additional information with the higher education field to support implementation, including a summary of the final regulations. We are in the process of updating the Handbook for Campus Safety and Security Reporting, reflecting the new requirements, and we will be reaching out to the field for help with the revisions. To help address questions about the final regulations, we will provide support and hold other public opportunities to assist the field.

The final regulations:

  • Increase transparency by adding dating violence, domestic violence, and stalking to the list of crimes about which an institution must disclose statistics to the public, its campus community and the Department; and
  • Require institutions to make enhanced disclosures regarding disciplinary proceedings used to resolve allegations concerning these crimes, protective measures provided by the institution following an allegation of these crimes, and the training programs in place to better inform its campus community about awareness and prevention.

In the months ahead, the Department will continue working with institutions, states, advocates and other higher education stakeholders to expand our shared knowledge, identify best practices and prevention models, and increase our capacity to combat sexual violence.

Maintaining our students’ health, safety and wellbeing is our greatest trust, and we’ll continue to make it our highest priority.

Ted Mitchell is U.S. Under Secretary of Education

Debt Relief for Corinthian Colleges Students

Too many of America’s large “career colleges” are failing to live up to the name. Rather than providing students with the opportunity for a solid education that leads to a good job, some of these institutions — often run by for-profit companies — have left students with lots of debt and few job prospects, putting both students and taxpayers at risk. This Administration is committed to changing that, through action to hold institutions accountable and to ensure Americans are protected from unscrupulous colleges that deny students meaningful educational opportunities and leave taxpayers holding the bag.

Over the past six years, the Department of Education has taken unprecedented actions to establish tougher regulations to prevent misleading claims by career colleges. The Department also issued “gainful employment” regulations, which will help ensure that students at career colleges don’t end up with debt they cannot repay. This Department has also cracked down on bad actors through investigations and enforcement to hold colleges accountable in order to improving the value of their programs, protect students from abusive colleges, and safeguard the interests of taxpayers.

College remains the best investment students can make in their future – and students deserve a fair and honest deal. And some for-profit career colleges play a critical role in helping students succeed in their educational and training pursuits. However, when unscrupulous companies take advantage of students, federal and state agencies must step in, and Congress must support those efforts.

Secretary Duncan has directed our team to ensure that students who have been defrauded by their college, or because their school closed down, receive every penny of the debt relief they are entitled to, as efficiently and easily as possible. That need has grown pressing in recent months because of the wind down and ultimate collapse of Corinthian Colleges Inc. (known under the brand names Heald, WyoTech and Everest), following enforcement actions by this Administration and scrutiny by other enforcement entities. Today, our Department is announcing next steps to support students who attended Corinthian schools. We are also committed to ensuring accountability and to continue working aggressively toward reforms that ensure that schools are held responsible for their actions.

How debt relief will work for Corinthian students

Our team has been at work to develop a streamlined process for getting debt relief to Corinthian students. Our aim is to make the process of forgiving loans fair, clear and efficient.

Some Corinthian schools closed down, while others were sold but remain open. We are establishing plans to ensure debt relief for:

  • Students whose schools have closed down
  • Students who believe they were victims of fraud, whether their school closed or not

These processes are described in our fact sheet and are summarized here.

Information for students

If you are a Corinthian student seeking debt relief of either type, please visit the FSA website or call toll-free at (855) 279-6207 and a staff member will provide the information you need.

For Corinthian students whose schools closed

Students who were enrolled at Corinthian schools that closed can now choose between discharging their student loans (called a “closed school discharge”) and transferring their credits to another school. We are reaching out to the affected students and providing clear information and loan discharge applications on the FSA website.

Normally, only students who withdrew (without completing their programs) within 120 days of a school’s closing, or who were attending the school when it closed, may receive a closed school discharge. Today, we are announcing that the Secretary is exercising his discretionary authority to extend that time frame to include students who withdrew from one of the closed schools on or after June 20, 2014. That is the date when Corinthian signed an agreement with the Department to close or sell all its schools.

If they believe they were defrauded, students whose schools closed may opt for debt relief under borrower defense, as described below, rather than closed-school loan discharge.

For those who need help with closed-school debt relief, the Department is working with an independent group of organizations and institutions, including the California State University System, the California Community College System, Beyond 12, and financial aid counselors, who have teamed up to create a volunteer advisor corps to help Corinthian students navigate their options. Contact them at NextStepsEDU.org to talk to a volunteer advisor. The Department did not create this corps and there may be other organizations that are available to help students. We encourage all students to investigate the best available avenues for assistance.

For former Corinthian students who would like to seek debt relief because of fraud, including Heald College students

Borrowers can make a claim for debt relief because of fraud under a legal rule called “borrower defense to repayment.” This rule requires students to show that they were defrauded by their college under a state’s laws, and we are committed to working with students to make that the simplest, fastest process possible.

In order to ensure that students do not fall behind on payments or default on their loans before claims can be resolved, we will offer all applicants for debt relief the option to go into loan forbearance (a special permission to stop payments), and for students in default, to halt collection activity.

In order to promote efficiency in the resolution of claims and to minimize the burden on students, wherever possible, we will work to use legal findings applicable to groups of students (for example, an entire academic program at a specific campus) to resolve students’ claims. As a first step, in this particular case, the Department has already established that Corinthian misrepresented job placement rates for a majority of programs at its Heald College campuses between 2010 and 2014. Today, we are announcing that these serious findings entitle the defrauded students enrolled in these programs to a discharge of their Federal Direct Student loans, based on a simple attestation that they relied on those fraudulent rates. And we are providing a simple form that will allow students to quickly give us the information we need to give them debt relief.

Going forward, the Department will appoint a special master to oversee borrower defense issues and charge that person with ensuring our process is clear and fair, including a simple, streamlined application for debt relief.

Holding Institutions Accountable

America’s students deserve protection against unscrupulous companies that leave students deep in debt, and with few prospects for employment. Our Administration has taken and will continue to take aggressive steps to protect students and to hold schools accountable, including:

  • Establishing new student aid rules to protect students and taxpayers, to ensure students receive an education that leads to good job prospects.
  • Strengthening oversight and compliance through inter-agency and Department teams focused on monitoring for-profit institutions.
  • Creating options that make student debt more manageable for borrowers, through flexible repayment options such as the Pay As You Earn plan, which caps student loan payments at 10 percent of a borrower’s discretionary income
  • Protecting military service members, veterans and their families from predatory actions by for-profit colleges
  • Providing families with clear information to make a smart college choice, by providing a wealth of consumer tools designed to help students and families decide which college is right for them

It is impossible not to be moved by the stories of students whose futures were damaged by the institutions they once believed were setting them on a path to a better life. These processes will offer them real and badly needed help. Loan forgiveness can’t give students back the time they invested at Corinthian. But it will help them make a fresh start.

Ted Mitchell is U.S. Under Secretary of Education.

Supporting Innovation in Higher Education through First in the World

The Obama Administration is committed to ensuring that all students have the opportunity to access and complete a postsecondary education. In an era of rapid change and innovation, we have sought to encourage those colleges and universities developing new ways to serve students better, especially low-income and first-generation students.

That’s why I’m thrilled that we’ve announced the second round of the First in the World grant program. This year we will award $60 million to colleges and universities to encourage innovative new practices on campuses, including $16 million to Minority Serving Institutions.

Applying for a grant

For the first time this year, the First in the World program will have two tiers: a “development” tier for innovative projects that are supported by “strong theory” (defined in the grant announcement) and larger grants in the “validation” tier will be awarded to applications for interventions supported by significant evidence. Since a key goal of the FITW program is building an evidence base, all funded grants will include rigorous evaluation.

In the development tier, projects will be funded in three areas (with specific descriptions in the announcement):

  1. Improving teaching and learning
  2. Developing and using assessments of student learning
  3. Facilitating pathways to credentialing and transfer

In the validation tier, projects will be funded in these four areas:

  1. Improving success in developmental education
  2. Improving teaching and learning
  3. Improving student support services
  4. Influencing the development of non-cognitive factors

We seek proposals from institutions of higher education, including those that partner with other institutions or organizations. Visit the FITW website for links to the announcements, application information, and webinar details.

Call for peer reviewers

Peer reviewers, not ED staff, review and rate all FITW proposals – they play a critical role! So we need strong, knowledgeable, innovation-minded peer reviewers. If your institution is not applying for a grant, please consider applying, or encourage colleagues with the requisite skills to apply. Information can be found on the FITW website.

Building on success

The Department is excited that by the fall, we will have awarded more than $135 million to support innovation in higher education in the last two years. All of the 24 grants from the 2014 competition are underway. Some examples include:

  • Gateway Community and Technical College (KY) is redesigning programs to encourage students to progress more quickly through college, including by redesigning remediation and classroom spaces.
  • Hampton University (VA) is redesigning many courses, including through the use of project-based learning and the incorporation of technological tools (such as the Khan Academy) into courses.
  • Southern New Hampshire University is developing an online competency-based program to wholly reimagine remediation. It will include modules, assessments, practice opportunities, and games that could be embedded within a student’s academic program.

We are mindful that a key role of the U.S. Department of Education is encouraging innovation, including through funding, regulatory flexibilities, and celebrating best practices. In the FITW program, we look forward to supporting the most innovative new thinking to support first-generation and low-income students.

Ted Mitchell is the Under Secretary of Education.