News From Washington December 2023

Administration December 2023 PREMIUM

The Biden administration’s efforts with regard to student loan forgiveness face challenges due to issues like fraud management, leading to disapproval by the Supreme Court. Additionally, a significant rise in international students, especially from China and India, raises concerns about the impact on U.S. colleges and students, including financial reliance and potential issues related to diversity, intellectual property, and immigration.

Student Loan Forgiveness – off or on?

For the past two years, millions of Americans with large student debt ($10,000 to over $100,000) owed on federally approved loans, some of them decades ago, have been waiting for the Biden administration to fulfill one of its most vociferous promises: student debt forgiveness. It’s been a roller coaster of proposed generous approval programs that are then subsequently disapproved by Congress and federal courts (mainly due to unconstitutional funding sources). In Spring of 2023, the U.S. Department of Education was poised to approve $430 billion in student debt forgiveness for potentially over 313 million borrowers. But the Supreme Court did not approve. This time because the non-partisan U.S. Government Accounting Office (GAO) found that the DOE has not put in place a process for effective fraud management. The forgiveness grant applications had been approved automatically based on self-reported and undocumented income eligibility statements.  

The GAO had seen this bad movie before. They were suffering rebukes from outraged voters across the political spectrum for allowing billions of dollars of so-called pandemic relief money to be doled out to millions of completely fraudulent applicants – taxpayer money that will unlikely ever be recovered. They did it through an expedited application approval mechanism known as “Pay and Chase.” It “allocates relief with the least burden on borrowers,” Education Department officials told the press.  

In June 2023, the Supreme Court disapproved the DOE program that would have provided up to $20,000 of debt relief to borrowers who met certain income thresholds if they received a Pell Grant in college, and up to $10,000 if they did not. “The Education Department did not deploy any tools to verify borrowers’ incomes or ensure they were eligible for relief,” according to the GAO report issued in November 2023. “Fraud poses a significant threat to the integrity of federal programs and erodes public trust in government. Proactively managing fraud risks can help ensure that taxpayer dollars serve their intended purposes”.  

The Biden administration has a Plan B for 2024. Many Republicans are not generally supportive, saying the programs are unfair to the millions of former students who sacrificed personal goals like marriage and buying a home in order to pay back their student loans. The GAO made three recommendations: incorporate evaluations of fraud risk management before providing relief; implement all stages of its fraud risk management; and ensure there are controls to avoid relying on self-reported data. There are other ways that onerous student loans may be forgiven: they automatically qualify for forgiveness after the borrower has spent 20 or 25 years in repayment; Parent PLUS loans are eligible for forgiveness if the original parent borrower works in a qualifying public service job. In addition, student loan borrowers can include a student loan in some bankruptcy cases under a year-old provision for low-income eligible filers.

Debates over the Presence of 1 Million+ International Students, Mostly from Two Countries

1,095,299 foreign (aka “international”) students were enrolled at U.S. colleges in 2022-23 – an increase of 12 percent, the largest single-year growth in more than four decades, according to the annual Open Doors report by the Institute of International Education and the U.S. Department of State. The majority are graduate students and come from two countries: China and India. Mexico dropped to #12 from #10 of top source countries – the only Hispanic country on the top 15 list. NAFSA -- the Association of International Educators (formerly National Assn of Foreign Student Advisers) announced that the “nearly one million international students generated $40.5 billion into the economy - a figure considered to be high up on the list of top U.S. exports. The students “supported” more than 335,000 jobs”. 

“Our students get the chance to learn about international perspectives from the best and brightest students in the world,” IIE and State Department officials often say.  

What’s not to love about this news? U.S., Colleges have come to rely on the revenue from international students, who often pay the full cost of their tuition. Most undergraduate international students at public colleges -where the vast majority study -pay two to three times more tuition than American students and legal permanent residents. There is usually no waiver for international students as for out-of-state students. They are seen as a critical source of revenue, according to the Council of Graduate Schools. Nine in 10 institutions said they plan to expand their overseas enrollments over the next five years. 630 colleges that responded to the snapshot survey account for 57 percent of all international students on American campuses.

One immigration proposal that has had wide support from both Democrats and Republicans over the past ten years is to grant all international student graduates with advanced degrees in science and engineering (MSs and PhDs) automatic green cards to stay permanently in the U.S. Green cards are the only “visa” that allows the holder to apply for U.S. citizenship; this coveted “pathway to citizenship” would be given to these “best and brightest” students, rather than kicking them out. However, the international student visa was developed on the idea that it is a temporary, limited, non-immigrant visa. It was always seen as a way to help war torn countries’ top students get an education and become personally acquainted with American democracy so that they would be friendly as they climbed the ladders of success in their country – not to drain the brains of other countries and use the sons and daughters of their wealthiest families to support U.S. colleges financially, thus upholding the world’s highest college tuition at every level.  

There are few reports about the impacts of ever-increasing numbers of international students on American students, of the “gaining international perspectives” bit. With the majority of students now from Asia and studying at the graduate level, many international student professionals are concerned that these students cluster in their nationality groups, especially in science labs. And while some undergrad institutions try to keep the undergraduate numbers of international students at around 5 percent of the total student population, graduate programs have more than 50 percent in some engineering programs. There are additional concerns about intellectual property theft and the increasing number of students who overstay their visas, with impunity becoming, some say, the largest source of illegal immigration in the USA today.  

This is all for Congress in various committees, including education, to discuss in detail and piecemeal.


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