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- Don't Expect Revised TPS Guidance Before the Election
Don't Expect Revised TPS Guidance Before the Election
Whether from a change of heart or the clock running out, this guidance is no more
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Let’s get to the point before the context and rationale. The US Department of Education (ED) will not release new third-party servicer (TPS) guidance this year, and I believe ED will not release it next year, either, due to the election. In short, TPS expansion at the federal level is no more.
I gave an abbreviated history in yesterday’s premium post.
It’s late October, and we’ve had no updates. I speculated on this delay in a September post.
This waiting period and lack of clarity is important, as many schools are spending time and money with legal staff doing significant contract reviews in case the TPS expansion comes about.
What We Now Know
There are two new pieces of information on the subject. The first I covered yesterday, about a regional accreditor (Middle States, or MSCHE) proposing their own TPS-style policy changes despite being on the record against ED’s TPS guidance last spring. My hunch from that post:
The second comes from the 2U lawsuit against ED and Secretary Cardona, which I described in early April as worth watching. In a joint status report ordered by the judge in that case, ED on Friday described how revised TPS guidance will not come out this calendar year.
It takes a lot of time and staff hours to review comments and provide responses, and ED should provide an update in the next status report at the end of the year.
What I Think We Know
Moving the earliest possible release into 2025, along with a timeline of not making the new guidance effective for at least six months after issuance, means that any new TPS expansion guidance would hit in the middle of a hotly-contest national election. And TPS is very, very unpopular if you are not receiving Arnold Ventures funding. Importantly, TPS expansion guidance is more specifically unpopular with the higher education community - institutions and associations representing these institutions - that are key to Democrat prospects.
I believe, and I have heard from one reliable source, that ED cannot and will not release TPS expansion guidance in this timeframe, and therefore it is dead next year as well. This guidance will only revive at the federal level in 2025, if the Democrats win the election.
The Arnold Ventures-funded coalition and ED activists understand this situation, which is why I believe they are venue shopping with MSCHE and perhaps other accreditors. Remember the emerging rift that I described in late August.
I won’t do an extended quote on that one, but the point is that activists are worried that student loan debt relief will prevent wins on TPS and other regulatory actions. ED released the final Gainful Employment & Financial Value Transparency rules, so ED did not put everything on the back burner, but I think that Rhee was right - other actions will suffer.
I also believe ED’s statement in the lawsuit about the extensive review of comments. Perhaps there is a faction in ED that truly has been impacted by all of the TPS feedback and is reconsidering the approach. The think tanks and another ED faction appear to still be all-in on TPS expansion and seeking alternate approaches, but someone or some faction seems to be doing serious re-evaluation.
In other words, these changes in plan for TPS expansion are due either to a change of heart from ED leadership, or from the clock running out, or from both.
The right thing to do would be for ED to officially make a public statement on this subject, at least on the information in the lawsuit status report. Colleges and universities need clarity.
Not that any schools would do this, but I am not arguing for colleges and universities to change plans based on this post. My information is solid based on what I know and what I’ve heard from reliable sources, but there is some speculation involved. Push ED for clarity.
The 2U lawsuit has been important in forcing ED to come clean on plans, and I continue to believe that it is worth tracking.
We’ll provide updates as we hear more, including corrections if any the logic is wrong.
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