The summer has been action-packed with big changes on the presidential election front, influential court decisions, and administration announcements. Congress is returning from a five-week recess to a list of to-do items, the most urgent of which is ensuring continued funding for the federal government. There is consensus that the FY2025 appropriations funding bills will not pass by the September 30 deadline. If that happens, Congress will need to pass a continuing resolution (CR) to keep the government funded.

In this update, we focus on the key policy issues going into the Fall. Among them, stark differences remain between the House and Senate Labor-HHS bills, the funding bills that cover education and workforce programs. The House bill proposes drastic cuts, while the Senate bill includes some increases. Congress will continue its work to reauthorize the Workforce Innovation and Opportunity Act (WIOA). It is also important to note that several Biden Administration rules were implemented over the summer, followed by a series of related lawsuits, many of which are still under consideration. The Supreme Court’s Chevron decision is already impacting several recent regulations and is expected to completely change how legislation is written. We explore each of these issues individually in more detail.

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EDUCATION POLICY

There is a lot going on with education policy. Congress and the Biden Administration continue to raise concerns around the FAFSA, given the confusion and uncertainty both parents and students encountered going into the current school year due to a series of errors by the Department of Education (DoEd) and the recent announcement of a delay this year. Additionally, institutions of higher education continue to work to understand the implications of new requirements for schools to offer “adequate career services” under Title IV of the Higher Education Act to ensure they are compliant with the recently implemented rules. President Biden tried a second time to provide loan relief to students and the new Title IX rules went into effect. Senate Republicans are continuing their investigation into DEI efforts on college campuses with a new Office of Inspector General (OIG) request to investigate the use of funds by institutions to promote DEI ideology on campus.

FAFSA

In early August, Secretary Cardona announced a new timeline for the release of the 2025–26 Free Application for Federal Student Aid (FAFSA). The application will be released as planned on October 1, but only to a limited number of students and institutions that will test the form and provide feedback. They plan to slowly open up the application to more participants and then make it available to all families by December 1.

For the first round of testing that kicks off October 1, the DoEd plans to partner with two to six community-based organizations that “can reach a broad and diverse set of student and contributor populations.” Interested organizations have until September 5 to apply. The organizations that participate will be expected to recruit at least 100 students to attend an in-person event and fill out the application. For subsequent rounds of testing, the department plans to work with high schools that can host FAFSA completion nights and find more colleges that can recruit current students to fill out the form.

The phased approach will allow the DoEd to test the system and address any issues before opening the application up to millions of students. Five higher education associations formally asked the department to push back the release to December 1 to ensure a fully functional form. The DoEd is planning to process completed applications within a few days, send students’ information to colleges, and allow students to make corrections right away. That would be a change from last year, when the DoEd delayed processing until mid-March and students couldn’t correct their applications until April.

Last month, the House Education and the Workforce Committee passed legislation that would have required the department to launch the FAFSA by October 1, but the bill has yet to move forward. Congressional Republicans have expressed their disapproval of the delay and the DoEd’s mismanagement of FAFSA and plan to continue to put pressure on the department to ensure that a working form is available as soon as possible.

Administrative Capability Regulations and Adequate Career Services

On July 1, as part of its regulations around financial aid, the DoEd released regulations that apply to all higher education Title IV participants—including a requirement that schools offer “adequate career services.” On July 10, NACE held a webinar for members featuring Antoinette Flores, deputy assistant secretary for policy, planning, and innovation at the  DoEd. She offered members context and guidance around the new adequate career services regulations, answering member questions in real time and providing written responses. For more information, please see this “DOE Regulations Require ‘Adequate Career Services’ in the Summer 2024 NACE Journal.

Title IX

The Biden administration's new regulations to expand protections under Title IX, including those based on sexual orientation and gender identity as well as additional safeguards for pregnant and postpartum students, went into effect on August 1, 2024. Federal courts in 26 states have issued injunctions preventing the  DoEd from enforcing the new Title IX rules. The lawsuits focus on provisions related to gender identity, which some argue should not be included under the Title IX protections against sex discrimination. The new regulations are in effect in states not covered by injunctions. Some schools in states with injunctions have voluntarily adopted policies compliant with the new 2024 regulations, but they are navigating conflicting legal requirements. The Biden Administration is actively appealing the decisions. We expect further court rulings in the coming months.

Student Loan Debt Relief

On August 28, the Supreme Court turned away a request by the Biden Administration to lift the pause that a federal appeals court imposed on President Biden’s latest student loan debt relief program in a lawsuit by Republican-led states.

New Senate DEI Efforts

Senate Health, Education, Labor, and Pensions Committee Ranking Member Bill Cassidy (R-LA) sent a letter to the OIG requesting an investigation into the use of federal funds by colleges and universities to promote diversity, equity, and inclusion ideology on campus. Senator Cassidy said that Congress must receive a full accounting of how much federal funding is spent by colleges and universities to advance the DEI agenda.

In his letter, Senator Cassidy said that the primary problem with DEI is that it does not promote inclusivity because members of the campus community are forced into groups based on their race and heritage. He believes that the DEI ideology is being used to justify discrimination and acts of intimidation on college campuses.

Senator Cassidy previously wrote an op-ed in the Washington Examiner on the troubling influence of DEI in higher education. He is also an original cosponsor of the Dismantle DEI Act, which would eliminate all federal DEI programs and funding for federal agencies, contractors, organizations, and educational accreditation agencies that receive federal funding and maintain DEI programs. 

WORKFORCE POLICY

On the workforce front, the Senate has been busy working to draft its version of a big workforce reauthorization bill. Several smaller bills of note have also been introduced. On the Administration side, the overtime rule went into effect and the Department of Labor (DOL) is fighting several lawsuits.

Workforce Innovation and Opportunity Act (WIOA) Reauthorization

The Senate HELP Committee held a WIOA hearing in mid-June. Witnesses testified to the importance of postsecondary education and training and noted that WIOA and Pell Grant funding is not keeping pace with the needs of employers, workers, and communities and is not adequate to meet all the promises in the WIOA system. Additionally, the system is not currently designed to meet today’s extensive career navigation, skills development, and worker transition needs as a stand-alone program. 

The committee followed the hearing with a closed-door meeting with stakeholders a few weeks later and a discussion draft intended to gather feedback from the community. The draft makes industry and sector partnerships more prominent and includes a stronger focus on young people with the inclusion of a youth apprenticeship component and greater inclusion of digital skills. Several groups said they saw positive elements in the draft but were concerned by the absence of some provisions that were included in the House-passed version, which could reduce employer engagement.

Senator Tim Kaine (D-VA) introduced the 21st Century Skills Are Key to Individuals’ Life-Long Success (SKILLS) Act, legislation to help more Americans get the skills they need to find jobs in high-demand fields. The bill would make changes to WIOA to expand access to job training programs to a broader set of workers who are underemployed or making low wages and who could benefit from skills training. It would also remove barriers for job seekers who lack transportation, childcare, or the financial resources to cover materials and exam fees.

Another piece of legislation, The Employer-Directed Skills Act, was also introduced recently by Senator Ted Budd (R-NC). The legislation would help businesses streamline the process of assisting job seekers in accessing skills development programs through WIOA. The bill would provide partial reimbursements to employers for the costs of employer-directed skills development programs, establish performance indicators that guarantee trainees are receiving quality training and are set up well for employment, and encourage local workforce development boards to connect with employers that offer employer-directed skills development programs.

Overtime Rule

The DOL’s final rule on overtime pay went into effect on July 1. Workers earning less than $43,888 per year, or $844 per week, are now eligible for overtime premium pay, a bump from the previous level of $684 per week or $35,568 per year. The update to the salary threshold is expected to make 1 million workers newly eligible for overtime pay. Employers are expected to either give workers raises so that they remain exempt or pay the overtime premium.

Right now, employers in states with their own overtime rules likely won’t have to make a drastic change to their payroll and scheduling. There are currently five states that have broader overtime eligibility than what the federal DOL offers, so the law will have little impact on them. Many more employers are expected to have to make changes ahead of the rule’s second phase that is set to take effect January 1. An estimated 3.4 million workers would newly qualify for overtime pay under that change. Once that change goes into effect, only California, Washington, and parts of New York would require overtime coverage that goes beyond the federal law. 

Several lawsuits are currently underway challenging the overtime rule, but only Texas has been able to freeze its implementation and the ruling only applies to employees of that state.

Chevron Implications

Earlier this summer, the Supreme Court ruled 6-3 to overturn the Chevron doctrine, a four-decade-old legal precedent that required judges to uphold federal regulations if a statute is opaque and an agency develops regulations that are a reasonable interpretation of the law. Congress frequently leaves legislative gaps allowing agencies to fill in their interpretation of Congress’ intent, but that will likely change, requiring Congress to step up and include much more detailed instructions in legislation.

The DOL, its subagencies, and the EEOC are currently fighting lawsuits on several regulations. Plaintiffs could get a substantial boost in some cases from the court’s decision. Several actions by the Biden Administration are currently being challenged on the basis that the agencies have exceeded the statutory authority delegated to them by Congress, including student debt relief, Title IX, and the overtime rule.

We will continue to track the education and workforce policy movement over the next several months

LOOKING FORWARD TO THE 2024 ELECTION

Over the summer, we saw major changes in the presidential election. President Biden, the presumptive Democratic nominee, dropped out of the race on July 21, 2024, and the party nominated sitting Vice President Kamala Harris. Both Donald Trump and Kamala Harris announced their running mates, J.D. Vance, U.S. Senator from Ohio, and Tim Walz, governor of Minnesota. In addition to the presidential election, one-third of the U.S. Senate seats and the entire House of Representatives are on the ballot.

Taken together, there is the potential for significant changes.