Notices of Proposed Rulemaking

Carol Lindsey – TG, Vice President, Policy and ComplianceJoe Pettibon, Assistant Provost, Texas A&M University

It’s the law!

• The Neg Reg process is mandated by law for changes in Title IV program regulations

• The process is designed to solicit public input, practitioner expertise, and comments from stakeholders in federal rule changes

• This process originates with changes to the law, or issues of concern to ED or the public

Important Neg Reg concepts

• Goal: to develop a Notice of Proposed Rulemaking (NPRM) that reflects a final consensus of the negotiating committee

• Consensus: there must be no dissent by any member on any issue for the committee to reach consensus

The process

• ED holds meetings/hearings to solicit input on issues

• ED proposes topics • ED solicits nominations for non-federal

negotiators and alternates • ED selects non-federal negotiators• ED announces proposed topics, confirmed

negotiators, and meeting schedule

ED Website

• http://www2.ed.gov/policy/highered/reg/hearulemaking/2009/negreg-summerfall.html– Includes a “Team” web page– Includes the NPRM

Organizational protocols

• Safeguards for members– any member may withdraw at any time– all members shall act in good faith– contact with the press is generally limited to

discussion of overall objectives and progress• Meeting facilitation– ED selects third-party facilitators to assist the

committee in meetings and other deliberations

Committee members

• Committees typically involve 12-15 primary negotiators, representing those most likely to be significantly impacted by proposed topics and potential outcomes

• Additionally, alternate negotiators are appointed from same broad stakeholder groups represented by primary negotiators

Committee members – 2009-2010

• Schools/Lenders– 2- year public– 4-year public– Financial aid administrators– Lending community– Private nonprofit– Private for-profit– College presidents– Admissions– Business officers

• Total of 4 negotiators with direct aid experience

• Other interests– Students– Consumers– Accreditors– Workforce development– Test publishers – ATB– State higher education officials

Organizational protocolsDecision making • Consensus– “...there must be NO dissent by ANY member in

order for the committee to be considered to have reached agreement.”

– “members should not block or withhold consensus unless they have serious reservations….”

– “absence will be equivalent to not dissenting”– “all consensus agreements… will be assumed to be

tentative… until members… agree to make them final agreements”

Neg Reg agenda

• Agenda items are chosen on the premise that they can be resolved within the bounds of regulations– Neg Reg does not address items requiring

statutory change – Issues for the agenda ideally are those likely to be

successfully negotiated — that is, that stand a good chance of reaching consensus

The process• Committee approves

membership• Committee approves

protocols • Committee finalizes

agenda topics • ED explains issues and

solicits preliminary input

• Committee reacts • ED provides draft

regulatory language • Negotiations occur• Tentative agreement

may be reached on individual issues

• Negotiations conclude with or without consensus

Rulemaking steps

• ED develops preamble and proposed Regs • ED may share preamble with Neg Reg

committee if consensus reached• NPRM published – submitted to the Federal Register – posted to IFAP – 30-90 day public comment period

Rulemaking steps

• ED reviews comments and may make changes • ED responds to public comments in preamble

of final rules• Final rules published in Federal Register by

November 1 • Final rules become effective, usually July 1 of

the next year

If consensus reached

• ED will use the consensus-based language in the NPRM, UNLESS it reopens the Neg Reg process or provides a written explanation to committee members of the reasons for making changes. If there is a change, committee members may submit comments on the change.

• Negotiators and their organizations WILL REFRAIN from commenting negatively on the proposed rules, but may submit comments on any new considerations or important clarifications.

If consensus not reached

• ED will determine whether or not to proceed with development of proposed regulatory changes

• If regulatory changes are proposed, ED will decide what those changes should be, taking into consideration the interests of the federal government , taxpayers, and other stakeholders

• Public comments and non-federal negotiator priorities and concerns will also be considered in drafting the proposed regulations

The Issues – 2009-2010

• Broad Issues– Ability To Benefit– State Authorization– HS Diploma– Incentive Compensation– Defining a Credit Hour– Agreements between

Institutions– Gainful Employment – Retaking Coursework– Misrepresentation

• Financial Aid Specific– Verification– SAP– Disbursements– R2T4 Attendance– R2T4 Mini-Sessions

Broad issues

• Ability To Benefit– Applies to students without a HS diploma or

equivalent credential– Should these tests be more closely regulated and

monitored• State Authorization– Should schools be eligible for Title IV aid if a state

does not license or otherwise authorize– Should there be minimum standards for state

authorization

Broad issues

• High School Diploma– Should there be minimum standards– In reaction to diploma mills

• Incentive Compensation– Financial aid or admission officers may not be paid

based on securing enrollments– 12 “Safe Harbors” eliminated

Broad issues

• Defining the Credit Hour– Should there be a standard definition

• Agreements Between Institutions– In the case of consortia, should there be a

minimum amount of instruction that must be provided by the credential-granting institution

• Gainful Employment– What is reasonable loan debt in relation to

expected starting salaries

Broad issues

• Retaking Coursework– Credit hour and clock hour programs do not share

uniform requirement• Clock hour > must complete, Credit hour > may retake

• Misrepresentation– Should current regulations be enhanced

Financial aid specific issues

• Verification– Flexibility for ED to identify the data fields to be

verified each year– Changed “base year” to “specified year”– Eliminate the 30% rule– Required to send through all ISIR corrections– Applicant must update all dependency changes

throughout award year

Financial aid specific ssues

• SAP– Introduces standardized terminology• Warning and Probation status

– Place time limits on continued Title IV eligibility• Yearly versus payment period SAP assessments• Warning status only available if SAP is assessed every

payment period

Financial aid specific issues

• Disbursement– Primary focus on the timing of disbursement– Primary concern is the purchase of books for Pell

eligible students– Proposal: Payment of anticipated credit balances

must occur by the seventh day of the payment period (if certain conditions apply)• Or, student must be provided sufficient funds to cover

the purchase of books/supplies

Financial aid specific issues

• R2T4: Attendance– Current regs: If “required to take attendance by an

outside entity” must use attendance records to establish the withdrawal date.

– Proposal: If the institution requires instructors to take attendance, even for just some students or a limited period, the records must be used• Concern:

– Census periods > inconsistent treatment depending on timing

Financial aid specific issues

• R2T4: Mini-Sessions or Modules– Term-based programs with shorter segments – Current guidance: If student completes one

module or session in the term, not a withdrawal– Proposal: If student does not complete all days in

the payment period, IS considered a withdrawal– This would impact term-based schools with

summer mini-sessions on inter-term programs

Tentative agreement

Questions?