Department of Education Seeking Nominations for Negotiated Rulemaking on Debit Cards, PLUS Loans, State Authorization, & Other Topics

Prepared by: Wes Huffman (whuffman@wpllc.net)

November 20, 2013

Today, the Department of Education published a notice in the Federal Register seeking nominees to serve on an upcoming negotiated rulemaking panel on “program integrity and improvement” in the Title IV programs. Nominations are due by December 20.  The negotiations are scheduled to take place from February-April of 2014.

In announcing the call for nominations, the Department published a list of topics for negotiation.  The notice indicates the list is subject to change throughout the process.  The list is below:

• Cash management of funds provided under the title IV Federal Student Aid programs, including the use of debit cards and the handling of title IV credit balances.
• State authorization for programs offered through distance education or correspondence education.
• State authorization for foreign locations of institutions located in a State.
• Clock to credit hour conversion.
• The definition of “adverse credit'' for borrowers in the Federal Direct PLUS Loan Program.
• The application of the repeat coursework provisions to graduate and undergraduate programs.

In its initial announcement of plans for negotiations over a year ago, the Department indicated it intended to streamline regulations in the campus-based programs.  However, some streamlining was arguably achieved in a previous round of negotiated rulemaking which aligned Perkins and Direct Loan regulations and the topics above do not make a direct reference to the campus-based programs.

When the Department issues these calls for nominations, they publish a list of constituencies which they expect may be materially impacted by the negotiations.  A list of the potentially impacted constituencies is included below:

• Two-year public institutions of higher education.
• Four-year public institutions of higher education.
• Private, non-profit institutions of higher education.
• Private, for-profit institutions of higher education.
• Regional accrediting agencies.
• National accrediting agencies.
• Specialized accrediting agencies.
• Financial aid administrators at postsecondary institutions.
• Business officers and bursars at postsecondary institutions.
• Admissions officers at postsecondary institutions.
• Institutional third-party servicers who perform functions related to the title IV Federal Student Aid programs (including collection agencies).
• State approval agencies.
• Lenders, community banks, and credit unions.

The Department has been quite active with negotiated rulemaking in recent months.  In addition to this call for nominations, negotiations over the definition of “gainful employment” in the Title IV programs are currently ongoing and negotiations over provisions of the Clery Act and the Violence Against Women Act (VAWA) are in the early stages.