It’s the law!

1. Notices of Proposed RulemakingCarol Lindsey – TG, Vice President, Policy and ComplianceJoe Pettibon, Assistant Provost, Texas A&M University

2. 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

3. 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

4. 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

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

6. 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

7. 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

8. 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

9. Organizational protocols Decision 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”

10. 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

11. 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

12. 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

13. 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

14. 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 commentson 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.

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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

26. Tentative agreement

27. Questions?