NAICU - Negotiated Rulemaking Ends with No Formal Agreement

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Negotiated Rulemaking Ends with No Formal Agreement

NAICU Washington Update

February 10, 2010

After nearly three weeks of negotiations, spread over three months time, negotiators were unable to reach final consensus on a package of new integrity rules for the federal student aid programs.

The outcome was not a surprise, since the prime target of the new rules -- the for-profit sector -- was part of the negotiating team, along with their longtime adversaries such as consumer watch dog groups. The prime impetus for the panel was growing concern by the Department of Education's Inspector General that fraud and abuse could be once again on the rise in the for-profit sector.

Despite the lack of formal consensus on the full 14-issue package, a considerable amount of progress was made on all issues, and actual agreement was reached on nine topics. The Department of Education is free to write whatever proposed regulations it wishes when consensus is not reached. However, tradition dictates the Department will likely adopt most agreements that were reached.

The sessions resulted in important progress on the issues of greatest concern to NAICU -- including the role of states, and the question of how to measure credit hours. The Department is expected to publish its proposed rules around June 1 for public comment.

NAICU had two formal negotiators representing private, non-profit education at the table throughout the lengthy ordeal: Todd Jones, president of the Association of Independent Colleges and Universities of Ohio, and Maureen Budetti, NAICU's director of student aid policy. Other negotiators included representatives from the Department; American Council on Education; public college and workforce sectors; students; accreditors; financial aid administrators; college business officers; and the lending and testing industries.

For more details, visit our page summarizing the background and outcome on the issues of most direct interest tp private colleges and universities.