NAICU Washington Update

The Regs of Summer

August 11, 2009

Here's a summary of proposed and final regulatory notices that have been published recently.  Some are from the Department of Education and some from other agencies.  Note that, in all cases, if NAICU had a representative on the negotiated rulemaking team, and if a consensus was reached, we are prevented from commenting negatively on the regulation.

Loan Provisions 

The Department of Education published a Notice of Proposed Rule-making (NPRM) July 23 on the Higher Education Opportunity Act loan provisions.  Last spring, a neg reg team reached consensus on the loan provisions affecting lenders and guarantors, constituting the bulk of the NPRM (Federal Register. Vol. 74, No. 140 -.pp. 36555-36602).  Comments are due by August 24.  (NAICU did not have a representative on the team.) 

The Department of Education published an NPRM on loan provisions from the college perspective on July 28 (Federal Register Vol. 74. No. 143, pp. 37432-37494).  This is a very important NPRM because it spells out the sunshine provisions and disclosure requirements.  Comments are due by August 27.  (NAICU did not have a representative on the team.) 

Also in late July, the Federal Reserve System released a final rule amending Regulation Z, which implements the Truth in Lending Act (TILA).  The rule revises disclosure requirements for private education loans, which include certain institutional loans.  Based on recommendations from the negotiating teams mentioned above, some improvements in the draft regulations were made, such as exempting interest-free tuition billing plans of less than a year and emergency loans with terms of 90 days or less.  Certain loans to students who have completed graduate or professional schools would not be excluded, however.  Loan co-branding restrictions will not be applicable to institutional loans or loans of preferred providers.

Identity Theft 

The Federal Trade Commission announced on July 29 that it was once again delaying - until November 1, 2009 - the enforcement of the Red Flags rule.  This rule requires institutions to take certain precautionary steps to prevent identity theft from their communications and data systems.  This delay does not affect other federal agencies' enforcement of the original November 1, 2008, compliance deadline for institutions subject to their oversight.


In early August, the Department of Education published proposed regulations on accreditation (Federal Register, Vol. 74, No. 150, pp. 39498-39533).  The neg-reg team on accreditation was able to reach consensus.  Comments are due by September 8.  (NAICU did have a representative on the team.)

Still to Come . . .

Two more NPRMs will be published in the upcoming weeks - one on the TRIO and GEAR-UP programs, and another on a basket of student aid and institutional compliance directives.  

Neither of these teams addressing these issues were able to achieve consensus, so the department was is able to write the rules as they wished.  The latter NPRM on wide-ranging issues should be reviewed carefully once it's published.  It contains many financial aid and compliance issues of concern to private colleges.

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