NAICU Washington Update

Neg Reg Finishes Second of Three Rounds

May 03, 2009

The second of three rounds of negotiated rulemaking on the new Higher Education Act concluded on April 23. Each of the three neg-reg phases involves the five committees meeting sequentially over three weeks to help the Department of Education hash out proposed regulations. (For background see the Washington Update articles from February 23 and March 9.)

The second round centered on detailed discussions of the draft regulations the Department developed through the general issue guidance from the first round of negotiations.  Although solid progress was made on scores of legislative and regulatory provisions, it's clear that there could be controversy in the final sessions in May.

The most controversial issue in Round Two was in the accreditation panel.  The Department put forward a proposal requiring accreditors to "regularly collect and analyze key data and performance indicators" for the institutions or programs they accredit."  The HEOA explicitly prohibits regulation of standards dealing with the assessment of student achievement - the result of one of the hardest-fought battles of the reauthorization process - so this proposal raised serious questions of whether the Department is exceeding its regulatory authority.

The panel also spent a great deal of time discussing the Department's procedures for recognizing accreditation agencies.  The direct impact of these procedures are on the accreditors, but past experience has shown that recognition practices have significant "trickle-down" effects on institutions.

The final round of neg-reg began on the April 28 and will run to mid-May.  In their final meeting on TRIO and GEAR-UP, Team IV negotiators couldn't reach consensus, so the Department will now be free to write regulations as they wish (though possibly incorporating the parts of the draft regulations that were agreed upon).  Everyone hopes the Team IV failure won't be a bad omen for the other panels meeting now to May 20.

Once negotiations conclude, the Department will publish the regulations for public comment, and will take those comments into account when developing final regulations.  The goal is to have the final regs published by November 1, 2009, becoming effective July 1, 2010.

Federal Reserve System Regulations

In related regulatory news for the loan teams, draft Federal Reserve System regulations were published for comment on March 24.  (see March 30 Washington Update).  Comments are due by May 26.  It is important for colleges to review these proposed regulations and submit comment as appropriate, given that they define private education loans in a way that could be very burdensome for colleges' administration of their own loans. Please send a copy of any comments submitted to Maureen Budetti at NAICU.


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