NAICU Washington Update

Negotiated Rulemaking Committee Begins Work on Multiple Regulatory Fronts

March 07, 2014

The Program Integrity and Improvement Negotiated Rulemaking Committee began its work on February 19, 2014. The negotiated rulemaking is another attempt to update program integrity regulations that has stretched over several years. The first session of this round of negotiations provided an overview of the half-dozen diverse issues for which additional regulations are to be developed. These include state authorization for distance education programs (See Education Department Set to Enforce State Complaint Process Requirements for additional information) and for the foreign locations of U.S. institutions, PLUS loan eligibility, debit card restrictions, the clock to credit hour conversion formula, and aid for repeated course work.

Among this assortment of issues, state authorization is one of the most important to NAICU members. Unfortunately, since most committee members are unfamiliar with the topic, it is hard to predict whether there will be agreement on this matter – or the other myriad issues. A subcommittee, which NAICU staff will work closely with, has been created to address this issue. Ultimately, it is not clear how any new Department of Education regulations would interact with the work now underway to obtain state participation in a national State Authorization Reciprocity Agreement, known as SARA. Additional information about the regulation of distance education and SARA may be found in a recently updated NAICU background paper.

The PLUS loan issue is also of importance to NAICU members and is meant to address a dramatic spike in the number of loan applications that were denied several years ago, causing enrollment havoc at many colleges. The increase in denials occurred during the economic downturn beginning in 2008, and after the Department implemented stricter monitoring of “adverse credit history.” HBCUs, hit particularly hard by the change in credit review, are represented on the committee by Benedict College President David Swinton and Miles College President George French.

The regulation of debit and prepaid cards provoked significant discussion among the committee members. Some of the consumer advocates urged tighter controls and improved services for students. Representatives from various finance and servicing companies urged caution about over-restriction of a rapidly evolving industry. Institutional branding on such cards also provoked debate. One institutional representative saw it as a method for obtaining a better product for their students while others deemed it a “kick-back.”

The conversation around the clock to credit hour conversion formula, and aid for repeated course work was less controversial because the issues seem to have been added to the agenda for conforming changes that are mostly technical in nature. How technical the proposed changes actually are will become more evident once the Department circulates actual language.

Elizabeth Hicks of MIT and Joe Weglarz of Marist College were chosen to represent private, nonprofit colleges on the committee, which will next meet March 26-28 and April 23-25.

For additional information on issues related to state authorization, contact Susan Hattan at 

For additional information on all other regulatory issues, contact Maureen Budetti at

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