NAICU Washington Update

Massive Regulatory Agenda for Higher Education Announced

June 04, 2021

The Department of Education announced a sweeping regulatory process that will affect many aspects of federal student aid and institutional accountability.  Many of the issues identified to be tackled have been previously addressed in a back and forth cycle of regulatory rewrites that have spanned both the Obama and Trump administrations and the federal courts.  

The negotiated rulemaking committees being proposed by the Department are designed to develop draft regulations on the affordability of postsecondary education, institutional accountability and stability, and federal student loans. The Department is also inviting public input on how it can address, through its Title IV regulations, gaps in postsecondary outcomes such as retention, completion, loan repayment, and student loan default by race, ethnicity, gender, and other key student characteristics. 

The public hearings will be held virtually June 21, 23, and 24, and all written comments must be submitted by July 1.  Institutions that wish to testify at the hearings or submit written comments can register on the Department’s website.  NAICU is scheduled to testify publically and also plans to submit written comments.

The Department is proposing the following topics for consideration:
  • Change of ownership and change in control of institutions of higher education.
  • Certification procedures for participation in Title IV, HEA programs.
  • Standards of administrative capability.
  • Ability to benefit.
  • Borrower defense to repayment.
  • Total and permanent disability discharge.
  • Closed school discharges.
  • Discharges for false certification of student eligibility.
  • Loan repayment plans.
  • The Public Service Loan Forgiveness program.
  • Mandatory pre-dispute arbitration and prohibition of class action lawsuits provisions in institutions’ enrollment agreements.
  • Financial responsibility for participating institutions of higher education.
  • Gainful employment.
  • Pell Grant eligibility for prison education programs.
Many of these areas have substantial policy issues within them.  For example, the issue of financial responsibility standards is likely to go beyond the well-known flaws in the current system and could address such core issues as what systems institutions with less robust financial situations should have in place in the unlikely event of a school closure.

Before conducting a negotiated rulemaking session, it is standard procedure to hold public hearings to inform the Department on either what topics it should consider for a negotiated rulemaking session or obtain a better idea of what stakeholders are thinking regarding the proposed topics by the Department. 

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