The Regulatory Process: Your Role as a Financial Aid Administrator

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The Regulatory ProcessYour Role as a Financial
Aid Administrator

• November 6, 2007

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Todays agenda

• Why is the regulatory process important?
• What are the elements of the process?
• Negotiated Rulemaking (Neg Reg)
• Notices of Proposed rulemaking (NPRMs)
• Final Regulations

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Todays agenda

• What are these?
• How do they work?
• How can you have an impact?
• Welcome to 2008

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Why should you be concerned?

• Best opportunity to have regulations developed
  that you can live with.
• You know what is best for your school and
  students.
• Advance knowledge of changes to expect.
• Professional responsibility
• Who understands financial aid better than
  financial aid administrators?

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The most important reason

• We in America do not have government by the
  majority. We have government by the majority who
  participate.
• Thomas Jefferson
• 3rd president of US (1743 - 1826)

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The basics of the process

• ED identifies laws/problems that need regulation
• Public hearing is conducted
• ED negotiates with public groups
• NPRM is developed
• Public responds
• ED reviews responses, issues final reg

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ED Negotiated Rulemaking

• Statutory Authorization
• Section 492 of the Higher Ed Act
• Chapter 1, Code of Federal Regulations
• Sections 305.82, 4 5
• Presidential Memo, Sept 30, 1993

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Negotiated Rulemaking

• Public involvement in developing proposed
  regulations.
• Opportunity for the community and ED to find
  consensus on issues of concern.

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Goal of Negotiated Rulemaking

• To develop one or more NPRMs that reflect a final
  consensus of the negotiators.
• If the negotiators reach consensus, ED will use
  the consensus language in the NPRMs.

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How it begins

• ED conducts one or more public hearings
• The hearing is important because
• Participants chosen by the Secretary from
  individuals nominated by groups participating in
  the regional meetings , and shall include both
  representatives of such groups from Washington,
  D.C, and industry participants. HEA 1992,
  section 492(b)

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Participants Loans Committee

• US Department of Education
• Students - US Student Assoc
• Legal Assistance Organizations -National Consumer
  Law Center
• Institutions of Higher Education
• Public 2 year- Laramie Comm College
• Public 4 year - Univ of Michigan
• Private 4 year - MIT
• Proprietary - ECPI College of Technology

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Participants Loans Committee

• HEA Title III V UNCF
• FFEL Participants
• Guarantee Agencies - Vermont SAC
• Lenders - Wachovia
• Secondary Markets -Wyoming SLC
• Loan Servicers - Sallie Mae
• GA Servicers - Great Lakes HEGC
• DL Schools - Stonehill College
• Perkins Schools - U of Illinois

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Protocols

• These establish how the Committee will conduct
  the negotiations
• Committee members were expected to negotiate not
  based on their represented constituency, but on
  their experience with Title IV aid programs

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Protocols - Consensus

• ...there must be NO dissent by ANY member in
  order for the committee to be considered to have
  reached agreement.
• Members should not block or withhold consensus
  unless they have serious reservations.
• Absence will be equivalent to not dissenting.
• All consensus agreements will be assumed to be
  tentative until members agree to make them
  final agreements.

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Protocols - Consensus

• If the committee reaches consensus, ED will use
  the consensus language in the NPRMs
• Committee members WILL REFRAIN from commenting
  negativelyunless it has something new to
  contribute (not previously considered or new
  information).

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Protocols - Consensus

• The Department will not alter the consensus based
  language UNLESS it reopens the NegReg process or
  provides a written explanation to the committee
  members.
• If there is a change, committee members may
  comment positively or negatively.

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Carved out sections

• The department can choose to carve out sections
  of the regulations, either taking sections out of
  discussion completely or moving them into a
  separate discussion.

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No consensus?

• ED gets to issue an NPRM with language that it
  wants
• Generally this will reflect the positions that ED
  supported during Neg Reg
• Higher education community and public can
  anticipate what EDs language and arguments will
  be

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No consensus?

• In situations of no consensus, public response
  from the higher education community is especially
  critical.
• Without public response, ED gets to draft the
  regulations so they say what it wants.

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Keeping abreast of whats happening

• NASFAA Todays News
• Committee members and their Associations
• Chronicle of Higher Education, Inside Higher Ed,
  and other media sources
• US Department of Education

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How can you have input?

• Attend a Regional ED Meeting
• Volunteer to be a negotiator
• Provide input to your associations
• Respond to NPRMs when published

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Reading and Responding to NPRMS

• A cure for insomnia,
• or a hair raising thriller?

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What is an NPRM?

• Notice of Proposed Rule Making
• A formal notice to the public by a government
  agency that they intend to create new regulations
  or modify already existing regulations.

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First section The introduction

• Summary - What the Department intends to regulate
  
• Dates - Deadline for responding
• Addresses - Where to send your response
• Further Information - Who to contact

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Next Supplementary Info

• This is the most important part
• Recap of the NegReg process and participants
• Explanation of each major proposal, and reasons
  for it.

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Supplementary information also includes

• Special requests for information
• Costs and benefits
• Clarity of regulations
• Regulatory flexibility
• Paperwork reduction act
• Invitation to comment

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Next - The proposed regulation

• The specific language being proposed
• Review to be sure
• Actual language conforms to the explanation in
  the Supplementary Information, and
• Proposal is clearly written and easily understood

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Master calendar effective dates

• New regulations are effective July 1
• Final regs must be published by November 1 to be
  effective July 1
• If not published by Nov 1, not effective until
  the following year

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Master calendar effective dates

• 45 day implementation permitted on occasion (i.e.
  emergencies)
• Implementation before effective date is permitted
  IF it is deemed to be to the advantage of schools
  AND the Secretary designates the reg as such

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General rules for responding

• Keep it short
• Refer to the section you are commenting on
• Explain who you are, and why you are responding
• Submit by the deadline
• Constructive criticism

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General rules for responding

• Numbers count
• Associations are only one response, no matter how
  big
• Content
• A good, logical argument, backed up with data,
  can make your point

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Your response

• If you agree, say so.
• If others disagree, you want your view to
  prevail
• If you disagree, explain why.
• Is their reason for doing something valid?

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Your response

• Because something add to your workload is
  generally not a good reason to oppose a
  regulation, unless it is especially burdensome.
• It is appropriate to bring workload issues to the
  attention of your school. They may wish to
  respond directly, or through Presidential
  Associations.

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Your response

• If the proposal isnt clear, tell them
• Use examples to explain how your students will be
  impacted
• Are there unintended consequences?
• Are there alternatives that will accomplish the
  same goal with less burden?

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Sending your response

• Send comments to government web address
• www.regulations.gov
• Department of Education
• Docket ID Number
• Loans ED-2007-OPE-0133
• Can view other comments that have been submitted

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Sending your response

• If you believe the regulations create a burden,
  send a copy to OMB
• Send copies to
• NJASFAA, EASFAA, and NASFAA
• your institutions government relations office
• your supervisor

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Handling responses

• ED staff read every comment
• Comments are broken down by the section of the
  regulation that they apply to, and each is
  reviewed
• A response is drafted for each comment or group
  of comments
• The names of responders are not included

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Final regulation

• Almost always issued by November 1
• Remember what we said earlier -
• HEA Master Calendar requirement
• Rule can be suspended in emergency
• Early implementation may be allowed

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Final regulation

• What should you look for?
• Supplementary Information
• Implementation Date
• Analysis of Comments and Changes
• Format will be comments, discussion, and changes
• Discussion will explain EDs rationale for what
  they have done

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2008 Regulatory Process

• CCRAA has several initiatives that will probably
  require negotiated rulemaking.
• TEACH grants
• Loan Cancellation for public employees
• Emancipated minor
• Displaced worker

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2008 Regulatory Process

• ED has announced 3 public hearings in November
• New Orleans
• Washington
• San Diego
• Neg Reg teams will meet in early 2008

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What about HEA Reauthorization?

• Will probably create additional opportunities for
  negotiated rulemaking
• HEPI index
• Sunshine legislation
• Other new initiatives
• Youre prepared now to take part in the
  regulatory process.

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Questions?