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The Regulatory Process:Your Role as a Financial Aid
Administrator
November 6, 2007
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Today’s 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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Today’s 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 RegulationsSections 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 negatively…unless 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 ED’s 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 what’s happening
• NASFAA “Today’s 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 isn’t 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 institution’s 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 ED’s 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
• You’re prepared now to take part in the regulatory process.
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Questions?