MASFAA 2013

October 6th – 9th, 2013

Indianapolis, Indiana

Midwest Association of Student Financial Aid Administrators

Federal Policymaking: Start Your Engines

Presented by:

Nancy MastenGreat Lakes Higher Education Guaranty Corporation

Charles “Buddy” Mayfield University of Illinois

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Federal Policymaking:Start Your Engines

What is Negotiated Rulemaking? What is the process? Who participates? Examples of successful negotiation From bill to regulation

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Statutory Authority

Part of 1998 HEA reauthorization HEA §492 outlines parameters

◊ Secretary shall involve public in developing proposed regulations

◊ All regulations promulgated by the Secretary are subject to negotiated rulemaking• Secretary has authority to conclude such action is impracticable,

unnecessary or contrary to public interest

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Statutory Authority

HEA §492 outlines parameters, cont’d◊ Secretary holds regional meetings to solicit input from

the community on issues to be addressed during negotiations

◊ Negotiators nominated by groups representing students, legal aid organizations, post-secondary schools, guarantors, lenders, secondary markets, servicers, collection agencies• Secretary selects negotiators from list of nominees

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Negotiated Rulemaking Process

Department of Education convenes meetings◊ Teams assembled by topic, for example:

• Teacher preparation (2012)• Student Loans Team (2012)• Gainful Employment (2013)

◊ Facilitated by independent 3rd party◊ Meeting protocols established by federal and non-federal

negotiators ◊ Meetings open to public

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Negotiated Rulemaking Process

Team establishes protocols for ◊ Adding new members◊ Establishing subcommittees◊ Caucusing ◊ Contact with the press◊ Withdrawing from the process◊ Adding Issues to be considered

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Negotiated Rulemaking Process

Schedule typically includes three meetings◊ Meeting 1

• Protocols• Identification of Issues to be negotiated• Issue Review

◊ Meeting 2• Finalize Issues to be negotiated• Draft Regulations

◊ Meeting 3• Final Regulations

More or fewer meetings may be scheduled

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Negotiated Rulemaking Process

Goal – achieve intended public policy while limiting unintended negative consequences and costs

Approach – convene balanced group of stakeholders with expertise and experience to deliberate on issues, interests, and concerns relative to regulation

Outcome – consensus regulatory language for Notice of Proposed Rulemaking (NPRM)

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Negotiated Rulemaking Process

Principles of consensus◊ General agreement or accord◊ Consent versus support◊ Enlightened self interest

Responsibilities of negotiators◊ Voice opinions and concerns◊ Assist with developing solutions to satisfy objectives◊ Consent to livable proposals◊ Block consensus for serious objections◊ Maintain ongoing contact with constituents

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Negotiated Rulemaking Process

Negotiation key to productive meetings Department provides draft language Team reviews and suggests revisions Department revises language to reflect

agreement in concept or provides options Team reviews with goal of achieving consensus Outside activities/meetings occur throughout

◊ Conference calls with federal and non-federal negotiators

◊ Two-way feedback between negotiators and constituency

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Negotiators

Teams consist of primary and alternate negotiators

Primary will participate for purposes of determining consensus (voting)◊ Alternate will participate in absence of primary

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2012 Student Loan Team

Students◊ Getachew Kassa; Abou Amara, Jr.

Legal Assistance to Students◊ Deanne Loonin; Radhika Singh Miller

Consumer Advocacy Organizations

◊ Jennifer Mishory; Maureen Thompson

Financial Aid Administrators◊ Margaret Rodriguez; Elizabeth Hicks

Business Officers and Bursars◊ David Glezerman; Maria Livolsi

Institutional Third-Party Servicers◊ Robert Perrin

State Attorneys General◊ Todd Leatherman; Michele Casey

Two-Year Public Institutions◊ Cristi Millard; Chris Christensen

Four-Year Public Institutions◊ Kris Wright; Elaine Papas-Varas

Private Nonprofit Institutions◊ Yvonne Gutierrez-Sandoval; Jeffrey A. Gall

Private For-Profit Institutions◊ Tom Sakos; Anthony Fragomeni

Guaranty Agencies◊ Betsy Mayotte; Scott Giles

Lenders/Loan Servicers◊ Robert Sandlin; Vicki Shipley

Accrediting Agencies◊ Albert Gray; Sharon Turner

Department of Education◊ Pam Moran; Gail McLarnon

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2013 Gainful Employment

Students◊ Rory O’Sullivan; Kalwis Lo

Legal Assistance to Students◊ Eileen Connor; Whitney Barkley

Consumer Advocacy Organizations

◊ Margaret Reiter; Tom Tarantino

Financial Aid Administrators◊ Kevin Jensen; Rhonda Mohr

State Higher Education Executive Officers

◊ Jack Warner; Sandra Kinney

State Attorneys General/State Officials

◊ Della Justice; Libby DeBlasio

Business and Industry◊ Ted Daywalt; Thomas Kriger

Minority Serving Institutions◊ Helga Greenfield; Ronnie Higgs

Two-Year Public Institutions◊ Richard Heath; Glen Gilbert

Four-Year Public Institutions◊ Barmak Nassirian; Barbara

Hoblitzell

Private Nonprofit Institutions◊ Jenny Rickard; Thomas Dalton

Private For-Profit Institutions◊ Brain Jones; Raymond Testa

Accrediting Agencies◊ Belle Wheelan; Neil Harvison

Department of Education◊ John Kolotos

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Master Calendar Provisions

Outlined in HEA §482(c) Regulatory changes published by November 1

take effect July 1 of the following year (beginning of next award year)◊ If deadline not met, changes not effective until second

award year following November 1 Early implementation may be granted by

Secretary◊ Such changes become effective as determined by the

Secretary (typically on date of publication of Final Rule)◊ Option of impacted party to implement early

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From “Bill” to “Regulation”

Negotiated rulemaking sessions on Student Loan Issues◊ Meetings held between Jan – March 2012

NPRM #1 published – July 17, 2012◊ 30-day comment period – due August 17, 2012

Final Rule published – November 1, 2012

NPRM #2 published – July 29, 2013◊ 30-day comment period – due August 28, 2013

Final Rule expected by November 1, 2013

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2012 Student Loan Team Topics

Package #1:◊ Total and permanent disability◊ Income-driven repayment plans (IBR, Pay As You Earn,

ICR) Package #2:

◊ Repayment disclosures ◊ Minimum loan period◊ Forbearance◊ Closed school discharge◊ Enrollment status reporting◊ Loan rehabilitation◊ Administrative wage garnishment◊ Perkins Loans Issues

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Examples of Successful Negotiation

• Neg Reg 2012 - Package #1◊ Total and permanent disability

Social Security Administration documentation can establish eligibility

ED as single point of contact for processing

◊ Income-driven repayment plans New Pay As You Earn repayment plan Improved notifications to borrowers

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Examples of Successful Negotiation

• Neg Reg 2012 – Package #2 (NPRM)◊ Closed School Discharge

• Would extend timeframe in which borrower can be withdrawn from school prior to the school’s closure date to qualify for discharge (from 90 to 120 days)

• Would include examples of what ED considers exceptional circumstances

◊ Loan rehabilitation• Would standardize what guarantor and ED can consider in

establishing rehabilitation payment amount• Would incorporate IBR-based formula if borrower objects to rehab

agreement provided

◊ Administrative wage garnishment• Would fold in AWG rules into student loan regulations

◊ Perkins cancellation provisions• Would allow borrowers to switch from one cancellation category to

another and receive cancellation at same annual rate

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Federal Policymaking:Start Your Engines

Questions?

Contact Info:

Charles “Buddy” Mayfieldcharlesr@illinois.edu

Nancy Mastennmasten@glhec.org