The Regulatory Process: Your Role as a Financial Aid Administrator November 6, 2007

2 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

3 Today’s agenda What are these? How do they work? How can you have an impact? Welcome to 2008

4 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?

5 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 ( )

6 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

7 ED Negotiated Rulemaking Statutory Authorization –Section 492 of the Higher Ed Act –Chapter 1, Code of Federal Regulations Sections , 4 & 5 –Presidential Memo, Sept 30, 1993

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

9 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.

10 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)}

11 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

12 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

13 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

14 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.”

15 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).

16 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.

17 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.

18 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

19 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.

20 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

21 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

Reading and Responding to NPRMS A cure for insomnia, or a hair raising thriller?

23 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.

24 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

25 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.

26 Supplementary information also includes Special requests for information Costs and benefits Clarity of regulations Regulatory flexibility Paperwork reduction act Invitation to comment

27 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

28 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

29 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

30 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

31 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

32 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?

33 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.

34 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?

35 Sending your response Send comments to government web address –Department of Education –Docket ID Number Loans – ED-2007-OPE-0133 –Can view other comments that have been submitted

36 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

37 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

38 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

39 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

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

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

42 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.

43 Questions?