NASFAA President Dallas Martin Delivers Statement On Negotiated Rulemaking Topics

Today NASFAA President Dallas Martin delivered NASFAA's Statement on Negotiated Rulemaking Topics. Martin called for clearer guidance on issues relating to federal preemption of state laws that conflict with the Department's regulations. Martin also asked that TEACH Grants be added to the agenda for further discussion and provided several questions that need to be answered before it is implemented. Preferred lender lists and entrance and exit counseling with lenders and guarantors are also mentioned. The complete statement is available below.

Statement of The National Association of Student Financial Aid Administrators On Negotiated Rulemaking Topics
Washington, DC
November 16, 2007

On behalf of the more than 3,000 postsecondary educational institutions and others with related interests who are members of the National Association of Student Financial Aid Administrators (NASFAA), we offer the following suggestions for issues that should receive consideration during the Department of Education's upcoming negotiated rulemaking session to implement provisions in the College Cost Reduction and Access Act.

We appreciate the Department's solicitation of agenda items. This process will yield regulations that will help institutions deliver student aid funds to eligible students in a timely manner fulfilling the purpose of negotiated rulemaking: to develop procedures that work in the institutional setting and remain within the statutory boundaries. Further, we hope that the Department will use the negotiated rulemaking structure to ensure that the concerns of all interested parties may be taken into account as these new programs and provisions are implemented.

We offer the following items for your consideration.

In General

One of our most pressing issues relates to federal preemption of State laws that may conflict with the Department's regulations on improper inducements and the use of preferred lender lists in the FFEL program. Clear guidance is essential to proper program administration. In recent months, many states have developed and finalized legislation in these areas. In some cases, state legislation may differ from the Department's regulatory positions. Financial aid administrators must clearly understand the relationship between federal and state statutes. They must clearly understand which statute takes priority. They must understand when they must comply with federal law vs state law.

It is up to the Department to make sure that the regulations on these matters are clear.

TEACH Grants

An unexpected number of questions we have received from our members pertain to implementation of the TEACH Grant provisions. Following our analysis of this section of the law, we offer the following questions:

Will the Free Application for Federal Student Aid (FAFSA) be used as the application or will a different application be used?
Is the GPA requirement a cumulative GPA? When is it measured? If the student meets the test score criteria, is the GPA irrelevant (assuming that the student is making satisfactory academic progress)?
How will a student's intent to complete coursework necessary for teaching be determined, and will any tracking of the student's progress be required?
What does "retiree" mean?
Does a career switcher with an undergraduate degree who is going back to school to get a graduate degree because the school doesn't offer a post-baccalaureate program have to demonstrate current expertise in one of these fields, in addition to planning to teach in one of the fields listed in the law?
Can a student use a "high quality alternative certification route" and seek a graduate degree to become a teacher for the first time? The wording in the law states that the student has to already be a teacher.
Can the eligibility of remedial or noncredit courses be clarified?
Regarding the subject fields in which the student must teach, how does this work for elementary teachers who teach all subjects?
Must the student teach for all 4 years at the same school? The law states "school" not "schools."
Must the student complete all 4 years of the service agreement to retain any of the grant? What if the individual becomes ill or the job is eliminated or the individual cannot complete 4 years for some other reason? Is there no partial earning of grant? Is it possible to extend the 8 years?
Since the law specifies that the grant amount is $4,000 per academic year, will the Title IV academic year be used, as it is for the ACG/SMART program?
Can a recipient who receives grants for undergraduate study subsequently receive grants for graduate study as well? And if so, when does the 8-year period within which service must be completed begin? The wording of the law is "within 8 years after completing the course of study for which the applicant received a TEACH Grant" - are undergraduate and graduate separate programs of study?
If the recipient fails to complete the teaching obligation so that the grant becomes an unsubsidized loan, what happens to loan limits? If the recipient already had borrowed the maximum allowable loan limit how will ED assure that it doesn't appear that the borrower exceeded limits? This would especially be a problem if the recipient got grants as an undergraduate and subsequently wants to go to graduate school.

We believe that more questions on these issues will arise. For these reasons, we believe that all of the TEACH regulations need to be open to negotiation.

Other CCRAA Areas of Concern

Given the feedback we have received, we believe several additional items should be added to the negotiated rulemaking agenda. We urge the Department to add the following topics we raised in the Spring 2007 negotiated rulemaking session on loans and in our response to the NPRM.

We encourage the Department to revisit our request that the Department allow schools that have less than 150 borrowers to have a preferred lender list with fewer than three lenders. In the final regulations, the Department did not add any provision exempting smaller schools from this requirement.
We recommend the regulations be changed to explicitly allow lenders or guaranty agencies to perform entrance and exit counseling with the caveat that a school needs to monitor the counseling to ensure that loan products are not being marketed at that time. The final rules reverse long-standing policy that has allowed such activities which we believe have offered students added value and superior quality thereby ensuring that they are properly informed of all rights and responsibilities.

We appreciate the opportunity to offer these comments and would be happy to provide any clarification that would be helpful. NASFAA may send the Department a supplementary statement if we identify other issues that need to be part of the Negotiated Rulemaking agenda.

Posted 11/16/07 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.