Federal and nonfederal negotiators met in Washington D.C. yesterday to begin discussing negotiated rulemaking topics on federal student loans. During introductions negotiators shared expectations and concerns about several new provisions introduced by the College Cost Reduction and Access Act (CCRAA), with most of the comments focusing on the new income-based repayment plan and the public service loan forgiveness program.

The Department divided the agenda items into two separate packages for consideration. The first package of regulatory issues will focus solely on provisions related to the CCRAA. The Department is seeking consensus on this first package.

The second package will focus on federal preemption laws over state laws relating to improper inducements and arrangements between schools and lenders. The Department is not seeking consensus on these issues because it is still "in the information gathering stage," according to the negreg facilitator.

Agenda Items

The following agenda items were identified by the Department prior to yesterday's meeting for negotiation.

• Income-based Repayment Plan (IBR)

• Conforming the Economic Hardship Deferment with IBR

• Public Service Loan Forgiveness

• Definition of Not-for-Profit Holder

• Harmonizing HEROES Waivers with Other Benefits Provided to Returning and Active Duty Military

• Federal Preemption of State Laws Related to improper inducements and arrangements between schools, lenders and other entities in the students loans programs.

Deanne Loonin, from the National Consumer Law Center, asked that the IBR and income contingent repayment (ICR) formula definitions for "reasonable and affordable payments" be made consistent with the rehabilitation formula definitions for students in default. Loonin also asked that collection activity cease for borrowers in default who are already in a rehabilitation program. The Department agreed to discuss "reasonable and affordable payments" as part of the IBR program discussion. However, the Department was not inclined to take up the issue of mandating cessation of collection activity during loan rehabilitations because they believe it is already standard practice to cease collections during that time.

Declined Agenda Items

The following agenda items were brought up by nonfederal negotiators as possible discussion items, but were declined by the Department.

• Raising Aggregate Loan Limits (Specifically for graduate and health professional students) - The Department acknowledged that it does have the authority to increase aggregate loan limits, but does not feel it needs the negreg process to enact those changes. The Department promised to return with an answer about increasing the aggregate loan limits when the committee reconvenes in February.

• Medical Review in Disability Discharge - Loonin advocated for regulatory language that would give clear guidelines - including timelines - to doctors on what exactly is needed for the Department to make a determination on total and permanent disability discharges. Officials from the Department declined to take up this issue in negreg because they feel Congress will more fully develop these procedures during the upcoming HEA reauthorization.

• Lender/Guarantor Participation in Exit Counseling - Larry Zaglaniczny, director of congressional relations at NASFAA, pointed out that the final rules prohibit lenders and guarantors from providing entrance and exit counseling to students. Zaglaniczny asked the Department whether provisions could be drafted to allow lenders or guarantors to provide these services to students while prohibiting any conflicts of interest. The Department responded that it "is not interested in backtracking" to reverse regulations that have just been written and not yet implemented fully to better assess their impacts.

Alternate Negotiators

Additional negotiators were also appointed to the committee by consensus to serve as alternates to primary nonfederal negotiators.

• Larry Zaglaniczny was appointed as an alternate to Anne Gross from NACUBO to represent higher education associations.

• John Curtis was appointed as an alternate to George Chin to represent two and four-year public institutions.

Items Under Consideration

Significant discussion has already taken place on a few of the agenda items. During this first round of negreg negotiators will offer opinions and concerns about each agenda item. The Department will then use their input to draft proposed regulations that will be discussed during later rounds of negreg to be held Feb. 4-6 and Mar. 3-5. NASFAA will provide a comprehensive overview of the discussions of this round of negreg after it has concluded.

Media Coverage

• Lenders, After Losing Subsidy Battle, Face More Hurdles in the Details (The Chronicle of Higher Education) A paid subscription may be required.