As noted in yesterday's Today's News article on regulatory reform, NASFAA is seeking help from members to identify regulations that should be recommended to the Department of Education (ED) as in need of repeal, replacement, or modification. Yesterday's article explained the basis of this solicitation and requested input on verification. Today we seek member opinions on regulations governing the return of Title IV funds for students who withdraw (R2T4), and on the Direct Loan Program.
Many issues related to these areas of Title IV administration are statutory in nature; regulations cannot alter law. However, regulations represent ED's interpretations of statutory provisions and impose other requirements it deems necessary to implement the Title IV programs.
Please give your recommendations either as a comment to this article, or in an email to [email protected], with the subject line "R2T4 Reform" or "Direct Loan Reform."
When writing your recommendations, you may want to consider the following:
Current law requires the proportional return of Title IV aid based on the portion of the payment period for which the student remained enrolled, and details several requirements surrounding R2T4. The law differentiates between schools that are required to take attendance versus those that are not. Regulations further interpret and build out the law. Regulations, for example, define what it means to be required to take attendance and last date of academic activity. Regulations define what withdrawal means in nonterm, non-standard term, and modular formats. Regulations set rules for leaves of absence, re-enrollment, and post-withdrawal disbursements, including notification requirements.
The complexity of R2T4 makes it appear perennially among the top compliance exceptions in audits and program reviews. How do you think R2T4 regulations can be simplified and revised to avoid compliance errors?
What troublesome issues do you encounter when trying to determine how much aid must be returned on behalf of a student who withdraws from school before completing a payment period?
How can burden be reduced while protecting reasonably good stewardship of public funds? Are there other, simpler regulations and requirements that are in place or that could be developed to protect the integrity of Title IV funds in the case of students who do not complete a payment period?
The limitation on student eligibility for Stafford loan interest subsidy ("SULA") is statutory, but the interpretation of how that provision must be implemented is regulatory. Are there aspects of those rules that could be improved?
Initial and exit counseling are also a mix of statutory and regulatory requirements, as are disbursement rules. What aspects of those processes are burdensome to students and/or schools? Are there any other rules associated with the Direct Loan Program that could be repealed or improved?
Publication Date: 8/3/2017