Summary of Member Comments on Regulatory Reform

By Joan Berkes, Policy & Federal Relations Staff
On June 22, the Department of Education (ED) published a request for comments in the Federal Register soliciting input from the public about regulations that should be repealed, replaced, or modified. Comments were originally due by August 21, 2017, but that deadline has been extended to September 20. NASFAA posted a series of articles in Today’s News requesting member input. This article reports on that input, which includes over 80 responses. Many responses listed more than one area for consideration.
ED’s solicitation is the result of Presidential Executive Order (EO) 13777, which directed the various departments and agencies of the federal government to establish Regulatory Reform Task Forces charged with evaluating existing regulations and making recommendations regarding their repeal, replacement, or modification. The EO provided general guidelines for this assessment. ED released its first report under the EO in May.

Summary of Member Comments

The lion’s share of comments concern the return of Title IV funds (R2T4), particularly the treatment of modules. Members submitted more than twice as many comments on R2T4 than on the nearest competitor for top spot. The second most vexing area are regulations governing limits on subsidized loan eligibility (SULA). Comments regarding loan limits and loan proration ran a close third place. 
Several comments suggested changes to disclosures. A few commenters suggested that Pell Grant calculation formulas should be revisited, and a few others thought the disbursement and payment tables should be collapsed into fewer, broader EFC ranges or enrollment statuses. Only a scant handful of comments came in on verification and only a couple on satisfactory academic progress (SAP).
A number of commenters expressed frustration over duplicative rules to limit duration of Title IV eligibility, and suggested elimination of certain restrictions in favor of others. For example, some commenters questioned the need for SULA when the loan programs already have aggregate limits. Others stated that SAP measures are sufficient limits and other restrictions are unnecessary.
Note that ED has already announced its intention to re-negotiate gainful employment and borrower defense rules, and the comment period on those issues has passed. They are therefore not included in this round of comments.
Do you have an opinion to contribute? You can still submit comments to

Law vs. Regulation

Identification of burdensome or outdated regulations has been an ongoing issue for many years now. Perhaps the greatest difficulty is separating regulatory initiatives from specific statutory imperatives; the following paragraphs provide a little overview to lend context. 
Regulations interpret the law, sometimes incorporating only the minimal statutory requirement and other times exceeding it. Sometimes the law is very specific and leaves little leeway; sometimes it is very general and gives ED broad authority to accomplish overarching goals. Flexible authority is necessary to allow ED to safeguard program integrity and respond to issues as they arise, as long as ED does not overreach. The negotiated rulemaking process should provide balance between effective regulation and burden, but does not always result in a consensus of opinion.
While the regulatory process cannot change statutory directives, regulations can and do implement the law in way that minimizes drafting errors or unintended consequences in the law or, conversely, in way that imposes more burden than might be necessary or cost-effective. This current push for regulatory relief focuses on those areas of regulation that would not require changes to the law. NASFAA must therefore confine its response to those aspects of regulation that are not strictly reflective of requirements in the law. NASFAA’s efforts to improve the law are part of its Reauthorization initiative.
R2T4 is a good example of explicit statutory provisions plus regulatory interpretation. The law creates the concept of earned aid proportional to time enrolled, and the approach taken in the law makes the return of unearned aid independent of institutional refund policy. The law specifies which Title IV programs are included in the calculation. The use of days (or clock hours) in the payment period to calculate the percentage attended and earned is statutory, but the exclusion of certain breaks from the count of days is regulatory. The 60 percent point after which a student is considered to have earned all Title IV aid is set in law, as is the assumed midpoint withdrawal date for students who unofficially drop out of an institution that is not required to take attendance. The authority for the institution to use a documented withdrawal date later than the midpoint is in the law; regulation also permits an earlier documented date. Acceptable documentation is described in regulation. The definition of an institution that is required to take attendance is regulatory. The treatment of modules is regulatory. The principle that a student is entitled to a post-withdrawal disbursement is ED’s interpretation of statutory language and construction.
The SULA limitation is also statutory, but its implementation involves substantial interpretation of the law and has resulted in complex regulations that schools find difficult to explain to students. Commenters also question the need for associated reporting requirements established by ED. More fundamentally, commenters question the need for the statutory limitation itself, given the longstanding annual and aggregate loan limits.
Most of the suggestions on loan limits and proration would require changes to the law before any changes could be made to regulation.
Comments about disclosures, many of which are statutory, touched on their usefulness and relevance. Suggestions included coordinating with other regulatory bodies, such as states and accreditors, to reduce duplication.
NASFAA appreciates all of the responses from members, which will both inform the association’s response to this round of regulatory relief, and support reauthorization efforts.



Publication Date: 8/17/2017

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