By Hugh T. Ferguson, NASFAA Senior Staff Reporter

The second negotiated rulemaking session for the Institutional and Programmatic Eligibility Committee formally kicked off on Monday as members reviewed regulatory language proposed by the Department of Education (ED) for seven different topics, with ability to benefit, and standards of administrative capability dominating the day’s discussion.

Before the negotiators dove into the issue papers at hand, committee members highlighted the issue of transcript withholding when a student has an institutional debt, and the importance of ED using its regulatory authority to address this growing issue.

Johnson Tyler, a negotiator on behalf of the legal assistance organizations that represent students or borrowers, brought up the issue of transcript withholding highlighting a memo he drafted that details the need to curtail the practice. The memo underscored the importance for ED to address the issue through the regulatory process and provides examples and data of how  borrowers of color are adversely impacted by the practice.

Tyler’s comments garnered support from four other committee members, who detailed how transcript withholding is a harmful debt collection practice, and documented how even small amounts of institutional debt can prevent students from completing college when their schools withhold transcripts.

ED told negotiators that the issue of transcript withholding is an issue that they are aware of. Gregory Martin, ED’s negotiator, suggested that the committee dive into that issue when discussing certification procedures, which is scheduled for Wednesday’s session, and committed to having discussion on that topic at that time.

Discussions then turned to the issue papers, beginning with the ability to benefit (ATB) issue paper, which establishes the conditions under which students can be eligible for Title IV aid without a high school degree or equivalent for certain programs.

ED provided a walk-through of definitions that haven’t changed since the last paper, and two newly added accountability standard metrics applicable during the two-year initial approval period for the state process pathway to Title IV eligibility. The first would require a participating institution to have no more than 33% of its undergraduate regular students withdraw from the institution during the institution's latest completed award year. The second would require that student enrollments under the state process option would not exceed 1% of the total enrolled students at any institution participating in the state process.

During the discussion, ED provided the committee members with a number of questions that they’d like feedback on concerning regulation on the ability to benefit regulations, including when ED should withdraw approval for a state process, and how a failing institution could come back into compliance.

For this issue paper, the committee broke down its temperature checks by sections. For the general definitions portion the committee reached a negative temperature check, with one thumb down expressing concern over language related to standards for high school diplomas. The second section on student eligibility and third section, which went into the state process,  recorded positive temperature checks from the committee.

Under the paper’s fourth section, which covered eligible career pathways programs, a number of committee members recorded a negative temperature check.

When the committee reconvened following a lunch break, a committee member urged ED to consider a working group in the coming weeks to further discuss ability to benefit language as well as the questions that ED solicited feedback on.

Per the facilitators, this working group is something that will be discussed with ED, but it was not indicated whether such a meeting will take place.

Negotiators then went into discussion on the Standards of Administrative Capability issue paper, which like the previous issue paper was broken down into a number of sections for negotiators to express their opinions on specific changes to the regulatory language.

In the walk-through of the language, Martin highlighted ED’s regulatory changes touching on requirements for financial aid counseling where ED added language to existing financial aid counseling requirements that the information provided to students be “clear and accurate”. Negotiator Amanda Martinez, representing Civil Rights Organizations, argued for the addition of language that would require financial aid offers to separate grants and loans, include cost of attendance and net price, and include deadlines among other things. Martin noted that much of this is already reflected elsewhere in the regulations and that ED did not want to be redundant. For this section, negotiators reported a negative temperature check with Martinez urging ED to be clearer in its language for the section in order to close barriers and demystify financial aid offers.

Martin then provided a walk-through of changes to proposed language concerning “adequate career services” to students who receive Title IV, HEA program assistance as well as language requiring institutions to provide students with “accessible clinical or externship opportunities” that are related to, and required for completion of the credential or licensure in a recognized occupation within 45 days of the completion of required coursework. Both of these sections resulted in a negative temperature check. Negotiators opposed to the career services language generally agreed with ED’s intent but took issue with vague language, urging ED to move instead toward language that requires institutions to be accountable for the career services they advertise. . The sole member who recorded a negative temperature check related to externship opportunities said that with more research they might be movable to a neutral thumb.

Next up was proposed language seeking to add an institution’s failure to disburse funds to students in a timely manner to the factors that would contribute to a determination of lack of administrative capability. Negotiators expressed concern over ED’s language cross-referencing the cash management regulations, finding that the new language implies the existence of language in the cash management regulations that isn’t there. ED clarified that they intend in this section to expand upon versus reiterate what is required in the cash management regulations. Several negotiators voted thumbs down when a temperature check was taken on this topic.

ED then moved to the next section of the issue paper, which concerned institutions that offer gainful employment programs and requires those schools to receive at least half of their Title IV revenue in their eligible programs from “such programs that are ‘passing’ under subpart Q [Gainful Employment], or has at least half of its regular enrolled students enrolled in such programs that are ‘passing’ under subpart Q.”

In this section, some members said it would be difficult to fully dive into the issue without a broader discussion of the gainful employment paper and ultimately resulted in a negative temperature check.

Negotiators then turned to language concerning misrepresentations and aggressive recruitment, negative action by a state or federal agency or an accrediting agency, and loss of eligibility to participate in another federal program. . In this language, ED is looking to establish a link to administrative capability for institutions that have had findings in those areas. ” Both of these sections recorded a negative temperature check.

During the session’s public comment period speakers touched on a range of issues such as gainful employment, student debt levels, metrics used to predict student outcomes for postsecondary students, and holding institutions accountable for adverse outcomes.

The committee will reconvene on Tuesday by returning to the Standards of Administrative Capability issue paper and will then turn to the gainful employment (GE) issue paper, which will likely dominate the day’s discussion.

Stay tuned to NASFAA’s Today’s News for more coverage of negotiated rulemaking sessions throughout the week, and read up on our previous rulemaking coverage. 

Publication Date: 2/15/2022

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