ED Continues Neg Reg Session With Discussions on Federal TRIO Programs, State Authorization, and Cash Management

By Maria Carrasco, NASFAA Staff Reporter

The Department of Education (ED) on Tuesday continued its session of negotiated rulemaking – known as neg reg – touching on multiple issues, including federal TRIO programs, state authorization, and cash management. 

The session began with a presentation from D’Angelo Sands, a negotiator for both the main neg reg committee and federal TRIO programs subcommittee. Sands walked negotiators through the subcommittee’s issue paper, noting key changes they made. 

That includes adding language that expands eligibility for all students who have enrolled in or who seek to enroll in a high school in the United States or its territories to broaden participation of TRIO programs. ED wrote in its issue paper that this will help TRIO programs serve additional students who are already receiving public educational services without requiring additional determinations to enable students to participate. Sands added that this would also eliminate administrative burden for participating schools. 

“We urge the department to provide guidance to TRIO program directors and staff to navigate these changes,” Sands said. “Training and additional resources are essential to equip TRIO program staff with the necessary skills and competencies to effectively serve students while ensuring they are treated with dignity and respect. As we progress forward, we strongly encourage the department to update TRIO regulations to address the current challenges facing our programs and students in the immediate future.” 

Sands also urged the department to update student stipends in the TRIO program to align with current students’ needs. The stipends in the 2008 authorization of the Higher Education Act have not kept pace with the rising costs faced by students, Sands said. Additionally, Sands advocated for the elimination of standardized testing and dropout data requirements in the Upward Bound program. 

Negotiators were all in support of the drafted regulatory text on TRIO programs and reached consensus. 

The negotiators then moved on to discuss the issue of state authorization, which they started on Monday. ED is proposing to expand on current language that stipulates an institution is considered legally authorized by a state if that state requires the institution to comply with any applicable state authorization and licensure requirements. ED proposed to add a condition that the state also require the institution to comply with all applicable state laws and regulations. This language reflects ED’s concerns stated in previous sessions and shared by some negotiators at the table that state authorization reciprocity agreements rob states of some of their oversight abilities. 

Some negotiators had concerns with the term “all applicable” state laws in the language, feeling that ED was overstepping its originally-stated intent by adding the term rather than “education-specific laws.” Scott Dolan, a negotiator representing private nonprofit institutions, said this change was made from ED without an explanation of how this change would potentially increase student protections. 

“I just want to remind the department we started this conversation in January around complaints and governance, and now we are talking about applying all state laws to institutions,” Dolan said. “Most people at this table, if not all, see this as a fundamental negation of what states have done legislatively to try to protect students at better rates.”

Robert Anderson, a negotiator representing state officials, shared a similar sentiment, and warned ED that the proposed language, as written, could leave states and institutions underfunded, under-resourced, overwhelmed, and limit distance education opportunities for students. 

“This is going to blow up the whole process,” Anderson said. “We're going to be back to ground zero. And when you think there’s 21 states that don't have any regulations on these fronts, good luck to those students and good luck to those environments … This is one of those ‘be careful what you ask for.’”

However, some negotiators were in support of adding “all applicable” state laws, rather than “education-specific” laws. Carolyn Fast, a negotiator representing civil rights organizations and consumer advocates, argued that it is a reasonable expectation for an institution to comply with all of a state’s laws where they do business. Further, she said “all applicable” state law is a better term because it provides more widespread protections to students, rather than just “education-specific” state laws. 

“All applicable is, in my view, better because there could be laws, for example related to debt collection, that might fall in some other section of law,” Fast said. “When you say all applicable, that puts the control in the state legislature, who writes the laws and decides where they apply.”

ED returned from a caucus with several constituency groups with alternative language (not reflected in the published issue papers) that would require only institutions enrolling more students than some yet-to-be determined threshold to comply with the language described above, suggesting 500 students as a possibility and asking negotiators if they could support the concept. Multiple negotiators pointed out that the number of 500 students feels arbitrary, and asked the department to explain how it got to that number. However, others felt that 500 students was too high of a number, and should be lowered to better protect students. 

David Musser, deputy director of policy implementation and oversight for ED, told negotiators that the department's main goal with this language is to ensure that states oversee institutions with large presences in their states. Further, Musser said the department is currently analyzing State Authorization Reciprocity Agreement (NC-SARA) data to determine what a statistically appropriate level of enrollment would be for an institution to seek direct state authorization rather than being authorized by a reciprocity agreement. 

ED ultimately decided to move the consensus check on state authorization to either Wednesday or Thursday to give negotiators an opportunity to submit alternative proposals to ED’s regulatory text. 

From there, the negotiators ended the day with a conversation around cash management

Some changes ED added in its draft regulatory text is language that institutions can automatically include books and supplies in institutional charges  only for incarcerated students. For all other students, the department is proposing to require students to opt in to have institutions charge them for their books and supplies. ED added this exemption for incarcerated students after negotiator Zack Goodwin, representing financial aid administrators, pointed out that ED has issued guidance requiring institutions to include books and supplies in tuition and fees charges for incarcerate students, meaning the proposed regulations would have conflicted with existing guidance.

Some negotiators expressed concerns that this additional language could make books and supplies more expensive for students. Gregory Martin, ED’s federal negotiator, said the move was made so the student has to agree to purchase books and materials from the institution, and should not limit institutions from offering books and supplies to students under inclusive access programs. 

“I understand that institutions would like to, for the sake of ease, include this in tuition and fees,” Martin said. “But we believe that there's a compelling need to give the students choice.”

Several negotiators also pointed out that current regulations already address ED’s stated concerns about institutions overcharging students for books and supplies by including them in tuition and fees, noting that ED could simply enforce the current rules that require schools to offer books and supplies at lower than market rate when they choose to automatically charge students for those materials.

Negotiators then revsited proposed regulatory text, largely unchanged since the last session,  banning institutions from retaining any unused cash value meal plan funds. Any remaining balance at the end of the payment period must be returned to the student “as soon as possible” but no later than 14 days after the end of the payment period. 

Some negotiators pointed out that this may cause administrative burden on some institutions and may result in higher meal plan costs for students. Martin said ED believes that the money must be returned to the student. 

“It's the Department's position that where there's cash value, giving that back to the student is the right thing to do even if it does involve some degree of administrative burden on schools,” Martin said. 

The discussion on cash management will continue in Wednesday’s session, along with a conversation on accreditation. Those interested in watching the session can register on ED’s website


Publication Date: 3/6/2024

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