The Regulatory Process: Your Role as a Financial Aid Administrator

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The Regulatory ProcessYour Role as a Financial
Aid Administrator

• NYSFAAA Conference
• October 23, 2008

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Todays agenda

• Why is the regulatory process important?
• What are the elements of the process?
• How do these work?
• How can you have an impact?

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Why should you be concerned?

• Best opportunity for regs you can live with.
• Advance knowledge of changes to expect.
• Professional responsibility
• Who understands financial aid better than
  financial aid administrators?
• Hierarchy of legal jurisdictions
• statute, regs, sub regulatory guidance.
• Regs trump student aid handbook, DCL, finaid-l
• If statute policy, then regs procedures

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The most important reason

• We in America do not have government by the
  majority. We have government by the majority who
  participate.
• Thomas Jefferson
• 3rd president of US (1743 - 1826)

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The basics of the process

• ED identifies new laws or problems that need
  regulation
• Public hearing is conducted
• ED negotiates with public groups
• NPRM is developed
• Public responds
• ED reviews responses, issues final reg

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ED Negotiated Rulemaking

• Public involvement in developing proposed
  regulations.
• Opportunity for the community and ED to find
  consensus on issues of concern.
• Statutory Authorization
• Section 492 of the Higher Ed Act
• Chapter 1, Code of Federal Regulations
• Sections 305.82, 4 5
• Presidential Memo, Sept 30, 1993

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Goal of Negotiated Rulemaking

• To develop one or more NPRMs that reflect a final
  consensus of the negotiators.
• If the negotiators reach consensus, ED will use
  the consensus language in the NPRMs.

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How it begins

• Dept of Ed announces public hearings
• ED.gov 8/23/08 notice for HEOA 2008
• 4 hearings, 9/19 to 10/8
• The hearings are important because
• The Dept. obtains advice and recommendations from
  the public that will be affected by the
  regulations.
• Written advice/recommendations also usually
  accepted.

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Selecting Participants

• Dept of Ed solicits nominees from affected
  groups.
• Request for nominations is usually included in
  same announcement as public hearings.
• Typically 12 to 15 negotiators are selected.
  Alternate for each negotiator is also selected.

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Participants 2008 Loans Committee

• US Department of Education
• Students - US Student Assoc
• Legal Assistance Organizations -National Consumer
  Law Center
• Institutions of Higher Education
• Public 2 year- Laramie Comm College
• Public 4 year - Univ of Michigan
• Private 4 year - MIT
• Proprietary - ECPI College of Technology

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Participants 2008 Loans Committee

• HEA Title III V UNCF
• FFEL Participants
• Guarantee Agencies - Vermont SAC
• Lenders - Wachovia
• Secondary Markets -Wyoming SLC
• Loan Servicers - Sallie Mae
• GA Servicers - Great Lakes HEGC
• DL Schools - Stonehill College
• Perkins Schools - U of Illinois

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Protocols

• An independent facilitator helps guide the
  negotiations
• The agenda and protocols are the first order of
  business. These establish how the negotiations
  will be conducted.
• Committee members are expected to represent the
  interests of the entire constituency they
  represent, and to consult with other members of
  the constituency.

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Consensus

• Consensus is the key to negotiations!!
• ...there must be NO dissent by ANY member in
  order for the committee to be considered to have
  reached agreement.
• Members should not block or withhold consensus
  unless they have serious reservations.
• Absence will be equivalent to not dissenting.
• If the committee reaches consensus, ED will use
  the consensus language in the NPRMs.

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No consensus?

• Dept of Ed gets to issue an NPRM with language
  that it wants
• Generally this will reflect the positions that
  the Dept supported during NegReg
• Higher education community and public can
  anticipate what the Depts language and arguments
  will be

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No consensus?

• In situations of no consensus, public response
  from the higher education community is especially
  critical.
• Without public response, ED gets to draft the
  regulations so they say what it wants.

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Keeping abreast of whats happening

• NASFAA Todays News
• Committee members and their Associations
• Chronicle of Higher Education, Inside Higher Ed,
  and other media sources
• US Department of Education ED.GOV
  website

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How can you have input?

• Attend a Regional ED Meeting
• Submit written advice/recommendations
• Volunteer to be a negotiator
• Provide input to your committee representative
• Respond to NPRMs when published

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Reading and Responding to NPRMS

• A cure for insomnia,
• or a hair raising thriller?

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What is an NPRM?

• Notice of Proposed Rule Making
• A formal notice to the public by a government
  agency that they intend to create new regulations
  or modify already existing regulations.

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First section The introduction

• Summary - What the Department intends to regulate
  
• Dates - Deadline for responding
• Addresses - Where to send your response
• Further Information - Who to contact

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Next Supplementary Info

• This is the most important part
• Recap of the NegReg process and participants
• Explanation of each major proposal, and reasons
  for it.

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Supplementary information also includes

• Special requests for information
• Costs and benefits
• Clarity of regulations
• Regulatory flexibility
• Paperwork reduction act
• Invitation to comment

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Next - The proposed regulation

• The specific language being proposed
• Review to be sure
• Actual language conforms to the explanation in
  the Supplementary Information, and
• Proposal is clearly written and easily understood

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Master calendar effective dates

• New regulations are effective July 1
• Final regs must be published by November 1 to be
  effective July 1
• If not published by Nov 1, not effective until
  the following year

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Master calendar effective dates

• 45 day implementation permitted on occasion (i.e.
  emergencies)
• Implementation before effective date is permitted
  IF it is deemed to be to the advantage of schools
  AND the Secretary designates the reg as such

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General rules for responding

• Keep it short
• Refer to the section you are commenting on
• Explain who you are, and why you are responding
• Submit by the deadline
• Constructive criticism

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General rules for responding

• Numbers count
• Associations are only one response, no matter how
  big
• Content
• A good, logical argument, backed up with data,
  can make your point

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Your response

• If you agree, say so.
• If others disagree, you want your view to
  prevail
• If you disagree, explain why.
• Is their reason for doing something valid?

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Your response

• Because something adds to your workload is
  generally not a good reason to oppose a
  regulation, unless it is especially burdensome.
• It is appropriate to bring workload issues to the
  attention of your school. They may wish to
  respond directly, or through Presidential
  Associations.

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Your response

• If the proposal isnt clear, tell them
• Use examples to explain how your students will be
  impacted
• Are there unintended consequences?
• Are there alternatives that will accomplish the
  same goal with less burden?

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Sending your response

• Send comments to government web address
• www.regulations.gov
• Department of Education
• Docket ID Number
• Loans ED-2007-OPE-0133
• Can view other comments that have been submitted

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Sending your response

• If you believe the regulations create a burden,
  send a copy to OMB
• Send copies to
• NYSFAAA, EASFAA, and NASFAA
• your schools government relations office
• Presidential assoc. AASCU, NAIC, AACJC
• your supervisor

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Handling responses

• ED staff read every comment
• Comments are broken down by the section of the
  regulation that they apply to, and each is
  reviewed
• A response is drafted for each comment or group
  of comments
• The names of responders are not included

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Final regulation

• Almost always issued by November 1
• Remember what we said earlier -
• HEA Master Calendar requirement
• Rule can be suspended in emergency
• Early implementation may be allowed

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Final regulation

• What should you look for?
• Supplementary Information
• Implementation Date
• Analysis of Comments and Changes
• Format will be comments, discussion, and changes
• Discussion will explain EDs rationale for what
  they have done

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• Now youre prepared to take part in the
  regulatory process.
• Any Questions?