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Hot Off the Press The Negotiated Rulemaking Process and Final Regulations Brendan Furey American Student Assistance Zack Goodwin Harvard University Today we will…. Outline the Negotiated Rulemaking process Highlight the MASFAA Government Relations Committee response to the Program Integrity NPRM Provide a concise overview of each section of the Final Rule Note available resources Respond to your questions and concerns What is Negotiated Rulemaking? “Neg Reg” is the process by which laws passed by Congress are negotiated by stakeholders and opened for public comment before being implemented formally through regulation “Neg Reg” may also entail the review of regulations already in existence, to ensure they are current and reflect administration priorities Huh? “Neg Reg” is the process by which we may be involved in the development of regulation Congress passes new law or Administration requests regulatory review Public hearings are held to determine Rulemaking topics Negotiation teams are selected and Rulemaking meetings held NPRM is published with a solicitation for public comment Department of Education reviews comments and may make changes Final Rule published Master Calendar Public comment period for NPRM is typically 45 days Final Rule must be published by November 1 in order to require implementation by July 1 of the following year 2009-2010 Neg Reg Timeline June 2009: Public hearings held November 2009 – January 2010: Negotiating Team meetings August 2010: NPRM on Program Integrity public comment period closed September 2010: NPRM on Gainful Employment (New Programs) public comment period closed October 29, 2010: Final Rule published on Program Integrity Issues and Gainful Employment (New Programs) ---November 1, 2010: Final Rule on Foreign Institutions published Program Integrity Issues Definition of a Credit Hour State Authorization Repeated Coursework Written Agreements Between Institutions Incentive Compensation Satisfactory Academic Progress (SAP) High School Diploma Return of Title IV Funds: Compressed Courses Return of Title IV Funds: Taking Attendance Verification Misrepresentation Ability to Benefit Disbursements Gainful Employment: Disclosures/New Programs MASFAA’s Response On August 2, MASFAA’s Government Relations Committee submitted a response to the Program Integrity NPRM on 9 of 13 issues: Definition of a Credit Hour Return of Title IV Funds: Compressed Courses Return of Title IV Funds: Taking Attendance Gainful Employment (Disclosures) State Authorization Verification Incentive Compensation Satisfactory Academic Progress Misrepresentation Definition of a Credit Hour An amount of work established by a school to reasonably approximate to not less than 1 hour of classroom or direct faculty instruction and a minimum of 2 hours of out of class student work each week for approximately: 15 weeks for one semester or trimester 10 to 12 weeks for one quarter hour of credit, or The equivalent amount of work over a different amount of time The amount of work may include laboratory work, internships, practica, studio work, and other academic work leading to the awarding of credit hours Definition of a Credit Hour Accrediting and State Agency Procedures Accrediting agencies must review and evaluate the reliability and accuracy of the school’s assignment of credit hours This review must be part of the review for initial accreditation or pre-accreditation or renewal of accreditation Definition of a Credit Hour Clock to Credit Hour Conversion The method of converting clock hours to credit hours has been updated so that: A semester or trimester hour must include at least 37.5 clock hours of instruction A quarter hour must include at least 25 clock hours of instruction State Authorization Generally, no mandate requiring a state licensing agency However, if a state licensing agency or requirement exists, then schools must comply with the state licensing process in order to have access to Federal aid Repeated Coursework Repeated coursework in a term-based program may be counted in the student’s enrollment status However, it can not be counted if it reflects more than one repetition of previously passed courses, or repetition of a previously passed course due to the student failing other coursework Written Agreements Between Institutions Creates a distinction between written agreements between affiliated and unaffiliated schools Also requires schools with written agreements to provide a description of their arrangement to enrolled and prospective students Incentive Compensation Merit-based compensation for financial aid or admissions staff is still allowed However, no commission, bonus, or other incentive payments may be directly or indirectly paid based on success in securing enrollments or financial aid to any persons or entities involved in student recruiting or admissions activities, or in making decisions about the awarding of student financial assistance Satisfactory Academic Progress (SAP) SAP regulations have been consolidated into one section of regulations Confirms that SAP must be evaluated— At the end of each payment period if the educational program is equal to or shorter than an academic year, or At the end of each payment period or at least annually for all other programs (greater than an academic year) High School Diploma If there is reason to believe that the high school diploma is not valid or was not obtained from an entity that provides secondary school education, then the validity of the high school diploma must be evaluated Schools must develop procedures to evaluate high school completion for these situations Return of Title IV Funds: Compressed Courses For modules/compressed courses, a student who would otherwise be considered to have withdrawn is not considered to have withdrawn if the school obtains written confirmation at the time of withdrawal that he or she will attend a module that begins later in the same payment period However, for a nonterm or nonstandard-term program, that module must begin no later than 45 days after the end of the module the student ceased attending Return of Title IV Funds: Taking Attendance An “institution that is required to take attendance” includes not only an institution that is required to take attendance by an outside entity, but also an institution that itself requires its faculty to take attendance in certain circumstances An “institution that is required to take attendance” must use its attendance records to determine the withdrawal date Verification Policies The school must have written Verification policies and procedures that include the: Time frame for an applicant providing documentation Consequences of failure to provide documentation Method a school uses to notify students of results of Verification Procedures to make any necessary changes to FAFSA data Verification Selection The Department will publish each year a list of data items that may need to be verified, and will ‘target’ Verification items for each student selected Schools must verify all applicants selected for Verification by the CPS, except if the applicant: Dies Does not receive Title IV aid Receives only unsubsidized student financial assistance Transfers from another school and the new school obtains a letter from the prior school stating that Verification was completed and listing the transaction number of the applicable ISIR No Verification is required for parental or spousal information if the parents/spouse reside outside the U.S. and cannot be contacted via normal means Verification Acceptable Documentation To verify AGI: A signed copy of the income tax return or a joint return signed by one of the filers IRS Form W–2, or An acceptable reason for the tax return to not be able to be provided To verify the number of family members: A signed statement (dependent student must have both the applicant and one of the applicant’s parents) Statement must list name, age, and the relationship of each family member Verification Interim Disbursements Schools may make interim disbursements prior to receipt of an updated ISIR to alleviate a hardship caused by the delay in receiving financial aid, provided that corrections have already been sent to ED for reprocessing However, if a corrected ISIR/SAR is not received by the required deadlines, the school must reimburse the applicable program(s) using institutional funds Verification Consequences of Revised FAFSA Information The school must adjust the aid package based on the revised ISIR/SAR The Pell award must be recalculated based on the revised EFC and any additional funds paid However, if the Pell award is reduced as a result of Verification, the school must either: Adjust subsequent disbursements Require the applicant to repay the overpayment, or Pay the amount from institutional funds Misrepresentation If ED determines a school engaged in substantial misrepresentations, then ED may: Revoke the Participation Agreement Impose limitations on the school’s participation in Title IV programs Deny Participation applications Initiate legal proceedings against the school Ability to Benefit Clarifies Ability to Benefit regulations to provide that a student is eligible for Title IV funds after successfully completing six credits of college work, or the equivalent The coursework completed may be part of any eligible program offered by the school The aid may be disbursed after the end of the payment period during which the student successfully completed the requisite coursework Disbursements The school must provide a way for Pell Grant-eligible students to obtain or purchase required books and supplies by no later than the 7th day of the payment period if, 10 days before the payment period: The school could disburse the student’s funds, and Disbursing those funds would result in a credit balance Gainful Employment Disclosures Schools must report and disclose the: Occupations the program prepares students for On-time completion rate The full cost of attendance for the program Placement rate based on methodology from the accrediting agency or State, until the National Center for Education Statistics (NCES) begins publishing a placement rate The median loan debt for students Schools must provide this information on the program's home page and promotional materials in a simple and meaningful manner Gainful Employment New Programs Schools wishing to offer new programs leading to gainful employment must apply for recognition of each program Schools will submit notices 90 days prior to offering a new program that include: Narrative explanation of how the program was developed and how it meets market needs Documentation of accreditor approval of the program Approval process may changed in the future, in consideration of Negotiated Rulemaking on gainful employment performance measures (metrics) Gainful Employment Metrics Repayment Rate The percentage of the outstanding principal balance of the Federal loans taken by the academic program’s former students who entered repayment in the previous four years that has been repaid Debt-to-Earnings Ratio For the academic program’s completers, the average educational loan payments (Federal, private, and institutional financing plans) as a proportion of the borrower’s income (either discretionary income or average annual earnings). Loan payment amount based on a 10-year amortization schedule at 6.8 percent When must these regulations be implemented? All regulations must be implemented by July 1, 2011 EXCEPT Verification State Authorization July 1, 2012 July 1, 2012 or 2013 -- only with approved extensions Gainful Employment: New Programs July 1, 2011 or later pending release of OMB Control Number Help!? U.S. Department of Education Negotiated Rulemaking website: http://www2.ed.gov/policy/highered/reg/hearulemaking /2009/negreg-summerfall.html U.S. Department of Education Federal Register website: http://www2.ed.gov/news/fedregister/index.html Help!? National Association of Student Financial Aid Administrators (NASFAA): National Association of College and University Business Officers (NACUBO): www.nacubo.org National Association of Independent Colleges and Universities (NAICU): www.nasfaa.org www.naicu.org Association of Public and Land-Grant Universities (APLU): www.aplu.org Questions? Contact us Brendan Furey Zack Goodwin Manager of Compliance American Student Assistance [email protected] Director of Financial Aid Harvard University Division of Continuing Education [email protected] Thank you!