Intention to Initiate Federal Rulemaking Announced

This week we saw the start of what we have been expecting from the new administration – new rulemaking. Experts have shared for months that the Biden Administration and the Department of Education have prioritized several issues to address including:

• Title IX,
• Borrower Defense to Repayment,
• Gainful Employment,
• 90/10 Rule, and
• FAFSA Simplification.

These priorities express this administration’s desire to protect students. In a recent press release, The U.S. Department of Education Secretary Miguel Cardona underscored this intent by saying,

“The Department of Education’s primary responsibility is to serve students and borrowers. That means taking a fresh look at a range of regulations to make sure they are not creating unnecessary barriers, but instead can ensure that institutions and programs serve our students well.”

It was expected that these issues would be addressed through rulemaking which has multiple procedural steps before a regulation becomes effective.

Department of Education Press Release

The rulemaking process begins with public input. The May 24, 2021 press release by the Department of Education announced the intention to hold virtual public hearings on June 21, 23, and 24 in order to receive stakeholder input on potential issues for the an upcoming rulemaking.

The press release further described the issues the Department has proposed to be addressed. These issues include:

• borrower defense,
• gainful employment,
• rules for loan repayment, and
• improving rules governing targeted student loan cancellation authorities for borrowers engaged in public service, with disabilities, or whose institutions close, among other topics.

After completion of the public hearings the Department will seek nominations for non-federal negotiators to serve on the negotiated rulemaking committee starting in late Summer 2021.

Proposed Regulatory Issues to be Addressed

1. Change of ownership and change in control of institutions of higher education under 34 CFR 600.31;
2. Certification procedures for participation in title IV, HEA programs under 34 CFR 668.13;
3. Standards of administrative capability under 34 CFR 668.16;
4. Ability to benefit under 34 CFR 668.156;
5. Borrower defense to repayment under 34 CFR 682.410, 682.411, 685.206, and 685.222;
6. Discharges for borrowers with a total and permanent disability under 34 CFR 674.61, 682.402, and 685.213;
7. Closed school discharges under 34 CFR 685.214 and 682.402;
8. Discharges for false certification of student eligibility under 34 CFR 685.215(a)(1) and 682.402;
9. Loan repayment plans under 34 CFR 682.209, 682.215, 685.208, and 685.209;
10. The Public Service Loan Forgiveness program under 34 CFR 685.219;
11. Mandatory pre-dispute arbitration and prohibition of class action lawsuits provisions in institutions’ enrollment agreements (formerly under 34 CFR 685.300) and associated counseling about such arrangements under 34 CFR 685.304;
12. Financial responsibility for participating institutions of higher education under 34 CFR subpart L, such as events that indicate heightened financial risk;
13. Gainful employment (formerly located in 34 CFR subpart Q); and
14. Pell Grant eligibility for prison education programs under 34 CFR part 690.

Announcing Negotiated Rulemaking Committee, Public Hearings, and Public Comment

The May 26, 2021 Federal Register Announcement offers the Department’s interest in advancing equitable outcomes and invites comments from those significantly affected by the suggested topics that will be addressed in this rulemaking. The Department announced that interested parties may provide comments on the proposed regulatory issues as well as suggesting additional issues that should be considered by the negotiated rulemaking. Comments may be provided during public hearings or by submission of written comments.

The Department has expressed that they are particularly interested in comments on regulations that would address gaps in postsecondary outcomes including retention, completion, student loan repayment, and loan default. The announcement also explained that the Department expects the committees to be created after the public hearings with the negotiation sessions to begin no earlier than August 2021. The committees will meet virtually for up to three sessions of approximately five days each at roughly four-week intervals.

The Department has expressed that they are particularly interested in comments on regulations that would address gaps in postsecondary outcomes including retention, completion, student loan repayment, and loan default.

How to Register to Present Comments at the Public Hearings

Public Hearings will be held virtually on June 21, 23, and 14, 2021. Interested individuals must register to present their comments by sending an email to [email protected]v no later than 12:00 p.m. Eastern time on the business day prior to the public hearing at which they want to speak. The time limit for comments is five minutes. Here is additional information the public hearings.

How to Observe the Public Hearings

For those interested in observing the public hearings, the Department will post registration links for the public hearings on the Department’s website. There will be a unique link each day for attendees who wish to observe. Non-speaking attendees will join the public hearings through Microsoft Teams Live. The Department will also post transcripts of the hearings on that site.

Written Comments

The Department directs that written comments will be accepted through July 1, 2021.

As we have shared in previous public comment periods, please obtain appropriate approval at your institution or organization if you are commenting on their behalf. You may comment as an individual, but in that case, be sure not to use your institution or organization’s letter head.

Submissions may be offered in several ways but will not be accepted by fax. The Department offers the following options to submit a written comment:

• Federal eRulemaking Portal: Go to www.regulations.gov to submit comments electronically. Information on using Regulations.gov, including instructions for accessing agency documents, submitting comments, and viewing the docket, is available on the site under “FAQ.”
• Postal Mail, Commercial Delivery, or Hand Delivery: Addressed to Vanessa Gomez, U.S. Department of Education, 400 Maryland Ave. SW, Room 2C179, Washington, DC 20202.
• Link highlighted green box at the top of the Federal Register Announcement: Submit a Formal Comment.

Next steps

You may wish to consider providing input at this time though the public hearing or written comments. The Department has expressed particular interest in comments on regulations that would address gaps in outcomes, retention, completion, student loan repayment, and loan default. Specifically, the Department wishes to consider impact due to demographic characteristics such income, race/ethnicity, gender.

WCET would like to reflect our members questions and concerns regarding this proposed rulemaking process. Please share your thoughts and questions regarding the proposed regulatory issues and suggested additional concerns that should be considered by the negotiated rulemaking with the team at WCET. Your thoughts and questions may be sent directly to Russ Poulin ([email protected]) or Cheryl Dowd ([email protected] ).

Please look to WCET in the months ahead to share updates on this rulemaking process.

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