Office of Postsecondary Education - U.S. Department of Education

WReier-Aviles on DSKGBLS3C1PROD with RULES266834 Federal Register / Vol. 75, No. 209 / Friday, October 29, 2010 / Rules and Regulationshigher education by helping to curtailfraud and abuse and would protect theinterests of a diverse population ofstudents who are seeking highereducation for personal and professionalgrowth. Some of the commenters alsostated that the Secretary’s proposedregulations would provide a levelplaying field that benefits the majorityof institutions of higher education thatare committed to sound academic andadministrative practices.Discussion: The Departmentappreciates the numerous comments wereceived in support of the proposedregulations.Changes: None.Comment: Several commentersdisagreed with the process by which theDepartment developed the proposedregulations. The commenters believethat the Department did not negotiate ingood faith and did not follow faithfullythe Federal negotiated rulemakingprocess. These commenters believedthat the Department excluded importantmembers of the proprietary schoolsector from the process and failed toprovide adequate time for review of andcomment on the proposed regulations.Because of the complexity of theproposed regulations, these samecommenters also requested that theDepartment delay the effective date forimplementation of the final regulations.Several other commenters believed thatbefore negotiating proposed regulationswith such a broad scope, theDepartment should have conductedstudies to assess the impact theproposed regulations would have onaffected institutions. Lastly, onecommenter expressed the view that theDepartment began negotiations withoutpresenting examples of abuse or datathat supported additional regulation andthat many of the Department’s concernsabout program integrity could have beenbetter addressed by enforcing currentregulations.Discussion: We disagree with thecommenters who said that theDepartment did not act in good faith innegotiating the proposed regulations orthat we did not follow the negotiatedrulemaking process. In conducting thenegotiated rulemaking for theseproposed regulations, the Departmentfollowed the requirements in section492 of the HEA, which govern thenegotiated rulemaking process andrequire the Department to choose non-Federal negotiators from the groupsinvolved in the student financialassistance programs authorized by titleIV of the HEA. As addressed earlier inthis preamble, all of these groups wererepresented during the negotiations.We believe that the 45-day publiccomment period was an adequate periodof time for interested parties to submitcomments, especially in light of the factthat prior to issuing the proposedregulations, the Department conductedpublic hearings and three negotiatedrulemaking sessions, wherestakeholders and members of the publichad an opportunity to weigh in on thedevelopment of much of the languagereflected in the proposed regulations. Inaddition, we believe that the 45-daypublic comment period is necessary inlight of the HEA’s master calendarrequirements. Under thoserequirements, the Department mustpublish final regulations by November1, 2010, in order for them to be effectiveon July 1, 2011. The Department mustadhere to the master calendar set forthby Congress and does not have thestatutory authority to amend it.We also do not agree that, except forcertain provisions of the regulationssuch as those that may involve systemschanges that require adequate lead timeto make, implementation of the finalregulations should be delayed. Forexample, the proposed regulations onFAFSA verification cannot beimplemented by the July 1, 2011effective date because the changeswould require system updates that willnot be in place by that date. We discussthe implementation delay of regulationsthat involve these system changeselsewhere in this preamble. Absentthese system-related or similar issues,however, we believe a delay inimplementing the final regulations willundermine the Department’s goal ofprotecting taxpayers and students byensuring the integrity of the title IV,HEA programs.Lastly, we disagree with thecommenters who stated that theDepartment should have conducted astudy to assess the impact of theproposed regulations on institutions ofhigher education before negotiating theproposed changes and thosecommenters who stated that theDepartment did not present examples ofabuse or data to support the proposedregulations. The Department’s decisionto improve program integrity bystrengthening the regulations was basedon many factors, including feedback wereceived from the public. Specifically,the Department developed a list ofproposed regulatory provisions based onadvice and recommendations submittedby individuals and organizations astestimony in a series of three publichearings in June of 2009, as well aswritten comments submitted directly tothe Department. Department staff alsoidentified issues for discussion andVerDate Mar2010 14:10 Oct 28, 2010 Jkt 223001 PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 E:\FR\FM\29OCR2.SGM 29OCR2negotiation. The proposed regulationsthat were negotiated during negotiatedrulemaking and included in theproposed regulations were developedfor one or more of the following reasons:• To implement provisions of theHEA, as amended by the HigherEducation Opportunity Act of 2008(HEOA).• To update current regulations thathad not been updated in some time sothat they more accurately reflect thestate of the law as well as theDepartment’s current practices andpolicies (e.g., aligning the regulationswith the Department’s FAFSAsimplification initiative).• To respond to problems identifiedby students and financial aid advisorsabout the aggressive sales tactics usedby some institutions.• To respond to a report from theUnited States GovernmentAccountability Office published inAugust of 2009 that raised concernsabout proprietary institutions andrecommended stronger Departmentoversight to ensure that only eligiblestudents receive Federal student aid.We believe that all of these factorsprovided ample support for theDepartment to immediately proposestronger regulations to protect studentsand prevent fraud and abuse in the titleIV, HEA programs.Changes: None.Comment: Many commentersexpressed concern about what theyargued would be a negative impact ofthe proposed regulations on institutionsof higher education, particularlyproprietary institutions. Thesecommenters stated that the proposedregulations are too complex and toobroad in scope and that, as a result, theywould disproportionately imposeburdens on the institutions that servemany of the students who need the mostfinancial assistance. Other commentersstated that, in these trying economictimes, institutions simply do not havethe resources to administer thedisclosure, reporting, andimplementation requirements includedin the proposed regulations. Some ofthese commenters stated that theyfeared that the cost of compliance withthese regulations, which many arguedwere ambiguous or inconsistent, woulddrive their small proprietary institutionsout of business.Several commenters stated that theproposed regulations target the entireproprietary school sector of highereducation, while the actions of only afew proprietary institutions are causefor concern. These commenters decriedthe Department’s ‘‘one-size-fits-all’’approach to ensuring program integrity.