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The Department is proposing to amend, through negotiated rulemaking, the regulations governing the legal authorization of institutions by States.  The Department is also proposing to amend regulations for the State authorization of distance education providers and correspondence education providers as a component of institutional eligibility for participation in Federal student financial aid under title IV of the Higher Education Act of 1965, as amended.

Statement of Need:

As required by Executive Order 13771 and 13777, the Department must identify regulations that are among other things outdated, unnecessary, or ineffective and create a serious inconsistency or otherwise interfere with regulatory reform initiative and policies. 

Update and revision to the regulations on State Authorization is necessary so that the Department does not inhibit innovation and competition in postsecondary education. Institutions need the regulatory flexibility to innovate and the Department is committed to ensuring program integrity with appropriate guardrails to protect students and taxpayer dollars.  The focus of this rulemaking is on breaking down barriers to innovation and reducing regulatory burden while protecting students and taxpayers from unreasonable risk. 

Summary of the Legal Basis:

The Department has the authority to establish a negotiated rulemaking committee with the purpose of creating, amending or rescinding regulations in the Code of Federal Regulations. 

Alternatives:

One alternative is not to negotiate on the proposed topic and instead work on sub-regulatory guidance to ease burden and clarify current regulations for postsecondary institutions and accreditors.

Note that, the intent to establish a negotiated rulemaking committee has already been published; the topics proposed for negotiation have been added to the Agency Agenda Report/Unified Agenda . Further, the Department has already conducted one of three public hearings inviting comment on our Federal Register notice outlining our intent to negotiate. After reviewing feedback from comments received, the Department may choose to modify the topics proposed for negotiation and at that time we can more thoughtfully provide alternatives. 

Anticipated Costs and Benefits:

We have limited information about the potential cost and benefits and cannot estimate at this time

Risks:

By negotiating on a wide range of topics in one negotiated rulemaking panel there is an increased risk on not reaching consensus.   To account for this, the Department will provide draft language prior to the first session of three sessions (each session is three days long) of negotiated rulemaking. Historically, the first session has been used as a listening session to get feedback from the rulemaking committee and the Department provides more specific proposals to the rulemaking committee between the first and second session.

Further, there is no prohibition in the rulemaking process for the main committee to break-off before, during or after a session to discussion topics within their areas of expertise to propose language to the main committee