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The Department proposes to create and amend, through negotiated rulemaking, regulations relating to institutional eligibility and operations for participation in Federal student financial aid under title IV of the Higher Education Act of 1965, as amended, including those relating to credit hour, competency-based education, direct assessment programs, and regular and substantive interaction between faculty and students in the delivery of distance education programs, in order to promote greater access for students to high-quality, innovative programs of postsecondary education.

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As required by Executive Order 13771 and 13777, the Department must identify regulations that are among other things outdated, unnecessary, or ineffective and create a serious inconsistency or otherwise interfere with regulatory reform initiative and policies.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 outlined regulations is necessary so that the Department does not inhibit innovation and competition in postsecondary education. For example, regulations implemented regarding the credit-hour, regular and substantive interaction and institutional partnerships in instructional programs may limit innovation and inhibit student completion and graduation in the rapidly evolving postsecondary education landscape. 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 topics and instead work on sub-regulatory guidance to ease burden and clarify current regulations for postsecondary institutions and accreditors. Another alternative is to only negotiate on one or a smaller number of the topics the Department has proposed.

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 FR 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.

Also, by negotiating a wide range of topics the Department risks not having the expertise necessary on the rulemaking committee to fully explore the nuances of each of the proposed topics. To account for this the Department will form two subcommittees, one directly related to direct assessment programs and competency-based education. These committees will report back to the main rulemaking committee with their reports.

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.