Negotiated Rulemaking Program Integrity and Institutional Quality - 1/8/24 

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 DEPARTMENT OF EDUCATION

 OFFICE OF POSTSECONDARY EDUCATION

 NEGOTIATED RULEMAKING PROGRAM INTEGRITY 

AND INSTITUTIONAL QUALITY 

 SESSION 1, DAY 1, AFTERNOON

JANUARY 8, 2024

On the 8th day of January, 2024, the

following meeting was held virtually, from 1:00 p.m.

to 4:00 p.m.
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P R O C E E D I N G S

MR. ROBERTS: Good afternoon, folks. 

Welcome back from your lunch break. My name is Brady 

Roberts with the FMCS, we are going to resume our 

discussion on cash management for the remainder of the 

day, most likely and then pick up and end the day, as we 

will all days of this negotiated rulemaking with public 

comment. So we were still on number one of that list 

under 668.164 on student meal plans. And it's my 

understanding, Greg, you have a few comments to kick off 

the afternoon session?

MR. MARTIN: No, I- no, I don't really 

have much to say, Brady. I think we're just going to gostart- we had some people who were waiting to make 

comments. We heard some early remarks. And so I think 

we'll just proceed with who is in the queue at this 

point.

MR. ROBERTS: Great. If folks want to 

remind me who still had a comment to make on for this 

proposal number one in the cash management issue paper. 

Are there any additional comments on this?

MS. JEFFRIES: Brady, it's actually 

668.161 is where we're discussing.

MR. ROBERTS: Slow on the uptake this 

afternoon. Apologies. Jason, go ahead.
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MR. LORGAN: Thank you. I just wanted 

to ask a question about how R2T4 might be impacted by 

this. If a student withdraws with the- we return the 

unused portion at that time, or is it just the obligation 

to return the excess if they attend the entire period? Or 

how does that work?

MR. MARTIN: Sorry. Coming off mute 

here. So this- well, first of all, the requirement to 

return the funds is outside the R2T4. You know thisthese are presumably students who are still enrolled. But 

is your question if a student- if a student were to 

withdraw during a payment period and have funds still 

unused? Is that your question? Because the only time R2T4 

would come into play would be if a student withdraws 

during a payment period. So that could be like- we'll 

just make an example. So during the fall semester, the 

student were to, you know, I don't know, 40% into the 

term, the student would withdraw. And then of course, 

there's a statutory requirement to the R2T4 calculation. 

It's strictly the way it's- strictly the way it's done. 

And I suppose is the question that there would- that 

there could conceivably be at that point, a remaining 

unused balance on the meal and on the meal plan?

MR. LORGAN: I think just what you 

said clarified it enough.
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MR. MARTIN: Yeah. Okay. Does that 

make sense, then? Because it would be- the two are 

completely separate. So we're talking about in the one 

case if the student withdrew. Unless David has something 

else to add. We'll ask if David wants to make a comment.

MR. ROBERTS: Alright. Thank you. 

Jillian, I see your hand next.

MS. KLEIN: Yeah, and I think this 

comment- I don't remember who made it at the beginning, 

and I'm sorry to be duplicative. So I'm not trying to do 

that. I think the question was raised about, does this 

apply just to flex plans or to all meal plans? And I know 

the Department answered that question, but I would justand I said this in the chat too, so sorry, but I don't 

think the regulatory text as proposed is clear that the 

Department's intention is just flex plans. So I just call 

that out. I'm not sure exactly how to do that in a way 

that doesn't also capture swipes or whatever. And I'm 

speaking a bit out of my depth because we don't do that 

here. But, I just want to be clear if that's the 

Department's intention, that they be clear in the 

regulatory proposal too.

MR. MARTIN: Okay. Yeah. Thanks. 

Thanks, Jillian. We'll look at the language to maybe make 

that a little more- clarify that.
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MR. ROBERTS: Thank you. DC, I see 

your hand.

Dr. Prince: Thanks. The question I 

have is to the Department. Is this a particular issue 

that is so serious that it has to be addressed right now? 

Are there blatant, you know, policies that are- that 

institutions are just blatantly disregarding? Is there 

like, millions of dollars that are being swept that the 

Department's trying to recuperate? I mean, I would- I put 

in the group before we left. I don't know if you saw it. 

Are we getting a lot of student complaints about this 

from students? And what- how many did we get? At what 

point of time of the year are they coming? It just seems 

as though that we're trying to target a particular area. 

And I'm not sure the Department wants to die on a hill on 

this one. And so I'm just trying to understand the 

brevity with- to make sure that we're making an 

appropriate vote here. And I don't think I heard that 

when I heard you, you know, introduce this.

MR. MARTIN: I can probably have Dave 

address if there are compliance issues involved, if he's 

heard anything as far as- you know, because FSA would be 

with the student complaints would be collected or else 

Denise Morelli an Office of General Counsel. But our 

concern is that collectively it does represent a lot of 
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money that's on these flex plans and that it is student 

money that, that, you know, that is unused and swiped 

back to the institution and that, that does contain Title 

IV- potentially contain Title IV funds. So, it is of 

interest to us. I don't know that we have any statistics 

about, you know, the- that we would have any statistics 

as to the amount that is involved here. But we have- you 

know, we have heard that, you know, that it- voiced that 

this is an area that needs to be addressed. I don't- if 

your point is, is it the most egregious problem out 

there? Probably not, but I still think it comes back to 

the fact that this is just- this is- unlike the standard 

meal plan, this is cash or this is- these are funds on an 

account which, you know, we're- student money for a 

purpose which institutions routinely sweep, and I don'tin addressing it here, I think that we close an area 

that- where I think it could be perceived that Title IV 

funds are being- not being used for the purpose for which 

they were intended. But I will ask- Denise has her hand 

up. She may have more to add about actual circumstances. 

Go ahead, Denise.

MS. MORELLI: I don't think we have 

statistics, DC, on terms- in terms of students or volume 

or amounts, but we have received complaints over the 

years of this being an issue where students that- believe 
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that it's their funds and it's being swept in. So it's an 

issue that we can address. I can- we can go back and 

check and see if we have more solid statistics. But it 

has been raised as an issue to the Department.

MR. ROBERTS: Okay. Thank you all. 

Anything else? Not seeing anything immediately. Greg, do 

you want me to turn it back over to your team for number 

two?

MR. MARTIN: Thanks, Brady. Not seeing 

anything else, we will go back and- in the issue paper, 

look at number- just making certain I'm unmuted here. 

We're going to go back and look at number two under 164. 

And Vanessa's pulled up the appropriate part of the issue 

paper here, and the discussion is on page- is on page 

two. And this is a relatively- a pro forma change we're 

proposing to make here. So in 2, we propose to increase 

the amount of current-year funds that may be credited 

against prior year charges from the current $200 to $300. 

To account for inflation and we give the regulatory 

citation there. Currently, the Department limits the 

amount of current-year funds that may be used to pay 

prior year charges. Excuse me, to $200. This provision 

permits the use of Title IV funds to cover minor 

allowable charges in the prior year that would otherwise 

go unpaid, and could prevent students from re-enrolling 
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in the following term. This amount was established in 

November of 2007. As the price of goods and services 

continue to rise, the $200 limit provides less benefit 

than it did 15 years ago. Using the US Bureau of Labor 

Statistics Consumer Price Index inflation calculator, the 

$200 threshold established in 2007 would increase to 

approximately $286, which we've rounded up to $300 for 

simplicity and going forward, we would adjust this 

amount, if appropriate, on a five-year basis by 

publishing a notice in the Federal Register. So we can go 

back to the discussion. The actual reg text in 164 and if 

you look at the bottom of page five, you can see under 3 

the discussion there. And we'll go to that. And Vanessa's 

pulled that up for us. An institution may include in one 

or more payment periods for the current-year prior year 

charges of not more than three. So you see, we had the 

$200 adjusted to $300 for tuition fees and 

institutionally provided room and board as provided under 

paragraph (c)(1) romanette 1 of this section without 

obtaining students authorization or educationally-related 

goods and services provided by the institution as 

described in (c)(1) and romanette 2 of this section. If 

the institution obtains the student or parents' 

authorization under 668 165 B, so with that I will open 

up the floor for discussion.
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MR. ROBERTS: Alright. Thank you. Joe?

MS. BLONDIN: Yes? Hi, there. I'm just 

curious, historically, how $200 was arrived at in 

November of 2007? Thank you.

MR. MARTIN: The whole- the whole 

allowance, so, I mean, if we go back, you know, 

historically speaking, the law makes no provision for 

this. I mean, basically the statement of purpose would be 

that Title IV funds have to go for allowable charges in 

the year in which they're provided. So, whenever I've 

been pressed in the past and said, well, why don't you 

allow more, bigger amounts of money? Because technically 

we are already, in allowing this, it's- well, OGC has 

determined that it is within the realm of statute, that 

it is- it's already a latitude that that's more we used 

to have. I'm trying to go back and reconstruct the past. 

We used to have it that schools could do it if they had 

determined that they could use prior charges, if they had 

determined that all other charges were paid, and we had a 

problem with that. So in '07, we just changed it to- we 

just simply changed it to a flat 200. I'm not sure there 

was any- and maybe David or Denise can correct me here. 

I'm not sure we did any, you know, extensive analysis 

about that. We just wanted to establish a- what we 

thought a small, you know, a small, minimal amount was 
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that would allow for the payment of minor charges a 

student had left over from the previous year. So we 

settled on the $200, and that got established in 

regulation. I'm not certain if we tied that to anything 

else, to be honest with you. I have to go back and 

reconstruct that, and maybe one of my Department 

colleagues can remind me of that. But that was what was 

settled on. We've used that protocol ever since, and this 

really is just adjusting for a change. It's just really 

to allow for a minor amount of money to go for that, 

recognizing that that we still are sticking with what the 

law says about funds having to be used in the currentyear. I hope that answers your question. I don't really 

have any more information now about exactly why we 

settled on 200. I could go back and look at that, look at 

the language in that- in our Notice of Proposed 

Rulemaking. It might be a little more detailed there, but 

it's a sufficient number of years ago now that I don't I 

don't recall the exact- the exact details of that, but 

that's pretty much where we are.

MR. ROBERTS: Thank you. Greg. 

Jillian.

MS. KLEIN: Thanks. I think my comment 

maybe is sort of similar, although I don't know the 

spirit of what Joe was asking, but, I would just say, I 
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think, you know, having worked in higher ed for many 

years, I think folks in the industry have felt largely 

like the $200 was low 15 years ago or whenever this 

started, especially given the way that we know that small 

balances can often be the catalyst for students to step 

out and discontinue their studies. So similar question to 

Joe. Like, I think it would be helpful if there's some 

sort of data-based rationale for why this is the right 

number, given that we know that it's the worst case 

scenario for students to have to step out just because 

they're carrying a small balance that maybe could be 

solved by this, even if we consider bumping it up to like 

$500, and then it gets, sort of revisited on a five-year 

basis. But I would just want to make sure that that 

dollar threshold makes sense when we think about the 

problems that we know facing students in continuation.

MR. MARTIN: Yeah. Good point. I want 

to point out that in the past, I think when we discussed 

this, that some individuals have made the mistake of 

thinking and this is what- this is part of the problem we 

have with the- if you go back prior to 2007, when we had 

it that I think it was- I think it was $100 [inaudible] 

and maybe David, correct me, it was $100, or it could be 

higher if the institution documented that all expenses 

were paid. The problem with that is that a lot of people 
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interpreted that to mean only expenses due to the 

institution. I would remind- and I would always remind 

everybody at that point that when we're talking about 

Title IV Aid being able to be used for allowable charges, 

we're talking about those charges generally speaking, as 

part of the cost of attendance, which includes more than 

just tuition and fees, as everybody is aware, and that 

there really is no way the school can determine in any 

situation whether the school- whether a student is paid 

all or his or her current-year expenses, whether those 

are covered. The Department has always had concerns 

about- in allowing more than this, that, you know, 

there's only- there's a finite amount of money and a lotand allowing an institution to go and apply current-year 

charges back to prior year charges- current-year funds, 

I'm sorry, to prior year charges that our concern is that 

there are potentially current-year. That the institution 

could be looking at it in terms of, well, what's 

important is that we get paid and not that the student 

can cover rent, food, those other things. So that's one 

reason why we've been reluctant to expand it by more than 

what we have here. The other again, is a statutory 

concern that our attorneys had in prior years. And 

probably still do, that even a small amount like this, if 

you're looking at it strictly, very strictly, it should 
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be zero. But, we do allow a small amount, so, we couldwhat we're doing here, I think- I mean, we're not 

establishing the amount where we were in 2007. This is 

simply an adjustment for inflation. I mean, to go back. 

So we're not really looking at it in terms of was the 200 

appropriate at the time? So I mean, I would be reluctant 

to entertain, looking at that figure in any more detail, 

because I think that I've always been of the opinion 

that- and allowing it at all, it's somewhat of a stretch.

MS. KLEIN: Yeah, I get it. I mean, I 

guess I'm saying if you're going to crack it open, then 

maybe it's an opportunity to make sure it's the right 

amount. But I also hear you saying, Jillian, be happy 

with what you get and stop asking questions about- 

[inaudible]

MR. MARTIN: Yeah, the words areyeah, I'll be- I know my colleagues have their hands up, 

so I'm going to go back to Brady to callMR. ROBERTS: Yeah. Dave, do you want 

to weigh in?

MR. MUSSER: Just real quick to give a 

tiny bit more regulatory history on this one. The amount 

was originally $100 and was established back in the mid90s at the behest of non-Federal negotiators. At the 

time, the Department made essentially the exact same 
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argument that Greg did just now, which is that, we have 

real concerns about our statutory authority to allow 

institutions to use funds from prior years to pay for 

charges in subsequent years. However, during the 

negotiation, we came to an agreement with, non-Federal 

negotiators to establish a de minimis amount, and the 

amount that the negotiators recommended was $100. Then 10 

years later, in around 2007, we raised it to $200, 

acknowledging inflation. And that's essentially what 

we're doing again.

MR. ROBERTS: Thank you. Barmak, I 

think your hand is next.

MR. NASSIRIAN: The couple of 

observations here. Agreeing in part and disagreeing in 

part with comments that have been made. I appreciate the 

randomness of the number, but to whatever extent you want 

to hang your hat on the $200 regulatory precedent, 

inflating it by the general rate of inflation really 

doesn't make sense, given the fact that tuition has 

historically not synced with general [inaudible] CPI. So 

I would suggest if you're going to inflate it, you have 

plenty of room and a fairly logical explanation that a 

larger amount can be accommodated. That's one point with 

regard to the magnitude of the amount. But I am troubled 

by the lack of agency for the students here. This is the 
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student's money and the idea of having the conduit for 

the delivery of funds pay itself is bothersome. If it's a 

nominal amount and there is a prior year balance, the 

institution is perfectly well positioned to counsel the 

student. Look, buddy, you got to pay this, or else you 

could be, you know prevented from enrolling, etc., etc. 

The idea of allowing the conduit for the delivery of 

funds to also pay itself without a prior authorization 

from the student or the parent is problematic. This is 

the student's money. To whatever extent you want to 

accommodate this little exception, it should be subject 

to the student's authorization. Thank you.

MR. ROBERTS: Thank you. Barmak. DC, I 

see your hand next.

Dr. Pince: The first question I have 

has a number of questions talking with folks about this 

particular issue. The first question I have is, what is 

the Department's threshold for not allowing, and I think 

I agree with Barmak to a point here, not allowing or not 

getting consent from students and parents. And then whatat what point do you believe a threshold would make you 

come back to negotiators and say that now we need even 

though we're going to go on based on inflation, now we 

need student or parent authorization. That's the first 

question.
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MR. MARTIN: I- well, I think that the 

reluctance we had with the authorization part of it isyeah, I mean, I agree that we could hypothetically 

increase the amount, right. And then say, well, it could 

be up to a certain amount if- with student authorization. 

But, again, we go back to a statutory problem, whereas 

there really is not such a thing as authorizing. I mean, 

a student- when you think about what student 

authorizations are, they're authorizations to- for 

instance, to, to use Title IV funds to pay for something 

other than tuition fees and room and board, if it's 

contracted through the institution, right? So for 

instance, the- an example would be your student 

bookstore, right. So to get- the student- we all know 

students go to the bookstore and they will charge books 

and supplies. All well and good, right. But the 

institution generally obtains a blanket authorization for 

that to occur. And that I think is good. But that is to 

allow for current-year charges to- current-year funds to 

be used as current-year charges. There really is no 

convention for using current-year charges, current-year 

funds for prior year charges. So an authorization would 

sort of presuppose that there is such a construct, and 

there really isn't. It's not something- I think it wouldit would perhaps I don't want to use the word legitimize, 
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but perhaps bring into play this idea that it's something 

that we want to build in, and that something could be 

counter to what the law says. And we need to go back to 

the reason for doing this originally, it was for very 

minor charges. I fully understand that there could be 

situations where students owe more, and that's a problem. 

Not trying to gainsay that in any way. I'm just saying 

that what this is about are very minor charges. So we 

didn't feel at the time that it was necessary to obtain 

an authorization for something that was a relatively de 

minimis amount. and I think that's probably the best 

explanation I can give for it. I don't think it would beI don't think it would be a- if we're sticking with $200, 

could we go and require an authorization? I suppose we 

could. Schools can obtain those fairly easily. I'm not 

necessarily opposed to that. It does add a measure of 

administrative burden to schools. We can talk about 

whether we feel that's necessary. And I can say at this 

time that the Department is not disposed to allow it to 

be any greater than $200. So, just to consider that in 

any comments you may have about whether or not a student 

authorization should be required.

MR. ROBERTS: And then DC, I know you 

had extra questions, but I see Denise's hand. Denise, do 

you want to weigh in?
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MS. MORELLI: Well, I just wanted to 

note that if the negotiators feel strongly about there 

should be an authorization here if we're going to do 

this, or increase it, or even leaving at what it is that 

they should propose that and the Department would 

entertain it.

Dr. Prince: I think that goes into my 

next question is this- it's a- it's also a process issue 

as well and so what are my risks as an institution? And I 

think I know the answer, but I want to see the 

Department's perspective is if I don't allow this at all. 

Because at the end of the day, if we can't- I think the 

issue becomes it's incremental money. And without a clear 

understanding of what- at what part do you want to get 

authorization or not? But really, is this- this doesn't 

seem as though it's a large enough problem to even 

entertain an increase or even have at the moment. And so 

why not propose- well, it could proposed, and what the 

Department's perspective on eliminating 3 altogether?

MR. MARTIN: I think the- I don'twell, first of all, in proposing this change, the 

Department is not suggesting that it's revisiting its 

position that it's- that it's acceptable to use a small 

amount of current-year funds to pay for prior year 

charges. So, we're sticking with that line of reasoning 
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in these rules. Again, all we were doing here was 

accounting for the standard rate of inflation. so I don't 

think we're departing from that- from our position that 

it's acceptable for a small amount to go for prior 

charges. So, I don't- we're not- I don't think we feel 

that there's any feeling among the Department- among, you 

know, Department officials that that it needs to be 

eliminated, that there's abuse. The fact that we limited 

it to $200, now would be three, is an adequate- is in 

adequate control on that. To address your question about, 

you know, do schools have to do this? No. You could as an 

institution determine you're not going to apply any 

current-year charge- any current-year funds against prior 

year charges, even up to the amount that's allowable. You 

don't have to do it. It was supposed to be something that 

was administratively simple for schools that wouldn't 

require a lot of extraneous work or burden that they 

could just- that they could just do because, you know, if 

a student had like a remaining balance of $150 or 

something that was relatively small, it could just be 

covered. Where those balances get large, I think thatthat's an issue that institutions have to take up with 

those students. You know, that there are other things in 

play where a student might owe, you know, larger amounts 

of money. So I don't think that we- again in proposing 
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this, we're not trying to go back and reassess our 

position. It was simply a matter of accounting for 

inflation.

MR. ROBERTS: Thank you. Jessica, I 

see your hand next. 

MS. MORALES: Yes. I just want to make 

sure that we're keeping in mind that while most of us- I 

don't at the point- at this point in time have a job 150 

or something minimal wouldn't seem like much. but I'manything really past $20 for a student is actually a lot. 

And in terms of when we're planning on going to school 

and things like that, if one, I don't know that these 

charges are going to come out of my account. I am 

planning on having that money. And so I would very much 

push back on us saying, not having obtaining students' 

permission, or rather, it should be on the institutions 

to be talking to their students with money that needs to 

be paid back. Because again, if one, the process is hard 

enough as it is. And for students that don't know- don't 

know how to navigate the system, we're just adding on 

something else and then adding on more and more surprises 

of where that money is going to come from. It's going to 

put a student in a different mental state and not be 

ready for actually starting. And again, if the student is 

not able to return, then we have other problems. But just 
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keeping that in mind that while 200 doesn't seem like 

much for those of us that have jobs and those of us that 

don't have jobs, that is quite an expensive amount of 

money.

MR. ROBERTS: Thank you, Jessica. 

Jamie, your hand is next.

MS. STUDLEY: Very briefly, I think 

there may be some eliding going on here between whether 

this is unused funds. I understand it to be new- funds 

from the new semester that are now allocable back at the 

institutions option to the outstanding balances of the 

previous semester. And if that's the case, it really is 

the students ability to allocate their new semester's 

funds between this semester's expenses and the last 

semester. And I wonder if that affects- perhaps that 

should affect whether the student gets to make that 

choice even for such a small amount. I think where some 

of us are importing or hearing that it's related to the 

other item about the food services, that sounds as though 

it's leftover money could be applied back. And I think we 

just need to keep those two distinct- that distinction 

straight in the interest of students' control of the 

funds for them.

MR. MARTIN: Right. Well, first of 

all, I want to clarify its prior year- its prior year 
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funds. We don't- it doesn't go by semesters. So generally 

speaking, if you have a student who has a- you apply 

funds in the fall and there's a credit balance. The 

student- you would refund the credit balance, right, 

generally speaking. Well, you could obtain the student's 

permission to hold a credit balance if the student wants 

to do that. They could hold the credit balance and you 

could apply that to next semester's funds. This talks 

about at the end of the year. You're talking about 

having- you're talking about- you're not talking about 

anything left over. So that's what- I think that's the 

most important thing here. Nothing's left over as far as 

money goes. Charges are left over. That- that's what's 

left over. We have prior year charges. And now we're in 

the next year, we have a current-year A, right? No credit 

balance that we know of so far. This is just allowing you 

to say, okay, could you take- you know, usually you would 

take the next year's or current-year's funds and apply 

them towards the current-year's balance. But as we all 

know, when you look at the student's account, if there's 

a remaining balance that's going to be on what the 

student owes in total. And so when you apply Title IV

Aid, it's going to apply to that balance. And that 

balance that it's applied to can consist of currently 

$200 of prior year charges. So it's a year thing. And 
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you're right that there are obviously current-year 

charges to be paid. It's the school's- and it's the 

school's discretion whether to do this. And the reason we 

allowed it, I think, and as David pointed out, schools 

asked us for it, negotiators asked us for it way back in 

the 90s when we started this. And it was because I think 

in a lot of cases, schools might prohibit students from 

enrolling, even with a minor- even with a minor charge, 

right? So they might be prohibited. So in order to- we 

know it doesn't eliminate the number of times where- it 

doesn't eliminate students not being able to enroll 

because they cannot pay their extent charges, but it 

would at least make it so that for very small amounts of 

money, that might not be the case. The current-year 

charge could be applied against it and cover those 

charges. So it's- it- that's certainly- that's what the 

spirit of it is.

MR. ROBERTS: Okay. Thanks, Greg. And 

I do want to say I- thank you, Barmak, for putting the 

proposal in the chat. And obviously, negotiators, you're 

encouraged to submit any and all potential modifications 

to the regulatory text you've seen thus far for 

additional comment and review. Not seeing any additional 

comments on this. Greg, do you want to move to cost of 

books and supplies?
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MR. MARTIN: Yes. Let's move on. So we 

are now still under dispersing funds. And we're moving to 

point three on page two, and Vanessa's already there. And 

this proposal would eliminate the provision, allowing 

institutions to include the cost of books and supplies as 

part of tuition and fees under 668.164 (c) and (m). The 

current regulations permit schools to automatically 

charge students for books and supplies as part of tuition 

and fees without student authorization, even when the 

materials can be obtained from a source other than the 

institution. The regulations permit these charges if the 

school has a contract with a third-party publisher or 

retailer, offers the books below competitive market 

rates, and gives students a way to opt-out so long as the 

student can obtain the books and supplies by the seventh 

day of the payment period. The Department is concerned 

that the lack of disclosure and transparency limits 

students' ability to find expensive- less expensive 

rather, materials or assess if their school is offering 

the most affordable arrangement. Under the proposal, we 

would maintain the allowance for including books and 

supplies in tuition and fees when institutions 

demonstrate there is a compelling health or safety 

reason, or if the institution is the only option for 

students to access the books or supplies. So let's turn 
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to the relevant part of the regulation. And that can be 

found. I'm just trying to make sure I'm where I want to 

be. Right. So we're on two- on page five. Right. So there 

you see the- you see the relevant rule changes. An 

institution may include the cost of books and supplies as 

part of tuition and fees under paragraph (c)(1) romanette 

1 of this section. If the institution documents the 

current basis, books and supplies, including digital or 

electronic materials are not available elsewhere or 

accessible by the student enrolled in that program from 

sources other than those provided or authorized by the 

institution or the institution demonstrates there is a 

compelling health or safety reason, and you can see the 

elimination of the other elements there that we had- that 

are currently in the regulation. So essentially what 

we're doing here is the overall option for institutions 

to include books and supplies as part of tuition and 

fees, with the exception of what you see in romanette 1 

or romanette 2 would be eliminated. So with that, I will 

ask if either Dave or Denise have anything to add, and if 

they do not, we will open the floor for discussion.

MR. ROBERTS: Denise or Dave, anything 

to add before we turn it over to the negotiators? 

Alright. Any feedback? Questions? Yeah, Barmak.

MR. NASSIRIAN: So, first of all, I do 
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support what the Department is doing here, but I have to 

point out that for romanette 1- basically defeats 

whatever additional improvements you think you're making 

because it is so easy to make cosmetic or minor changes, 

particularly now that a lot of stuff is online. I mean, 

in the olden days, those of us who had to take calculus 

let's say more than once, remember how a canonical field 

where there is frankly, very little that is new in 

introductory courses somehow magically resulted in very 

expensive textbooks being published every semester. So at 

least in the old days, the publishers had the decency to 

make- to print this stuff. Now it's a matter of changing 

a web page in very inconsequential and cosmetic ways. So 

you have created a giant loophole. I think you- you think 

what your- the Department believes that it's sort of, 

yes, in good faith, if you have a benevolent environment 

in which the, you know, the effort is to minimize cost to 

students. Yes, that could be an exception. But again, 

exceptions can be accommodated with permission. Nobody is 

saying these charges are not eligible for Title IV 

support. The question is whether the institution can just 

automatically use Title IV funds without the student's 

permission. And I just have to point out this is a giant 

loophole that romanette 1 should be stricken. That's my 

proposal. It is not necessary. The institution, if there 
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is- if there are resources that are only available 

through whatever contract the institution may have with 

publishers. Well, you know, the student is not insane. 

The student will pay for that. But the idea of having the

institution automatically, charged the fees is 

problematic. And there's plenty of evidence, by the way, 

that publishers market their stuff precisely on the basis 

of the fact that- great news, this reminds me of the 

student loan debacle of some years back, where the 

gatekeeper purports to be operating in the best interest 

of the people whose money they're sort of spending, but 

is, in fact, engaged in a little bit of self-dealing. So 

I feel like it can be stricken without any harm. It 

doesn't limit the ability of students to obtain stuff, or 

for the school to use materials that are only available 

to it. Thank you. 

MR. ROBERTS: Thank you. JoEllen, I 

see your hand next.

MS. PRICE: Yeah. I just wanted some 

clarification on part of tuition and fees. So are we 

talking about when schools are rolling it in and it's 

disguised within the tuition and fees, or are we talking 

any time they charge for any kind of materials on their 

account? So I just- I want clarification on what that 

means.
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MR. MARTIN: Okay, I can- I think I 

can offer that. So what we are talking about here is- we 

can start with the current- what's currently permitted 

and I don't- and when I say what's currently permitted, I 

don't think that what we currently permit happens a lot 

in the- what we call the traditional environment. I mean, 

if we're talking about the traditional collegiate 

university environment, the student is just- obviously 

the cost of attendance includes, you know, an allowance 

for what- books and- books and supplies it can cost. But 

when it comes down to how it's paid for, generally what 

happens is the institution charges tuition and fees and 

room and board. They don't need the student's 

authorization to credit Title IV Aid against that. Books, 

supplies, what happens is, the institution will, when the 

student enrolls, collect an authorization for this- for 

the school to use Title IV Aid to apply against that. And 

the student might then purchase the- I mean, I'm going 

back with what Barmak said, be careful about my 1980s 

view of the world. You know, the big calculus book or 

the- or the 14th Norton edition of, you know, of medieval 

poetry, which couldn't have changed all that much in the 

13th. But nevertheless, it was a good excuse to have 

another [inaudible]. But, I don't mean to single out. 

Those are great- those are great books, by the way. 
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Fantastic. Fantastic compendiums of literature. But, theI think here, so what we're talking about here is in 

certain situations, especially where you have programs 

that are more like, vocational in nature or- so you would 

have where the student signs a contract or enrollment 

contract, so you'd have, like, tuition and fees and books 

and supplies all rolled up into one- into one charge. 

Right. So, all of that's- all of that is, is part of what 

the student owes. So maybe let's just say for the- it 

might even be charged for the entire program. The student 

owes, let's say $21,000 for all of the instruction, all 

of the- all of the supplies and everything. So it's all 

simply rolled into tuition and fees. And in most of those 

cases, like it's fairly common in some programs for the 

school, especially where there's a kit necessary. So like 

I could use cosmetology as an example. Typically there's 

a kit, obviously you're gonna be cutting hair. You're 

gonna be doing things like that. You need to have a lot 

of tools. Also medical. Medical programs as well, where 

you need to have certain tools and a lot of schools, you 

know, want to make certain that there's a standardized 

set of things you get. In many cases, the easiest thing 

to do would simply be- was simply to roll that into 

tuition and fees. So I wouldn't say it was disguised. 

Typically there's a enrollment agreement where it's 
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actually laid out exactly what that is, but you are 

obligated to pay for the whole thing. And although the 

current rules do have an opt-out provision- there is an 

opt-out provision there, moving to this would simplywouldn't negate schools from offering those things. They 

could still offer the kits, whatever to students. 

Students could still opt to buy from the school, but it 

would be moving all programs pretty much to a situation 

where the school would have to obtain the students 

authorization to apply Title IV funds against that and 

then they could go ahead and do it. So whereas currently 

it can just be- it's considered part of tuition fees, but 

I don't- I wouldn't go so far as to say it's never 

seldom, except in the case of really bad actors. And it 

is an attempt to disguise. It's simply a convention that 

many of those types of programs use. That's how I would 

describe it.

MR. ROBERTS: Thank you. Jillian, I 

see your hand next. I do also just want to note we have 

two alternates coming on there later on in the queue, but 

it's Dom Chase on behalf of business officers and Michael 

Cioce on behalf of two-year colleges. We'll get to them 

in a bit, but for now, Jillian, the floor is yours. 

MS. KLEIN: Yeah, so I'm really glad 

JoEllen asked that question, because, Greg, what I heard 
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you say is not my interpretation of what's being proposed 

in the regulatory text. So what I think I heard you say 

and tell me if this is not the Department's intention, is 

that if an institution is clear and transparent, that the 

student, for example- that there's a fee being charged 

that's- maybe it's called a book fee or a supply fee or 

something that is not rolled into one charge that the 

student is being charged for tuition and books or 

whatever other things, that that would still be permitted 

under the existing language to- for students to not have 

to opt-into that, that there would just, I don't know, I 

guess- I mean, you guys are striking the opt-out. I guess 

I'm confused, like your answer was not what I expected, 

and I don't feel like it aligns with what I think I'm 

seeing in the regulatory text. So that's my first 

question, which was not going to be my question, but 

maybe I'll start there. And then I have more.

MR. MARTIN: Well, I think, you know, 

what it would no longer allow is the- and what's- and 

it's, it's interesting because, you know, if we go back a 

couple of years, I think a lot of schools we put out awe put out an electronic announcement back in 2019, I 

think it was March about charges- about institutional 

charges versus non-institutional charges. And there were 

a lot of schools in the vocational or trade sector that 
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wanted to move away from, you know, from having to- from 

putting- from having book and supply charges as part of 

tuition and fees because, as you know, especially if you 

charge, upfront for those, they need to be prorated, if 

they're part of tuition and fees. And a lot of schools 

didn't want to have to do that anymore. but to the extent 

that schools still want to do that, what this would 

preclude with the exception of the- of romanette 1 and 2- 

romanette 1, which has been questioned by Barmak and 

others, would be to disallow practice of simply 

including- so the charge for tuition and fees, if your 

books currently and supplies are rolled into a tuition 

and fee charge, that's a- that's an institutional charge, 

right? Not a non-institutional charge. Institutional 

charge. The school does not need to obtain the student's 

permission to apply Title IV funds for that. So if I take 

an enrollment contract currently and it has tuition and 

fees, books and supplies, all that's in an enrollment 

contract and there's no other option for the student to 

purchase anywhere else, the school is saying you have to 

sign this. You must purchase from us, currently that's 

permissible. There is an opt-out provision that we have 

currently, but I'm- as it is now, you could do that. You 

could charge it as tuition and fees. No authorization 

from the student necessary. This would be- this would be 
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moving to a situation where, while the school could still 

provide- could still offer a kit, for instance, right? 

You could no longer include the cost of- I'll just use 

the word kit, as part of tuition fees anymore. That could 

be broken out, and the student would have the option of 

either purchasing it from the school or seeking it from 

an alternative source. And the student could still opt to 

purchase it from the school, but the school would have to 

obtain the student's authorization to apply Title IV 

funds for something other than tuition fees. I hope that 

clarifies.

MS. KLEIN: Sort of. But I'll goMR. ROBERTS: Jillian, is it okay if I 

just get Denise- I see her hand, so if there's anything 

to add to this, go for it.

MS. MORELLI: So I guess I want to 

understand where the negotiators are coming from, whatthe problem that we are trying to address here is that 

we've seen, a lot of abuse and had a lot of complaints 

from students when we're out, say, when I- when we're out 

in the field doing program reviews and also has come in 

through complaints. A lot of it is dealing with the- say 

like the cosmetology industry or other industries where 

they have like a kit and it's a mandatory, the students 

have to buy the kit. And I'm just using cosmetology 
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because it's one of the areas that I'm more familiar 

with. But they have to buy the kit from the school. And a 

lot of times that kit may be inferior. Students may be 

able to use their money elsewhere to buy the kit at a 

cheaper price and have the additional money then for 

other expenses that they need. And what I guess I want to 

get from the negotiators is when you're talking about 

whether it's hidden, I'm not sure whether in other 

instances- and we've also had situations where it's also 

book charges, right? They have to buy the books from the 

school. They can't go anywhere else. And the book charge 

is also on the student ledger and in the student 

enrollment agreement, with the charges being included and 

with the students required to pay. So, Jillian or anybody 

else, when you're talking about, I don't know, do 

schools, traditional schools or other schools just have 

it as part of the cost and you still have to buy the 

books? I'm not quite sure where the distinctions come, 

and we're seeing it where it is in the enrollment 

agreement and on the student ledger as separate charges. 

And students are having problems with it because there's 

been abuse and the students are getting ripped off in a 

lot of cases where they're getting inferior equipment, 

inferior quality, or they don't even get the books. Like 

I've had situations where that's happened. Students don't 
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get the books the whole entire time, but they've had to 

pay for them. So we wanted to try to address this problem 

by allowing the students to go outside of the school 

unless it's a safety issue or the other area that we talk 

about, where it's not available anywhere else. So does 

that help you at all, or is there other situations that 

we're not aware of where maybe it's included in tuition 

and you still are mandatorily requiring it, the book to 

be purchased from the school? I'm not sure exactly what 

you guys are getting at as to something different than 

what I'm describing.

MS. KLEIN: Yeah, I mean, I'll say- so 

a couple things. One, I think- I keep hearing you guys 

say the student is required, and I just want to be clear 

because I feel like you bury the lead a little bit when 

we don't talk about the fact there is an opt-out, which I 

know people have various feelings about. But again, there 

is not a scenario- there should never be a scenario at a 

school where there is not an opportunity for a student to 

buy books through whatever means they want to, if that's 

the decision that they choose to make. So I think it's 

important to retain that language all the time because 

students need to have that right and that needs to be 

disclosed to them. What I'm seeing in the narrative for 

this change is that the issue, I think, that the 
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Department has is around disclosure. So my recommendation 

would be, you know, as an institution, like I would like 

to see greater clarity from the Department around what 

would be an acceptable disclosure, whether that's 

disclosure to the student about what the fee is or 

disclosure to the student about what the books are. I 

mean, I feel like we do that really well here. I assume 

other institutions do as well. But maybe there needs to 

be more clarity around what the expectation is on an 

institution about what that disclosure looks like. And 

then you all as the Department holding institutions 

accountable for that. But I think, you know, if you look 

back at the preamble from 2016, when this was created, 

the Obama Administration said it's- there's, you know, a

compelling case to be made that this is a way for 

students to get access to books that they need so that 

they're prepared for their classes and also often at a 

cost reduction to students. And so the end of the day, 

like, I would love to figure out a path forward where 

this flexibility can be retained for students so that 

they have accessibility to books at a lower cost and have 

their books on the first day of class. Because I'll tell 

you that there are plenty of students who will just not 

buy their books. or they will not buy their books in 

time. And so I think there's been some advantages to 
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students being able to get these from their institution, 

as long as their institution is being clear about what's 

being provided to them, what the opt-out opportunity is, 

how they can otherwise get their books if they're 

publicly available. but if what I'm reading in the 

narrative is the issue is a disclosure issue, then I 

would like to figure out if there's a proposal we can 

come out- come up with that tackles that and still 

retains, you know, in some ways, things that I think can 

be really beneficial for students. I was confused in 

general by Greg's answer. I don't know how to articulate 

any different what my question was, but I think I'm 

confused by him- what I thought I heard him suggesting 

was cases where it's like a free book situation, where 

books are- like, you pay tuition and you get free books. 

But really, obviously we all know that institutions are 

probably bearing that cost in the tuition. Right? as 

opposed to like a separate, very clear charge to 

students, it's like, here is a book fee that you are 

paying to get your books. And here's how you can opt-out 

if you want to buy your books on your own. And I think 

I've taken too much time, so I'll stop.

MR. MARTIN: It's a separate- it is- I 

will clarify, it is a separate fee. It's not that it'sand probably in an enrollment agreement, it can even be 
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disclosed. This is the amount for books. But 

operationally we allow currently schools to include that 

as tuition fees, which essentially makes a book charge 

that would be non-institutional become an institutional 

charge. Whereas under this convention here that would no 

longer be allowed. Is that- does that help? No? Okay. I 

don't know if maybe- because it's not. It's not- it 

doesn't have as much to do with the fact that there's a 

tuition fee charging a book and supply charge. It's how 

those books and supplies are treated. Can they be treated 

as tuition as- essentially as tuition fees? 

MS. KLEIN: Yeah, it's definitely 

either you said it or I heard something that sounded like 

institutions are hiding this fee [inaudible]- 

MR. MARTIN: No, I don't thinkMS. KLEIN: -and so I want to be clear 

that that's not the scenario that most institutions are 

[inaudible]. I mean, the bad ones are, but like most 

institutions are making it clear to students what those 

charges are for books. And here's a separate fee that you 

can charge to get these books.

MR. MARTIN: Right. I mean, I think 

you're right. Most institutions are making it clear. I'm 

not trying to hide the fact that there's a book charge, 

but in- going back to what Denise said, in your- in an- 
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in enrollment agreements, we typically see the student 

signs and they are required to buy the books. There is 

the opt-out. I understand that, but upfront they're- the 

default is that they're required to pay the tuition fees 

and the book charge as part of the enrollment agreement, 

it being- and- the books being part of an institutionbeing an institutional charge. When there is the 

opportunity for students to purchase the books elsewhere 

up front, without the opt-out, then it is not an 

institutional charge, and that's what we'd be going to 

here. With the school obtaining the students permission 

to use Title IV funds to pay for books and supplies if 

the student opted to buy those from the institution.

MR. ROBERTS: Barmak, did you want to 

add- I saw your comment in chat. Do you want to preserve 

your spot in line to ask a new question of the Department 

or do you want to add to this discussion? 

MR. NASSIRIAN: No, it's this 

discussion. But there are others ahead of me I want to 

give themMR. ROBERTS: Yeah, I got you. Yeah, 

we'll get to you. Alright, Erika, I see- and I do just 

want to say D'Angelo is in on behalf of HBCUs, TCUs, and 

minority-serving institutions. But, Erika, you go ahead.

MS. LINDEN: Thank you. In general, I 
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want to say I support the ambiguity and the questions 

that Jillian's been raising. I have a slightly different 

question. and I know we're going to want to come back to 

the former, but my slightly different question was, thiswhat is a compelling health and safety reason? And if our 

concern has been about historical abuse in the past, what 

is it that a school would have to do to demonstrate that 

it is a compelling health or safety reason to now change 

this to a requirement that it come via the institution?

MR. MARTIN: Well, I would say the 

compelling health and safety issue number one is one 

we've had that's retaining when we currently have to 

understand that.

MS. LINDEN: Yeah, I understand that.

MR. MARTIN: But we've kept health and 

safety. What would be compelling? Well, I mean, I think 

there is certainly some- there's obviously some measure 

of subjectivity involved there. I mean, I think that it's 

one of those things where it would be incumbent upon the 

school to make certain that in saying it was a compelling 

health and safety issue, that it wasn't just an attempt 

on the part of the school to restrict the students 

options, that there really was some- I don't know how tomaybe if a certain- if a certain, you know, tool or 

product wasn't used, it would compromise the students, 
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would compromise the students' safety, or with medical- a 

medical program, it would compromise patient's health or 

something along those lines. I don't have an absolute 

hard and fast example of health and safety. Maybe my 

colleagues can jump in here, but it would certainly be 

something that I think- that would be open, you know, I 

mean, certainly a reviewer or an auditor would have the 

authority to look at what the student- what the school's 

rationale was for saying that it had- that there's nothe- due to this overriding health concerns, we're going 

to say that there's no other option for the students to 

purchase other than this particular item and through- and 

through us. I don't think it's an insurmountable bar. I 

think it would be pretty high because the school- I 

believe the school could even impose- you could say to a 

student, you know, in going out to look for- if you want 

to purchase whatever- whatever we're talking about on the 

open market from some other source that it be to these 

specific standards. You know, I mean, you could always 

stipulate that. So, I think it would be- it's not a low 

bar that we would be able to say that it would have to be 

a pretty compelling. But we've not offered any specific 

examples, but I'll open it up to David or Denise if they 

have anything further.

MR. ROBERTS: I see- Dave, your hand’s 
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up, please.

MR. MUSSER: Yeah. I mean, I agree 

with everything that you said, Greg. It would have to be 

a pretty high standard. There is one example that we gave 

in the preamble to the final regulations in 2015, which 

is a case where, for example, a marine biology program 

required certain kinds of scuba equipment and diving 

classes as a condition of enrollment. That's the sort of 

thing that, if the equipment is inadequate, it could have 

direct safety implications for students. And the school 

is essentially, you know, asserting and documenting that 

there is a certain level of equipment that they believe 

is necessary in order to ensure the safety of its 

students. That would be a case where the school could 

make use of that exception.

MR. ROBERTS: Thank you. Jason, you 

are up.

MR. LORGAN: Thank you. So I've 

maintained oversight responsibility for textbooks at 

different campuses for my entire 30 year higher ed 

career. And during the first two decades, I watched lower 

income students struggle to afford their textbooks and 

was told by many that textbooks were a problem for 

decades and I should just get used to it. And then in 

2015, the Department issued new regulations around books 
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and supplies, and for the first time, I began to witness 

real positive change in the textbook space. The success 

of the Department's regulations are hard to overstate. 

Data from the College Board, The National Association of 

College Stores, and Student Monitor all show one 

consistent new trend since the regulations went into 

effect. The amount of money our students spend on 

textbooks has declined. The irreversible price increases 

suddenly reversed. Even during the recent period of 

extremely high inflation. On my own campus before a 

program was created that leverages the current regs, only 

22% of UC Davis students self-reported that they had 

access to all of their required textbooks. During the 

most recent fall terms, 87% of UC Davis students had 

access to all of their required textbook content because 

of the innovation that was made possible by the 2015 

regs. Before the 2015 regs, students on financial aid 

often faced delays in getting their textbooks. That also 

goes for veterans and other third-party billing 

situations. After 2015, students on financial aid had 

access to their textbooks before the first day of class. 

This kind of progress is new and inspiring and 1900 

campuses have leveraged the regulations to make positive 

change, so this will affect a lot of us. The concerns the 

Department has voiced around transparency and disclosure 
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are important, and I believe these can be addressed 

without eliminating the innovative models that have 

developed on these regulations. I'd like to shift a 

little to the convenience these programs provide 

textbooks at their core intellectual property like music 

and movies. Prior to the current regulations, most 

college stores resembled Tower Records or Blockbuster 

Video. We sold individual physical products at individual 

prices. Consumers flat out rejected the Tower Records 

Blockbuster Video model of IP distribution and embraced

digital delivery models of IP such as Netflix and 

Spotify. The current regs allow educational institutions 

to innovate our processes, to react to the changing 

consumer IP marketplace and leverage the advantages for 

our students' benefit. Digital distribution now happens 

through the campus learning management system. And 

finally, to summarize, it's my belief that the apparent 

transparency and disclosure concerns the Department has 

can be addressed through language enhancements, as 

opposed to reversing the significant progress that has 

been made on the 1900 campuses that have improved their 

process based on the 2015 regs, particularly the students 

that rely on financial aid for their textbooks. Thank 

you.

MR. ROBERTS: Thank you, Jason. Before 
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I move to Dom, I just want to note that Magin is in on 

behalf of civil rights and consumer organizations. So 

with that, Dom, you're up next.

MR. CHASE: Thank you. Thank you for 

the opportunity to speak. Just would like to start by 

echoing something that Gillian had mentioned, which I 

think there is a solution here. It seemed to- from 

reading the materials that the concern is the 

transparency piece, but the proposal goes all the way to 

removing the capability of this. And this is a program 

that we do at Ivy Tech Community College. And I've worked 

with a number of other institutions on as well. And just 

like everything that the more you buy of something, the 

lower the per unit price should be. And this program has 

enabled us to become bulk purchasers on behalf of our 

students and advocate and negotiate for the benefit of 

all of them. And what we find overwhelmingly is that our 

students have reacted positively to this type of program. 

More than 80% of them, which we survey regularly report 

that it positively contributed to their academic success. 

And you can find study after study that would say similar 

things. But we know nationally, two-thirds of students 

have reported going without a textbook due to price. And 

in an eight-week model like at Ivy tech or a more modular 

type of terms that we move toward. you can't miss a day 
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of class without the textbooks. You need that equipment 

in order to be successful right away. So these are- this 

is a break-even operation. The revenue that comes in goes 

out for the costs. And it's something that we find to be 

very beneficial. So, what does this mean in terms of 

academic outcomes? We've seen positive academic outcomes. 

We measure passing grades, improvements in passing 

grades. And, we see better academic outcomes for 

economically disadvantaged individuals or groups of 

students as well. And I think if you- to kind of echo 

what Jason mentioned, if you look at the BLS, I know they 

lumped together textbooks with primary and secondary 

education, but the pricing has been relatively stable 

since around 2019. In fact, our per credit hour rate is 

going down this year from last year. And then we'll go 

down again in a time when core and headline are running 

pretty hot. So, would certainly support this language or 

finding an alternative- sorry, support keeping the 

language the way it is to allow these programs or finding 

an alternative that doesn't eliminate the capability of 

us being bulk purchasers on behalf of students so they 

have these course materials on the first day of class. 

Thank you.

MR. ROBERTS: Thank you. We'll turn 

next to Michael. Go ahead. 
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MR. CIOCE: Thank you, and thank you 

to all of the previous commenters who stole big chunks of 

my thunder. But so as I as I piece through what's left 

here, I think you know, Greg's explanation upfront 

definitely was more confusing to me from my initial reads 

of the paper. It sounds like both his example and 

Denise's example- and I get why they were cited, but were 

they- you both cited cosmetology examples, and I get why, 

the scuba one made more sense. But that's not what we, at 

least as a community college that has a pretty 

traditional student population uses our bookstore and our 

day one you know, fee charge for. So to- back to 

Jillian's point, if this is more tied to disclosure and 

authorization- active authorization versus sort of 

passive opt-outs, you know, we've been running an 

operation here for five years, and we've had like zero 

opt-outs. We had zero opt-outs in '22, '23, and we had 

zero opt-outs in the fall of '23 and we had zero- so, I 

get what- I think I understand what the intent here is, 

but the red line, all- everything that's been stricken in 

the document actually does more harm than good. So, I 

think if it's a disclosure issue, I would get behind it a 

lot stronger. But I'm more confused now than I was when 

the day started. So, I'll yield my time.

MR. ROBERTS: Alright. Thank you, 
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Michael. Magin, please.

MR. SANCHEZ: Yeah. So, I mean, 

reading this in particular really stands out to me 

because I know most- myself, most of my friends, you 

know, at the college I went to we had an Inclusive Access 

program, and more often than not, the textbooks that the 

university would offer, I would be able to find cheaper 

on Amazon. Right. And so I- while I understand the intent 

of this, I think more often not, right, it's- it doesn't 

necessarily do what it's trying to do. I know there was 

support in 2020 by PIRG, where they found that when they 

were looking at public existing contracts, it tended to 

be that the books that were offered on- under these plans 

would be [inaudible] students were being charged more, 

right, than what was considered the average of that year. 

And so I'm concerned about the effectiveness of these, 

you know, Inclusive Access type programs. And that's 

where I think it's valuable the language as being 

proposed. But I am a bit concerned about the compelling 

health and safety reason, like exception there, in part 

because I can imagine an example right where, say, you're 

a student, you're incarcerated student, right, and your 

only access point is the kit or the book offered by that 

institution where you're at. There isn't transparency 

there to say that that book you're being offered is at a 
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fair price or whatnot. So I'm a bit worried about 

institutions, bad actors could take advantage of that and 

take advantage of students who may not necessarily 

understand, or may not know what they're being charged in 

that case. So a big concern on that front. But I- in 

regards to specifically the opt-in versus opt-out debate, 

I do think that it's important to give students choice in 

this matter. Thank you.

MR. ROBERTS: Thank you. Barmak.

MR. NASSIRIAN: So I want to start by 

pointing out that I'm very respectful of the experiences 

that colleagues from campuses have shared. And I 

understand that again in benevolent hands, a lot of good 

can be done this way. But to clarify what we're talking 

about, we are talking about a second round of automatic 

billings that are distinct from tuition and published 

tuition amounts. Now we run- at VES, we run a help line 

for student veterans who have run into issues. And it's a 

persistent complaint that you know, the place said 

tuition is X, ten grand. And then lo and behold, there 

was an additional two grand in books and supplies 

automatically charged to my account. That's the issue. If 

anybody- look, if something is such a compelling 

necessity as to constitute, you know, it's a parachute 

jumping class and I don't trust anybody else's parachute, 
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but the one I give you, well, you know, put it in as a 

freebie and jack up tuition and that's your tuition. And, 

you know, the supply is- that's not what we're talkingwhat we're talking about is the idea that the student is 

communicated one price, and then they find out that a not 

insignificant amount of additional charges have been 

stacked on, particularly for entirely frivolous reasons, 

things that are, you know, a barber shop, you can't use 

this kind of razor. You need to use that kind of razor. 

It's available elsewhere. You know, I don't know, is that 

Bob Dylan song, what price I have to pay for going 

through all these things twice? The Department has been 

down this road with the same rationale. Let us have 

preferred lenders lists because we will give a better 

deal to students. Remember that from a few years back? 

You are not regulating just the for-profit vocational 

sector. You're regulating the five mega publishers who 

dominate 80% of the textbook industry. And they are very 

much using these exceptions as a rationale to get 

institutions to act as gatekeepers and hand over their 

students. The fact that you have zero opt-outs is 

troublesome because it says opt-outs don't work. Either 

opt-outs are easy or they're hard. If- we need to always 

think about the agency of the party footing the bill, the 

student is the party footing the bill. If you're so 
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benevolent as to believe without these materials, the 

student couldn't possibly succeed, jack up tuition and 

include it as a freebie. That is allowed. But if you want 

to announce one tuition and then claim that something is 

such a necessity that it can only be secured through you 

and automatically paid for out of the student's pocket, 

you're kind of making it a little different argument. I 

acknowledge that some people can use this very 

benevolently, but I also point out to the Department 

that, you know, honest graft degenerates into dishonest 

graft really quickly. And it has in this case, I don't 

want to cite chapter and verse, but you can all go to 

Inclusive Access, which is the euphemism for let us pay 

ourselves first, Inclusive Access.org, and you will see 

plenty of mainstream academic organizations endorse the 

idea of allowing the students to opt-in if something has 

to be charged. But in general, the idea of letting 

institutions pay themselves- [30 seconds]. Thank you.

MR. ROBERTS: Greg, I see your hand

up, and I just want to note that we've got Scott coming 

to the table to ask a question on behalf of private 

institutes of higher education.

MR. MARTIN: Okay. I- my purpose for 

wanting to speak is I just, I think I want to ask the 

group a question about something I'm a little confused 
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about, which is I don't- and this- I don't perceive in 

making this change what how we are- what I want to say is 

materially interfering with the school's ability to offer 

what they want to offer or what institutions feel that 

this rule takes away from them? Because I want to- I'm 

going to point out that in the instance where a school 

believes that it is providing- we're not taking away the 

school's ability to offer whatever it wants to offer. 

Going back to Barmak comment about an opt-in versus an 

opt-out, the student could still opt-in to purchase from 

the school. And if the school is providing these supplies 

or this kit, whatever you want to- however we want to 

refer to it, at a discounted or reasonable price, then I 

would submit that most students will opt to purchase from 

the institution and that these- this rule change does not 

preclude that in any way. All that would require is that 

the school obtain much as what happens in the traditional 

sector, where the school obtains an authorization from 

the student to allow Title IV Aid to be charged or rather 

to be used against books and supply charges. So, and 

that's a relatively pro forma thing to get. You get it up 

front when the student enrolls. You don't need to get it 

again for the remainder of the student's matriculation. 

So I- inasmuch as this doesn't- the only thing that this 

would change is the current situation in which a school 
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can essentially without the, exceptions notwithstanding, 

can require a student to purchase the books and supplies 

from its- from itself as opposed to other sources out 

there. And our contention is that students should be free 

to pursue the possibility of purchasing from another 

source that may be more beneficial, cheaper, and we 

believe that if the school really is offering the best 

bet for students, that that's what the students will opt 

for. I do understand the argument that, you know, 

including everything up front and having the students pay 

for it could go- you know, might be a step toward making 

certain that everybody has everything on the first day of 

classes and that there could be those students who, for 

whatever reason, you know, if it's not prescribed, don't 

ever purchase the books or don't get what they're 

supposed to get. I think some of that or a lot of it 

could be taken care of, you know, in counseling students 

and being upfront with them about the fact that it is 

absolutely necessary to have these materials on the first 

day of class. And I think that if a school really is 

offering these at a much better price and a much- in a 

much more- in a much easier way to get the most students 

would opt for that. So I'm just curious as to how this 

rule is pejorative to institutions providing those 

materials.
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MR. ROBERTS: Thank you, Greg. We'll 

go to Jillian next.

MS. KLEIN: Yeah. So- sorry, I'll try 

and be brief, and I already went once. So a couple 

things. One, I think Greg what- maybe I misheard you 

again. I think what I just heard you say is an 

institution can have a student opt-in to having Title IV

cover books and supplies when they start their program, 

and then the institution never has to provide any more 

information to the student during the life of their 

career in order to do what we're talking about, which I 

think that's what I heard you say, which I would say- 

[interposing]

MR. MARTIN: Right. So what it is, 

what I'm saying is the student- the school would obtain 

an authorization from the student up front that would 

allow the school to use Title IV Aid to cover the cost of 

books and supplies and then for the remainder of the 

student's matriculation at that school, at the school, 

the student- the school could, with the student's 

permission, can apply Title IV Aid to those charges.

MS. KLEIN: So I would say- so to me, 

that's a thousand times worse than what you're proposing 

to get rid of. Because what I just heard you say is like 

a student can blindly sign on to having Title IV pay for 
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these book charges, and then never get any other 

information from the institution about what exactly it is 

that they're getting. I mean, I can't believe that we're 

in this world. This is what we're talking about. 

[Interposing]

MR. MARTIN: It's- I would disagree 

with you, Jillian. It's not blind at all. The student is 

saying- is authorizing the institution to use- it's a 

convention used across almost every- if you're looking at 

like, community colleges, two and four-year institutions 

that we use currently. What is the instrument that allows 

a student to go to a bookstore at the university and 

purchase any type of book or supply and allow Title Four 

Aid to pay for that? It is that- is that convention that 

facilitates that. Without it, it wouldn't be possible. 

MS. KLEIN: Sorry about my light. But 

I guess I would say that seems less transparent to a 

student than I think what, you know, what I'm trying to 

represent from an institutional perspective. And I thinkand there was some comments in the chat, which I know I 

started to mention that, but I think Barmak said this, 

and it's also in the chat about, well, an institution 

could just put books- give free books and sort of hide 

that cost.

MR. MARTIN: I don't think we want to 
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go so far as to say that's acceptable. 

MS. KLEIN: Yeah. So that's what I was 

gonna say is it's definitely not a best practice. I don't 

think that's what's currently happening at least like in 

our institution. We still- if a student wants to opt out, 

we still find a way to siphon off part of that and send 

them a refund. But we should definitely not be also 

writing rules that create that scenario where that is 

okay. So I want to be careful to make sure we're not 

actually creating other bad behaviors in trying to solve 

for whatever it is that's happening here. I think Barmak 

again, you made a comment about students being surprised 

by a fee that shows up, and I totally hear you. And 

that's a terrible situation. But again, it gets me back 

to the comment about disclosure. And would you feel so 

strongly about that if it was a scenario where an 

institution is doing what they should be doing and 

saying, this is a materials charge, here's what it 

contains. We have assessed that this is the cheapest 

place you can find it. I think the comment about books 

being more expensive than what's on Amazon, then the 

institution is not following the requirement, because the 

requirement is that regularly an institution is making 

sure that books are being provided- materials are being 

provided at a cost lower than what the student can buy on 
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the market. And for us, we go to Amazon and we Google it. 

We look at other sources of places that students can find 

it. So I would say in that instance, the institution 

really is not doing what the requirement already says 

that they should be doing. And then my last thing I'll 

say is just the comment about that piece in general about 

if institutions are documenting and I'm going to probably 

get fired for saying this, but I'm saying it anyway. If 

institutions are documenting a lower cost point and optout and all those things, we keep records of doing that 

here at our institutions, I'll tell you, we've never been 

asked for those by an auditor or by the Department. And 

so there is maybe like a piece of what is the expectation 

on the institution. And then how can the Department and 

other third-party auditors make sure that they're holding 

schools accountable for those requirements, to make sure 

that we're providing a pathway for this, and also that 

institutions that are not doing what they're supposed to 

be doing are held accountable also. I promise I'm done 

now.

MR. ROBERTS: Thanks, Jillian. I'm 

appreciative of the dialogue thus far, but just glancing 

at the time and the volume of reg text we'd like to get 

through today, I would request that we take Jessica’s, 

Scott’s, and Jason's comments and questions and then move 
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on to number four in that list, if that's alright. So 

with that, Jessica, please go ahead.

MS. MORALES: Hi. So- and I- obviously 

I'm getting a little bit confused between what's been 

said. I think Greg, and maybe this is what Jillian was 

understanding, please, if I'm incorrect. So are you 

saying that literally once a student opts in, or once a 

student says, yes, you know, this is okay, then at no 

other point will there be a touch base for that student 

to say, nope, don't use those funds.

MR. MARTIN: No, no. Under the current 

system- so currently what the authorization does is not 

allow a student to it's not it does not permit a school 

to simply charge students every semester. It simply 

provides the conduit through which Title IV Aid may be 

used to apply to books and supplies. Right? So given a 

traditional model, when you were at university, right? 

You go in and you- and let's just say you were going to 

purchase from a bookstore, you could go into the 

bookstore and you could purchase books. And if you have 

Title IV Aid, then that aid would be- that aid would be 

charged- would be credited against those charges. The 

instrument that allowed that was that authorization, only 

needs to be obtained up front. But you're still making 

each time you do it the conscious decision to purchase 
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from said institution or not. You know, you could you 

could give that authorization and decide this semester, 

you know, no, I'm not going to the university bookstore. 

I'm going to one that's- another one, a private one in 

the university town, or I'm going to get them online, 

however else you're going to get them, right? In this 

situation, the authorization obtained from the student 

would be so that they could apply Title IV Aid to those 

charges, but it would still have to be the student's 

decision to purchase. And they have to get that conscious 

decision from the student. Yes, I want to purchase the 

kit from the institution. Yeah, that would still be up. 

It would not allow for school to simply charge a student 

every, you know, every so often. Now in many cases the 

books, the kits for certain types of programs are 

obtained up front and one time. So in cosmetology 

generally that's done once and then you have the 

remainder- [interposing]

MS. MORALES: Okay. Sorry for that 

confusion.

MR. MARTIN: I'm sorry if I confused 

people on that note, but- [interposing]

MS. MORALES: And I just think that in 

that same context, obviously, in terms of the student 

being able to decide the opt-in option is actually what 
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is beneficial, what would likely be easier for students 

and institutions if a student could say, yes, I can get 

it from there or not. And the only other thing, only 

concern I would have is, I think somebody else raised it 

earlier about the institution demonstrating that there's 

a compelling health or safety reason. I think that- I'm 

not quite sure how or what the standard would be for that 

to really say that there is a compelling concern or not 

otherwise you- if you tell a student, I think somebody 

mentioned the scuba diving, if you tell a student you 

need this one or else you can potentially die, I'm pretty 

sure a student will make the likely decision to choose 

the one that they need so they don't die. But 

nonetheless, I think that this is student funds and 

should be able to use it accordingly.

MR. ROBERTS: Thank you, Jessica. 

We'll go to Scott next.

MR. DOLAN: Yeah. Thanks so much. Like 

others, I am a little confused in terms of the 

conversation we've had about the language from what we 

saw that was shared to where we are now. With that said, 

I think some of the negotiation I'm hearing is really 

about a difference between what needs to be disclosed on 

the front end, which we all, I think are in agreement of 

we can potentially refine. And how do we enforce existing 
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regulation to- against bad actors who are maybe doing 

something that we don't think they should be at the risk 

of our student consumers? So, if a cosmetology school or 

scuba school is offering texts at higher rates than what 

is available in the market, that's an enforcement issue. 

It's not, to Julian's point, not really aligned with the 

regulation as written. Or if they're not of the quality 

as determined by the consumer, that would be a question 

that could be raised as well. So it seems like, one, 

confusion around what the proposed language will actually 

look like based on the conversations, but, you know, 

would be the mind to maybe think about what disclosure 

looks like on the front end and keeping regulations that 

allow institutions to be bulk purchasers and allow 

students to opt-out would be a little clearer about what 

they would need to do on the front end in order to 

disclose that this is the model that [inaudible].

MR. ROBERTS: Thank you, Scott. And 

we'll conclude our number three with Jason.

MR. LORGAN: Thank you. So I wanted to 

answer Greg's question if I could. So he asked, what 

about the current regulations would prevent institutions 

from moving forward with this? So I want to- there's 

really nothing that would prevent an institution from 

moving forward with this, but it would potentially 
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dramatically increase the price and the difficulty to 

administer such a program. So in an opt-in- so let's- you 

know, UC Davis has 3500 courses per term. So let's just 

take one course and it has 100 students in it. And we go 

to an opt-in model. That means there's 100 transactions 

that the institution has to do for those opt-ins, and 100 

transactions that the publisher has to do to arrange for 

that student to have access in the learning management 

system to that content. In an opt-out model like they 

have here, there's operational efficiency built into the 

model where every student gets free access to all of the 

content through the add/drop period. And so then all of 

the students who choose to opt-out, it's a 60-day opt-out 

period at UC Davis. You can make your decision and change 

your mind ten times if you'd like. At the end of the 

add/drop period, the students who opted out, all 

thousands of those, and unlike some of the others on this 

call, thousands of students do opt-out at UC Davis. we 

send that one spreadsheet to the publisher, and they turn 

off the thousands of students access all at once in one 

transaction, versus hundreds of thousands of transactions 

of individual students in individual courses, turning on 

and off access. So it wouldn't prevent, but it's an 

incredibly operationally efficient model. And that's why 

I think we've seen price declines year over year in 
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textbooks since the regulations went into effect. And I 

will add, for the 50 years before the regulations went 

into effect, every solitary year, the average price that 

students spent on textbooks went up.

MR. ROBERTS: Okay. Thank you, Jason. 

Thank you to all the other negotiators for offering your 

commentary on this issue. Greg, do you- would you like to 

move on to number four now, the credit balance?

MR. MARTIN: I would. Before I do, I 

want to thank everybody for that discussion. It was 

really, really good. We got some great points there which 

we will take back. I also want to make a clarification. 

When I mentioned student authorizations, I do want to 

clarify and one of my colleagues, you know, reminded me 

of this, that, students do have the authority to rescind 

any student authorizations if they want to, that they've 

given, even though they can be obtained up front for the 

duration of a student's matriculation, students can 

rescind. And schools can also choose to collect those 

more frequently than once, if they wish to do so. So 

that's just a point of clarification there. Yeah, so, 

Brady, we're going to move on to number four. And that 

can be found on page two of your issue paper. And Vanessa 

is taking us there as we speak. And let's take a look at 

that. This provision would be to require institutions to 
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issue a credit balance to any student that receives Title 

IV and has an amount of aid in excess of tuition and 

fees. This is under 668.164(h)(1). Reviewing this, when a 

student receives aid from various sources, including nonTitle IV financial assistance in excess of allowable 

charges, institutions are only required to pay students a 

credit balance if the Title IV funds received exceed the 

charge on the student's account. When students pay 

amounts in excess of allowable charges but there Title IV 

funds received do not exceed the charges on the students 

account, this can result in the student not receiving a 

credit balance. This proposal would change the definition 

of a Title IV credit balance to also take into account 

non-Title IV sources of funding if a student receives 

Title IV assistance. In such circumstances, any funds 

exceeding tuition and fees would be required to be issued 

as a credit balance within 14 days of the balance 

occurring on the student's account. So let's go to the 

applicable part of the regulation. And we can see that at 

the top of page six. And Vanessa is already there. And 

that is in 668.164(h). So let's take a look at that 

language. And this would change the definition of credit 

balance from the existing definition found there, as 

follows: A Title IV HEA credit balance occurs when the 

amount of Title IV HEA program funds and any other 
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Federal or non-Federal funds, including but not limited 

to scholarships, grants, private loans accredited to a 

student's ledger account for payment- for a payment 

period exceeds the amount assessed the student for 

allowable charges associated with that payment period as 

provided in the paragraph C of this section. So that is a 

change over what we currently have. I want to spend a 

little bit on why we're doing this. Currently there 

exists a- I do believe that many schools, maybe most, 

simply have a policy that, where a credit balance exists, 

they relieve that credit balance or refund it to the 

student, however you want to say it, within the 14 days 

prescribed in our regulations. However, as you know, the 

current credit balance only- the current definition of a 

credit balance is only where Title IV funds exceed 

allowable charges. So it is possible in situations where 

a student obtains a significant amount of Title IV 

funding and may also obtain- I'll just use maybe Veterans 

Administration funding as a- as an example. The student 

could have $4,000 of allowable charges and get $4,000 of 

Title IV assistance and $3,000 of VA assistance. And as 

we all know, that would constitute a credit balance, but 

not a Title IV credit balance. And in that case, we would 

have no- we don't have any regulatory link or regulatory 

authority there to use to compel that school to refund a 
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credit balance. So this would address situations like 

that and we feel would be a lot more fair to- be a lot 

more fair to students.

MR. ROBERTS: Alright. Any questions, 

comments, feedback to the Department? Anything for the 

committee to consider? Yeah. We'll start with JoEllen, 

please.

MS. PRICE: Okay, so just have a quick 

question. The explanation of it talks about excess of 

tuition and fees, but the- but it's also written in 

excess of allowable charges. So I think it's written 

correctly in the, regulatory language. But I just want to 

make sure that we don't get caught up that is it beyond 

allowable charges or is it beyond tuition and fees?

MR. MARTIN: It is allowable charges. 

That's correct.

MS. PRICE: That's what I figured. My 

other question is, what happens when we cannot deliver 

those funds? So right now, if we cannot deliver a Title 

IV credit balance within a certain amount of time, we 

have to return it to that program. What happens in the 

case of non-Title IV Aid? Will there be the same rules in 

place? So, I don't understand how we're going to handle 

that piece of it.

MR. MARTIN: Do you mean where you've 
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attempted to relieve a credit balance that now is in 

excess of Title IV funds? And while you were unable to 

relieve the Title IV credit balance, you would return 

what you could to the Title IV- to the Title IV programs. 

What would you do with the remaining funds? I- well, 

first of all, the- with those- I would default to 

whatever the requirements for were from that funding 

source as far as how you would return those funds when 

you- our primary concern here and I'll be honest with 

you, JoEllen, we didn't really maybe think it out to that 

extent. Our primary concern here was to get institutions. 

And I think that- and I want to say up front, I think the 

vast majority of institutions are very up front about 

credit balances and get- and they're serious about 

getting all credit balances to students. So, this is 

definitely to control actions from either schools that 

are bad actors or just not being attentive to getting 

these balances to students. We would certainly look for, 

you know, the school alleviate- trying to relieve the 

credit balance. And I think that's our main thing. Did 

the school try to relieve that credit balance to the 

student, make every attempt to do that and do it within 

the requisite timeframe? I don't at this point know what 

else I could list in my example of VA funds, you know, 

what would you do to return to the VA? I think you'd have 
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to follow the protocols in place for that. And I see 

David has his hand up, so he might have a little bit more 

to add with respect to that. So, Dave. 

MR. MUSSER: Yeah, thanks, Greg. I 

think the Department's authority extends only as far as 

the administration of Title IV funds. So in any case 

where you've exhausted the entire amount of Title IV 

funds that the student has received for that period, so 

you've tried to provide a credit balance to the student. 

and you've essentially returned all of the student's 

Title IV funds to them, Greg is right, that there is 

there's really nothing further that our regulations 

compel you to do. You would then look to the requirements 

of whatever the other grant or scholarship, you know, 

demanded in order- in terms of getting the funds back to 

the student in a particular period of time. If that 

wasn't 14 days or if that was a longer period, then you 

would go to that. But for the- for purposes of the Title 

IV programs, you would essentially pay all of the 

student's Title IV funds to them as a credit balance, and 

then you have discharged your obligation to the student 

as far as our programs are concerned, if that- if the 

credit balance is really that large.

MR. MARTIN: And I think it's

important to point out that, like, you know, what Dave 
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said, like in my- so in my example before, currently 

there wouldn't be a credit- there would not be a Title IV 

credit balance. There would be no credit balance we would 

control. And under these new rules, that credit balance 

would exist and there would be a- $3,000 credit balance, 

which we would expect to be paid to the student. And 

since that's less than Title IV, then the total Title IV 

funds out there, if you could not return that to the 

student, be given back to the Department because it's 

still less than the total amount of Title IV funds. So it 

does- I think in any case, it works to the benefit of the 

student and it works to the benefit of the programs. And 

I don't think that the rule- for any school that's 

operating- as I said before, doing what they're supposed 

to be doing, and getting credit balances to students, I 

don't think this affects them- this will affect them at 

all.

MR. ROBERTS: Alright, Jillian, I see 

your hand next.

MS. KLEIN: I wasn't even going to ask 

a question because, I mean, I agree with you, Greg. I 

think most institutions already do this, but I'm just 

sort of curious. I'm trying to figure out the 

Department's- like, there could be a scenario where the 

student's Title IV that they received is less than what 
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the credit balance is that's being returned to the 

student. So I'm trying to figure out the Department's 

authority to say that they- that institutions have to 

also release within a certain time frame that credit 

balance to students, even though, to Dave's point, it 

might not be actual Title IV funds at all. I mean, I 

don't really care. I don't know what I'm asking, except 

I'm just I'm just curious on authority.

MR. MARTIN: Our authority. I can 

always defer to Denise with legal authority here, but I 

think our authority was in the fact that really there's 

no- the way we currently define credit balance again 

where allowable charges- where Title IV funds exceed 

allowable charges. Even if that's not the case, so the 

Title IV funds don't exceed allowable charges but there 

is a credit balance because there's other types- in my 

example there's VA funds, right? So because of the VA 

funds and the Department funds and Department funds, we 

have charges. We have aid in excess of allowable charges, 

we're basically saying that if Title IV Aid is involvedif there's no Title IV Aid involved, then we have no 

authority, right. But where Title IV Aid is involved, 

there- we don't have any first in, first out provisions 

in our regulations as to what causes a credit balance, 

right? We don't dictate that. We don't say that, well, 
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this came in first, so this caused the credit balance. 

The credit balance exists. And so if the credit balance 

exists and contains Title IV funds, we're not looking to 

what caused that credit balance. There are Title IV 

funds. There is a credit balance. Therefore, Title IV 

funds could or are part of that credit balance, we're 

presuming that that they are. So that's really our 

authority for it because there is a credit balance and it 

does consist of- potentially consist of Title IV funds. 

And there's no way out of that by saying, well, we- yes, 

but we credited Title IV funds first and then we credited 

VA funds, therefore not. So because- [interposing] 

MS. KLEIN: I'm not saying that 

scenario. I'm saying a student gets $10 in Title IV 

funds, and their refund that's owed to them is $100. I'm 

trying to figure out how you have authority to require an 

institution to disburse $90 to the student that came from 

non-Title IV. So again, I think this provision is fine. 

I'm not mad about it. I'm just- I just have a question on 

the authority piece, but it's- maybe we can talk about it 

a different time just for fun. 

MR. MARTIN: Okay, well put it in the 

chat and we'll definitely review it.

MR. ROBERTS: Alright. Moving that fun 

conversation maybe to a later date. Greg, do you want to 
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move on to number five?

MR. MARTIN: If we are done with 

discussion on number four, yes.

MR. ROBERTS: I don't see- oh, sorry. 

We do have additional discussion. DC, I see your hand.

Dr. Prince: Yes. A question onagain, this is a process on the credit balance. So to be 

clear that if a student gets Title IV Aid and they have 

what we call a refund but a credit balance, then you 

expect us to disperse that. Now, the question I have for 

the Department is why- has there been discussions about 

the amount of credit balance given to a student that 

either does or does not exceed a certain amount based on 

what they might be? Because if you add- I can see in a 

scenario where with this including other non-Federal aid, 

a student could get a higher amount on a balance, which, 

let's just say, is a larger percentage of COA. So say 

it's 15 or 20% of COA they might get in that. Has the 

Department really thought about financial literacy in 

this more so around cutting and saying that that if Title 

IV funds are used, a credit balance can't go back to the 

student if it exceeds 5%, 10% of the overall amount based 

on an equation, or is this more so whenever it's used, 

whatever the credit balance is? Because it just seems to 

me that we're not addressing more of the bigger issue, 
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which is the financial piece, financial burdens kinds of 

things rather than more of a process-oriented piece here 

towards institutions.

MR. MARTIN: So the thing- the reason 

for this is, is simply to get- is simply to have- to get 

credit balances, you know, released to students is to 

change the rules in such a way that a credit balance- the 

existence of a credit balance is not completely 

contingent upon Title IV funds exceeding allowable 

charges. That's really what this is about because in the 

in the example I gave where I think I said there were 

$4,000 of allowable charges, $4,000 of Title IV, and 

let's just say, $3,000 of VA, you've got $4,000 of 

allowable charges, right? You've got $7,000 of aid that 

has been dispersed to the student. You have a $3,000 

credit balance, and there was $4,000 of Title IV Aid. So, 

what we're saying here is that in that case, we would 

require- because the entirety of that credit balance, as 

I said before, when I was discussing with Jillian, the 

makeup of that credit balance is really impossible to 

determine, right? I mean, we know that in my example, 

there were VA funds and there were Department funds. So 

the credit balance is comprised of some combination of 

that. We don't know what it is because we don't have any 

order of posting rules, and we're not going to put in the 
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end. So, you know, could you say that, well, all $4,000 

was covered by VA, therefore there's $3,000 of Title IV? 

You know, you could call it that way. You could call it 

either way. So what our contention here is in making this 

rule, it compels the school to simply return to the 

student the entire $3,000, which currently the school 

could say, well, yeah, I've got $3,000 of a credit 

balance on the account here, but your rules don't make me 

do anything. Your rules simply say, I have to look at 

this and say, do Title IV- do a- does Title IV Aid exceed 

allowable charges? And the answer in my example is no, it 

does not. They equal allowable charges. So you could come 

back to me and say- I'm not saying you would do this 

because you- I'm sure you would refund all the money the 

student. But hypothetically, for purposes of your 

question, you could maintain that well, there is no 

credit balance. I'm not obligated to do anything, you 

know? And if that being the case, then there's now $3,000 

of potentially Federal money sitting on a student's 

account and the school. And because I don't believe there 

are any- if there's no requirement on the part of the 

other organization to refund, then at that point, the 

school can simply hold on to it. I don't know how many 

schools are actually keeping it forever, but certainly a 

lot of schools are delaying it. Under this, what would 
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have to happen is that $3,000 goes back to the student 

within 14 days. So I don't think it- I don't think that 

it prejudices the schools in any way and you know it gets 

student money. This is all student money. So I mean 

whatever they're going to wind up spending it on. And we 

absolutely hope that that will be educational expenses 

when they get it. It can't be anything but good for the 

student because it is the student's money. And they can 

use it for any- any number of educational expenses. I see 

Denise has her hand up and wants to- maybe wants to 

clarify a little bit. So I think I should have Brady go 

over to Denise.

MR. ROBERTS: Yeah, Denise, go ahead. 

I think you're on mute right now, by the way. You’re 

still on mute.

MS. MORELLI: Okay. Can you hear me 

now? Am I on? Okay. Alright. Keep hitting the wrong 

button. So I just wanted to kind of give a background on 

this. As Greg said, most schools are doing this. But what 

we found in our compliance work is that other entities of 

especially Federal and a number of state funding or 

tuition only. Some of the ones I've run into are VA, 

right, VA funds that go to the schools. They know they 

have housing funds as well, but the ones that we were 

dealing with are tuition only. WIOA funds, tuition only. 
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TAP scholarships, FIA scholarships, they're tuition only, 

right? So what we've run into were situations where nonreputable- not so reputable actors have tried to make the 

argument that you're only supposed to be looking at your 

Title IV funding. And so we would even- years ago, I went 

back to farm workers at Department of Labor and say, 

okay, are you going to get your money back? Because the 

Title IV funds can go not only for tuition and fees, but 

for living expenses, right? So we want to make sure the 

students are getting that living expense money if they 

can. And what we found is the majority of other aid 

that's coming into a student's account is for tuition 

only. So VA doesn't ask for it back. WIOA doesn't ask for 

it back. Farmworkers doesn't ask for it back. So what 

ends up happening is these not reputable schools would 

try to get us on technicalities and say, alright, well, 

it doesn't technically meet your credit balance, but they 

were keeping $5,000 of VA money, $4,000 of Title IV 

money, $3,000 of WIOA money because none of the agencies 

or the other entities were asking for the funds back. So 

basically we don't really tag it as Title IV. As Greg 

said, you know, there's not any first in first out 

because that would create a problem as well. But we're 

trying to address our situations where the other funding 

is tuition and fees only. So that goes to the tuition and 
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fees. And we want to get the living expense money back to 

the students. So we want to make sure there's nothing in 

our regs that creates a loophole, which is what we were 

seeing happen before when we were trying to do our 

compliance work. So that's the background of why this 

provision is being proposed.

MR. ROBERTS: Thank you. Denise. we 

have two alternates coming to the table, both with 

questions. The first is Zack Goodwin on behalf of 

financial aid administrators. And the second is Ashlynne 

Haycock-Lohmann on behalf of groups supporting veterans. 

So I see Zack's hand first.

MR. GOODWIN: Thank you, Brady. It'shopefully it will be okay that I actually have two 

questions. And I'm getting real in the weeds here. but a 

couple of concerns I had, especially being at a public 

institution, is about escheating, that if these are 

considered HEA credit balances, we often have counted on 

when we're not able to get funds to a student, we attempt 

for the allowable period to get some credit balance to 

the student's hands, and we can't, checks come back, 

deposits are rejected, that kind of thing. We will 

usually eventually allow that to escheat back to the 

State of Nevada. But if that is now an HEA credit 

balance, do we foresee that being an issue? That's 
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question one. And the question two is even nitpickier 

because this has to do with, what seems like a broad 

range of possible funds, including other and not limited 

to. I would want to be sure that the intent there is not 

about student payments, that we're just talking about 

financial aid from other sources. And I say that because 

students will often pay- you know, they'll register for 

spring, say, in October or early November. If they want 

to make a payment toward that, then they absolutely can. 

But if it creates a credit, even if just a temporary 

credit, I would like to be able to hold those for those 

students since their intent was to pay for a future term. 

Hopefully that makes sense.

MR. MARTIN: Yes. As a former training 

officer, I guess you- I have to let you go into the weeds 

because that's what people in that position often do, 

right? So- and it's great to see- it's great to see your 

face again. Your second question is the easiest one to 

answer. It's only program funds. So no, it would not be 

inclusive of any funds the student paid as far as cash to 

the school goes. So that one's very easy. Your second 

question is a little more weedy, obviously. We do- we are 

defining this as Title IV HEA and credit balance. So by 

definition then it would- by definition what we have here 

preclude escheating. However I will- it is a- it's an 
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excellent question. And make sure you put it in the chat. 

We will take it back and discuss that.

MR. GOODWIN: Thank you very much, 

Greg.

MR. ROBERTS: Thank you. And I'll turn 

it over to you. Ashlynne.

MS. HAYCOCK-LOHMANN: Less of a 

question, more of a comment. But one thing I really 

wanted to flag as a major issue in the veterans space is 

that oftentimes, GI Bill benefits paid are paid 

significantly later in the semester. Many school 

certifying officials opt to wait until after drop, 

add/drop, or much further into the semester to certify 

tuition and fees. But this also leads to schools refusing 

to release Title IV funds to that school- to that 

student, even though they know they will be receiving 

that GI Bill money. It also causes late fees for our 

military-connected students because instead of allocating 

that Title IV funds to things like room and board and 

other fees, that money is being temporarily held under 

tuition until the VA pays, when that money could be 

immediately allocated in a way to prevent late fees for 

our students.

MR. MARTIN: Yeah. I would address 

the- I think that, first of all, I want to say upfront 
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that, you know, we, although the disbursement rules are 

somewhat flexible for our programs to, you know, allowing 

students to schools to disperse at any time during the 

payment period, we- there is a Pell requirement that the 

school disperse funds in such a way that, I think it's, 

if I can paraphrase it, in accordance with the needs of 

the student, and we generally take that rule and apply it 

to all Title IV funds. So where a school is delaying the 

disbursement of Title IV funds for some other reason, 

whether it's to- for whatever it is at a convenience or 

to be able to assess more fees or something along those 

lines, that is an inappropriate practice and one that the 

school risks being called out on by program reviewers and 

auditors. So I'm not in any way in favor of that. I do 

want to say that, the- or I want- obviously, I'm not in 

favor of it. I want to come out against it. The- yeah, 

then there is a possibility that another source of aid 

disperses later on. But remember that the creation of a 

credit balance is an accounting terms, just when that 

disbursement occurs and at the point at which when those 

disbursements come in, there is now a credit balance 

created. All we're saying now is that if it's a credit 

balance where Title IV funds are included, as opposed to 

where Title IV funds exceed the allowable charges. So, 

but excellent comment. I really appreciate you pointing 
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that out and calling out what is not an appropriate 

practice.

MR. ROBERTS: I do see, Denise, your 

hands up. Do you want toMS. MORELLI: I just wanted to- do 

that right again. Okay. Ashlynne, were you suggesting any 

changes as a result of that? Because I'm aware of that, 

too, because that's some of the arguments we would get 

back from schools is that the VA money comes in later, 

WIOA money comes in later. But my understanding is when 

it's like- I don't want to call it pledge, but when it's 

provided for and they're planning to pay the money, the 

VA will get it to the school at some point in time. 

MS. HAYCOCK-LOHMANN: So in theory, 

that is how it works. It's supposed to work that way. But 

what we end up seeing is, even though it's pledged, if a 

school- each school has a different policy on how they do 

the school certifying efficiency. So some schools will 

certify right up front at the beginning of the semester 

or before the term starts to make sure they get paid 

right away. A lot of schools, what they found to prevent 

overpayments from the VA that end up on the student is to 

wait until after add/drop or even later in the semester 

to certify tuition and fees. And so while it's a pledge, 

because they haven't certified, they're holding back on 
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Title IV funding to see, you know, what the final bill 

will be from VA.

MS. MORELLI: Okay. So you're- are you 

proposing any changes though?

MS. HAYCOCK-LOHMANN: Like make sure 

that, you know, we are protecting those students in this 

process.

MS. MORELLI: That's one of the big 

groups that we are trying to protect, because that's the 

area that I've run into the most.

MR. ROBERTS: Okay. Any additional or 

new comments on number four? Credit balance. Okay. Moving 

right along. Greg, do you want to have your team walk us 

through number five, late disbursement? You're muted but 

I sure.

MR. MARTIN: Sure. Sorry about that. 

So, you see, Vanessa has gone to the appropriate part of 

the issue paper, the bottom of page two. And this is to 

revise regulations granting the Department authority on a 

case by case basis during a- during the audit or program 

review process, to direct institutions to make late 

payments beyond the 180-day limitation. So, and this is 

668.164(j)(4)(i). A late disbursement is a disbursement 

of Title IV funds that occurs after a student becomes 

ineligible, either because they withdraw, or because they 
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have completed the payment period for which the 

disbursement was intended. Under the current regulations, 

schools may not make late disbursements more than 180 

days after the institution determines a student withdrew 

or lost their eligibility. There is no flexibility for 

the Department to allow exceptions. However, there are 

occasions during audits and program reviews when auditors 

and reviewers identify disbursement errors committed by 

the school that would justify late disbursement to one or 

more students. This proposal would provide the 

flexibility to consider additional information as 

appropriate. So if Vanessa will go to the applicable part 

of the regulation. I'll go there myself as soon as I can 

find it. There we go. I made it. And you can see here 

under late disbursements. And we're in 668.164 in the 

center of the page under late disbursements on page six. 

An institution may not make a late disbursement later 

than 180 days after the date the institution determines 

the student withdrew, as provided in 668.22, or for a 

student who did not withdraw 180 days after the date the 

student otherwise became ineligible, pursuant to 

paragraph (j)(1) of this section. And now the additional 

text we propose to add. However, in the event of an audit 

or program review conducted by the Department, the 

Secretary may, at their discretion, direct institutions 
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to make late disbursements after the applicable 180-day 

period. So again, I'll ask Denise or Dave if they have 

any comments. If not, we will proceed to open the floor.

MR. ROBERTS: And I'm not seeing 

anything immediate from Dave or Denise. So I turn it over 

to the negotiators. Any comments? Feedback? Questions? 

Alright. Not seeing anything. As always, folks are 

welcome to add anything that might come late into the 

chat to the official transcript. Alright. Any questions 

to pose to the committee? Do you want to move right on to 

number six?

MR. MARTIN: I think we'll move on to 

number six. This might be the first time that's ever 

happened to me in all the days that I've done these 

negotiations. So, it's- I want to make- write that down 

for posterity, but yeah, let's move on to number six. 

Number six is a bit of an adding of a flexibility here 

and sort of an aligning of the rule to- in a way that we 

think makes more sense. So to allow late disbursement of 

loan funds in any payment period, regardless of whether 

the student successfully completed the period for which 

the loan was intended. And again, we're in 668.164. This 

is (j)(4) romanette 2. And let's read that. Currently, 

students must successfully complete the period of 

enrollment to receive a second or subsequent late 
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disbursement of a loan. This requirement means that some 

students were unable to complete the period of enrollment 

due to financial limitations or other reasons, may not be 

able to access additional aid in the form of a second 

disbursement, which could lead to student dropout. This 

proposal would create parity for students who withdraw in 

a first or second payment period. It would also reduce 

the complexity of Title IV student- Title IV funds, or 

rather R2T4 calculations, by removing an impediment to 

making post-withdrawal disbursements of Direct Loans. So 

we feel that this, as we point out here, brings parity to 

both payment periods and makes it easier to administer 

the programs and overall more fair for students. So we 

can turn to that portion of the regulations, which is 

going right back to where we were before, I believe, on 

page six under late disbursements. And you can see that 

all we've done here is, we've stricken romanette 2 there 

where we currently say an institution may not make a late 

or second- late second or subsequent disbursement of a 

loan under the Direct Loan program, unless the student 

successfully completed the period of enrollment for which 

the loan was intended. And I, again, would ask if David 

or Denise have anything to say about that. If not, we 

will open the floor for discussion. 

MR. ROBERTS: Alright, we'll first 
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turn to David and Denise. Not seeing anything immediate 

from them. I would briefly note I just saw in chat, Joe, 

on behalf of business officers for IHEs has had to step 

away for the remainder of the day, but we have his 

alternate Dom in for the remainder of this session. 

Anything from the committee? Questions, comments, 

feedback on number six for disbursement? Again, not 

seeing anything, Greg.

MR. MARTIN: Okay [interposing]

MR. ROBERTS: If we're- if we are okay 

to move on to severability, do we want to take a quick 

break? I know we haven't had one in the afternoon 

session. Typically we do have a quick 10 or 15-minute. 

MR. MARTIN: Yeah, I think let's keep 

it brief because we have- we're limited and I'd like to 

get through this. Let's keep it ten minutes if we can.

MR. ROBERTS: Yeah, absolutely. I have 

2:56. So if folks are okay coming back at around 3:05, 

3:06, we can hopefully finish up with this issue paper 

and then move right into public comment.

MR. MARTIN: Excellent. That sounds 

great.

MR. ROBERTS: Alright. Thank you all. 

We can go off live and pick it up in about ten minutes.

MR. MARTIN: Thanks, Brady.
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MR. ROBERTS: Welcome back everyone. 

Hope you enjoyed that short break. We do intend to move 

right to public comment promptly at 3:30. And we have one 

more section of issue paper number one to get to. So with 

no further ado, I will turn it right back over to the ED 

team to kick us off under 668.167. Severability. there 

are three items under that section.

MR. MARTIN: Thanks, Brady. And 

because these are sort of intertwined and I think part of 

it is just moving different areas from different portions 

of the regulations here, we're going to go through- I'm 

going to I'm going to address all of these at once, and 

then we'll discuss them- we'll discuss them as acollectively, I guess is the word I'm looking for. So 

this is under one- currently under 668.167, severability. 

And you can see here that Vanessa is already there. And, 

what we're proposing to do here is to consolidate 

Department regulations from program-specific regulations 

to cash management regulations related to overpayments. 

So the requirements related to overpayments are for any 

of you who've dealt with this over the years maddeningly 

interspersed amongst several- in several regulatory 

sections. So we propose to move them- to move them here 

under 167. By the way, this won't be severability 

anymore. Severability will become 168. So we're going to 
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move all of these under this one, this one regulation, 

which we feel will make it a lot simpler. And what we're 

going to do new is to establish new deadlines related to 

overpayments and to add clarity for partners and 

students, we propose the following deadlines for 

overpayments that are not tied to non-attendance, which 

is in 668.21 or R2T4 in 668.22. So these would be not 

related to those sections of the regulations. The first 

one will be 30 days for instances of overpayment where 

the student is responsible, schools must notify the 

student and either receive payment in full or make 

satisfactory arrangements within 30 calendar days of 

discovery of that overpayment, 15 calendar days. If the 

above 30-day- 30 days have elapsed and the school has not 

received full overpayment or made satisfactory repayment 

arrangements with the student, the school has an 

additional 15 days to refer the overpayment to the 

Department. The total timeframe would thus be 45 days 

from discovery through referral. And 45 days, for 

instances of Federal Student Aid grant overpayments where 

the school's responsible, the schools have 45 days to 

resolve the overpayment. This aligns with the amount of 

time a school has to actually make a return of Title IV 

funds to the proper program accounts. We also seek to 

modify the small- I almost said small business write-off, 
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small balance write-offs, and applying a new adjusted 

rate to small write-offs. We propose to increase the 

amount of the small balance write-off. And you can see 

that Vanessa is there again, applying- we propose to 

decrease the amount for small balance write-offs for 

Federal Pell, TEACH, and FSEOG Grants from 25 to $50 and 

for Direct Loans, for- from $25 to $100. And now let's go 

to the applicable area of the regulations and take a look 

at them together. And so we are now on page eight and 

we're looking at a) returning funds. And I'm not going to 

go over all this because as I said before, a lot of this 

is just taking areas related to overpayments in the rest 

of the regulations that we haven't changed, and simply 

incorporating them here, moving them all to one area, 

which I'm very excited that we're doing. I remember doing 

training on overpayments in the past and finding it 

maddening going everywhere. But we're going to look at B, 

which is new, and that is where we discuss the 

overpayments timeliness for overpayments for which the 

institution is responsible and that are not tied to nontitle- non-attendance or return of Title IV funds. We see 

here that the institution must promptly send a written 

notice to the student requesting repayment of the 

overpayment amount. Institutions have 30 days from the 

date the notice is sent to recover the overpayment in 
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full or enter the overpayment arrangement. Enter into a 

repayment arrangement with the student. And then we move 

down to two. The initial 30 calendar days have elapsed 

and the institution has not received full payment or made 

satisfactory arrangements. The institution has 15 days to 

report the overpayment to NSLDS and refer to the 

Department. And for FSA grant overpayments for which the 

institution is responsible, institutions have 45 calendar 

days from the date of discovery, two for FSEOG, restore 

the institution's FSEOG account for the overpayment, plus 

any administrative cost allowance claimed on that 

overpayment and for Pell Grant and teach over payments 

made the appropriate downward adjustment in COD and 

either return the funds to G5 or use them against future 

draws for other eligible students. And the only other 

portion that we're hitting- the rest of this is basically 

where we're incorporating the existing overpayment rules. 

And then if we go over to page 11 under FSEOG 

overpayments, you will see that we have changed the 

amounts there for, if a student is not liable for the 

institutions not required to attempt recovery of an FSEOG 

overpayment, nor is the institution required to refer an 

FSEOG overpayment to the Secretary if the overpayment is 

less than $50. And then we see the- I think that's. Yeah, 

I believe that- oh, we have Direct Loan overpayments too 
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where we include the other addition where a student not 

liable for and the institution is not required to attend 

recovery of a Direct Loan overpayment if the amount is 

less than $100 and it's not a remaining balance. And 

Federal Student Loan servicers and lenders must write off 

totals for borrowers, principal and interest, of $100 or 

less after 30 days. And those are the changes. So unless 

David and/or Denise have anything to add, we can open the 

floor for discussion on those changes.

MR. ROBERTS: Great. As we turn it 

over to the negotiators, I do just want to make a note 

that we're a little over 15 minutes away from public 

comment. So if you have received an email about a 

speaking time for your public comment today, if you 

wouldn't mind starting to log in and endeavoring to make 

sure your name on zoom matches the name that you 

registered under, so that we can let you in on a- in a 

prompt fashion. But I will turn it over to our 

negotiators for any questions, comments, feedback for the 

Department or each other on the severability pieces. Yes, 

Jillian.

MS. KLEIN: Thanks. hopefully just one 

easy one. So in the overpayment section, so 167 (b)(4). I 

think this is what you meant, but I would just recommend 

clarifying where it says institutions have 45 calendar 
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days to make restitution that that be edited to say 

institutions have 45 calendar days from the date of 

discovery to make restitution. So that would be in line 

with how you've treated three and I think just clarifies 

for institutions that the clock starts at the point where 

the institution determines it or it's been determined, 

not from some point in the past when it should have been 

determined.

MR. MARTIN: Noted.

MR. ROBERTS: Thank you, Jillian. Dom, 

I'll turn it over to you.

MR. CHASE: Thank you. I too have 

something minor just for a suggestion. I know, Greg, you 

had mentioned the kind of- it's easier when you connect a 

deadline or something of that nature to something else. 

So in terms of 668.167, the small balance write-offs, 

would there be any thought to just making them the same 

amounts for consistency's sake, whether that be 50 or 

100? Just a suggestion.

MR. MARTIN: We'll take it back. Dave, 

do you have any comment on why we- why we chose those 

specific numbers? I don't recall myself being involved in 

that discussion, but if notMR. MUSSER: Yeah. So the intent was 

to use $100. And we identified that there is some 
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statutory language, dealing with overpayments for some of 

the grant programs, that identifies $50 as the amount. I 

would defer to Denise as to whether that sets a floor or 

not. But that was our initial read of it. And we can go 

back and look at it to see if that is indeed what we're 

limited to. But that was the reason for the $50.

MS. MORELLI: Right. We will go back 

and take a look. I think we thought it was a cap, but I 

will- we definitely will look at it.

MR. ROBERTS: Thank you. We'll turn it 

over to Sophie next to- I just want to note for the live 

stream sake is alternate speaking on behalf of Legal Aid. 

So with that, Sophie, the floor is yours.

MS. LAING: Thanks. We had some 

concerns with these proposals in that they don't seem to 

do anything to encourage or ensure that students actually 

have affordable repayment options for repaying 

overpayments and may actually result in more overpayments 

being referred to the Department, where they, again, 

wouldn't have any affordable repayment options. We are 

especially concerned for Pell Grant overpayments, where 

these are low-income students who, you know, are unlikely 

to be able to come up with that lump sum quickly. Just as 

an example, the Legal Aid Foundation of LA had an older 

student with some significant mental health issues whose 
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only income was $1,500 a month from SSDI and SSI, and he 

was taking community college classes but because of his 

mental health, had to drop most of those classes. As a 

result, he had a Pell Grant overpayment of a little over 

$1,000 that he had to pay before, you know, enrolling 

again, getting any more aid. But he had already spent 

that money on living expenses and now was unable to pay 

it back. He had tried to get- and Legal Aid to try to get 

him a $40 a month payment plan, which was rejected by the 

school. And now it looks like it will be sent to the 

Department, where again, he will be asked to pay for that 

lump sum amount. So we'd like to propose that students 

have access to, you know, an Income Driven Repayment Plan 

like SAVE and in-school deferments because many of these 

students aren't going to be able to pay back these 

overpayments and lump sums, and then we'll be barred 

from, you know, continuing on in their education.

MR. MARTIN: I can address that to 

some extent. I- and I'm going to have to ask my 

Department colleagues to jump in if I'm saying something 

incorrectly here. So schools- we say that schools can- I 

think in most cases schools don't generally enter into 

repayment arrangements with students. They're difficult 

to monitor. Students have to go in and change COD amounts 

every time students pay. When a student is referred to 
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the Department for collection, our- we don't call it debt 

collection service anymore. And someone maybe put in my 

chat what we refer to it now as. But, they are authorized 

and empowered to enter into agreements with a student 

whereby the student will be eligible right away and be 

put on a plan to pay it back. I'm not sure exactly what 

the mechanics of that are, but I believe it is the case 

that they have the authority to allow a student to pay it 

back and not simply demand, in your case, the full 

$1,000, or else the student is ineligible. So- and so we 

used to say that in some cases it may be beneficial for a 

school to get authorization from the student to turn it 

over to the Department right away. If the student doesn't 

have the ability to repay it right away, they're actually 

better off being reported to the- referred to the 

Department because there will be- they'll be able to give 

that student- put that student on a payment schedule to 

repay it back.

MR. MARTIN: But I'm going to ask 

Denise or David to confirm that I am not an expert in 

debt collection by any stretch of imagination, but I 

believe that is the- that is our protocol. But I will 

definitely make sure that I'm correct about that. So I 

believe, though it's not enshrined anywhere in reg, I 

believe that it does- that that is currently what our 
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practice is and that we are interested in getting 

students eligible as soon as possible and not having them 

have to forego their education because they owe $1,000 

in- I mean, they do owe it. There's no getting around 

that. If it's student fault, they- [inaudible] fault, but 

overpayment due to the student's actions, then that 

individual has to repay it. There's no getting around 

that. But the whole idea is, can the student remain 

eligible and can there be terms? And anytime someone's 

entered into a satisfactory arrangement, either with the 

school or with us, they are eligible. So I'll leave it at 

that and then see if anybody else has any comments or 

knows more about that process than I might. So pleading a 

little bit of ignorance there, but thinking that I do 

have it mostly correct.

MR. ROBERTS: Dave might be bailing 

you out here. Dave, do you want to add something?

MR. MARTIN: Yeah. Come bail me out.

MR. MUSSER: Anytime, Greg. So, there 

are- there's quite a bit of flexibility for the 

Department's debt collections team to assess the real 

financial circumstances of students who have overpayments 

and in general, the debt collections team will find a 

payment amount that is acceptable to the student, given 

their financial situation. All of that said, I do think 
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that the Department can consider suggestions around ways 

to give those- the debt collections folks potentially 

additional instruction around, you know, what reasonable 

payments might mean, that kind of thing. I would hesitate 

though, to go down the road of full Income Driven 

Repayment, primarily because at least in the form that 

it's used for Direct Loans, we- most students getdemonstrate their income using IRS information, and the 

IRS is directed to give us that. We may or may not be 

able to have IRS provide personal tax information about 

income on an ongoing basis, absent a statutory direction 

for them to do so. Potentially they might, but it's not 

assured. But at any rate, there are definitely 

potentially some options that we can look at. So we can 

take it back.

MR. ROBERTS: Thank you, Dave. And 

Sophie, did you want to follow up?

MS. LAING: Thanks and thanks for 

explaining that a bit further. If it's possible to get 

some more, I guess, clarification or details on, like 

what those payment plans or options look like that the 

Department is offering students. that would be very 

helpful, I think. And then also just to clarify, I think 

one thing that Greg, you said. So students, if they enter 

into a payment arrangement with the Department, they do 
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regain their financial aid eligibility at that point or 

not, until they pay it off?

MR. MARTIN: They do, once you've 

entered into a repayment, unless they were to abrogate 

that arrangement and they gain eligibility. Likewise, if 

they've entered into a repayment arrangement with the 

school, the school has a mechanism to indicate that, and 

then on SLDS, a school can indicate that they've referred 

an overpayment to the Department. I like to say people 

should not think of being referred to the Department in 

the pejorative sense, because in many cases it can be a 

great benefit to the student. I mean, if the school 

doesn't- isn't interested in entering into an 

overpayment- I mean, not overpayment, into a repayment 

arrangement, and they may not be, then the best bet the 

student has is to go to- it might be even a better bet 

for them right off the bat to go straight to referral, 

right? So the school might give the student a 30-day 

demand letter. But, you know, I think schools should 

indicate that, you know, they can or talk to the students 

and say, you know, we can refer this to the Department 

right away and get you on a repayment- they can get you 

on a repayment plan and get this resolved in a more 

efficacious way. So I would point that out. I also have 

something in the chat here, I wanted to read it. One of 
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our people, David [Inaudible], pointed out that the new 

language states that for Direct Loan overpayments, we 

were asked about the amount the student is not liable 

for, and the institution is not required to attempt 

recovery of a Direct Loan overpayment if the amount is 

less than $100 and is not a remaining balance. Federal 

Student Loan servicers and lenders must write off totals 

for borrowers or principal interest of 100 days, $100 or 

less after 30 days. So that was an intentional amount 

that's already keyed to a requirement for Direct Loan 

servicers. Just wanted to point that out. And I thank my 

colleague David [Inaudible] for pointing that out.

MR. ROBERTS: Okay. I saw- JoEllen, 

did I see your hand go up and then come back down? Are 

you- did you want to askMS. PRICE: That was actually my 

question.

MR. ROBERTS: That was actually- okay 

great.

MS. PRICE: Was the $100. So does it 

include $100 or does it include anything less than $100? 

That was my question.

MR. ROBERTS: Great, great. Glancing 

at the clock, I'm not seeing any new hands. And I do want 

to point out, Carolyn, you did post in chat that you had 
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to add one question related to an earlier- a previous 

discussion. Did you want to ask that now or make that 

comment?

MS. FAST: If that would be okay. I 

just wanted to flag a concern that we have that, although 

the Department has opened 668.164, there were no proposed 

changes that relate to what we thought was a pretty 

significant issue, which is about junk fees on bank 

accounts marketed to students under that provision 

related to disbursement of Title IV. And we just wanted 

to flag that as something that the CFPB has been looking 

at. And we plan to provide information to the group about 

the issue and some proposals. 

MR. MARTIN: Yeah, you're welcome to 

provide that to us. We did think about whether we wanted 

to entertain tier one, tier two is what you're talking 

about. We- our conclusion was, at this point in time, 

though, we absolutely agree with you about the existence 

of junk fees, that was too much to take on at this time. 

If we do tier one, tier two, we have to involve bankers 

in the discussions, not anything against bankers, but 

that's a whole nother level of- for those of you who 

remember the previous discussions. I also want to- I also 

would point out we did issue a Dear Colleague Letter on 

tier one, tier two. Maybe one of my colleagues can drop 
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that in the chat. I cannot off the top of my head 

remember what it is. But if someone will be generous 

enough to drop that in my chat, I will give that to all 

of you. But thanks for bringing that up. I appreciate it, 

Carolyn. And back to Brady.

MR. ROBERTS: I'm going to throw it 

over to Barmak, who I think might be our final comment 

for the day.

MR. NASSIRIAN: I'll be very brief, 

but I would beseech the Department to at least consider 

amendments that are procedurally protected. We are not 

attempting to regulate bankers. We're attempting to 

regulate the behavior of institutions that are already 

subject and well represented to this regulatory 

proceeding. So we will submit some language that I really 

hope the Department- you know, given the orders of the 

difficulty of dealing with reg neg and the master 

calendar, it's really a lost opportunity not to clean 

regs up that you have already opened. So we'll submit 

something later today through Brady. And then we'll see 

whether you folks may at least think about it. Thank you.

MR. MARTIN: Sure. Submit- please feel 

free to submit whatever language you have for us to 

consider.

MR. ROBERTS: Thank you. And that's a 
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good reminder to everyone on the committee. Any proposed 

modifications or new regulatory text, feel free to send 

to the facilitation team. We'll disseminate it and make 

sure the Department gets it as well. So, thank you. Greg,

any final comments or questions for the committee to 

consider? We have a few folks in the waiting room for 

public comment. I'll say again, if folks have received a 

confirmation email that they have a speaking slot today, 

if you want to start logging on so that we can make sure 

that we have time to get you in for your comment, I would 

be most appreciative of that. But, Greg, anything you 

want to end the day on?

MR. MARTIN: I just was informed that 

Dear Colleague Letter is Gen 22-14, I believe, so, DCL 

22-14, which is available on our Partner Connect site. 

You can still type in IFAP and probably FSA friends will 

not like that I said that, but you can. Pull up that 

website and go under- if you go into the knowledge 

center, you can click on Dear Colleague Letters in 2022 

and 22-14, we did issue a Dear Colleague Letter 

clarifying some elements of- we didn't make any 

regulatory changes, obviously, but there are some 

clarifications, I think, to people's benefit, students 

benefit, in that Dear Colleague Letter 22-14. 

MR. ROBERTS: Yeah, I believe Dave 
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just posted it in our chat.

MR. MARTIN: Oh excellent. That's 

fantastic that he did that. So I really appreciate my 

colleagues stepping up there and bailing me out. Thanks. 

Nothing else from me.

MR. ROBERTS: Alright. Thank you all 

for this productive first day. We're going to move right 

to public comment now. Everyone who would like to join us 

on camera, feel free to turn it on so members of the 

public who are addressing can see everyone, and I will 

actually turn it over to Krystil Smith on the FMCS team 

to admit our first speaker.

MS. SMITH: Okay, well, I'll go ahead 

and admit Jasmine Thomas.

MR. ROBERTS: Alright. Good afternoon, 

Jasmine, can you hear me? I think you're on mute and I 

can see you. Yep. You're good.

MS. THOMAS: Can you hear me now?

MR. ROBERTS: Yes we can. Thank you 

and welcome to public comment. You'll have three minutes 

to address the committee. You'll be given a 30-second 

time warning when your time is almost up. And your time 

will begin whenever you start speaking. 

MS. THOMAS: Okay. I'm ready. Hi, my 

name is Jasmine Thomas. I spoke at the public hearing in 
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April of last year and shared my awful experience at 

Fortis Institute, specifically in Nashville. I wanted to 

speak again today because it is important that you keep 

what happened to me from happening to other students. I 

am now $28,000 in debt and don't even have a degree to 

show for it. I started the nursing program at Fortis in 

2020 and expected to be done with the program in two 

years. This was a stressful time in my life. My husband 

was serving in the Army. He was deployed to Poland in 

2022 for nine months. I was alone with our two young 

children and I had a long commute to classes. After 

making it to the end of my program the first time, Fortis 

refused to give me my degree and prevented me from taking 

the NCLEX because I had not received a required score of 

a 900 on the HESI exam, exit exam. The HESI is just a 

practice test for the NCLEX, but Fortis won't let 

students graduate without a certain score. Even if a 

student completed all parts of the required curriculum. I 

took the HESI a second time and received an 883 the first 

term, but the school had increased the required score 

from an 850 to a 900. I filed a complaint with the 

Tennessee Higher Education Commission, but they did not 

do anything. I had to take the final nursing course again 

and take the HESI exam for a third time. This time during 

the second term of this- of the school, I scored- of the 
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class, I scored a 954. That still wasn't enough because 

Fortis added a new standardized test two weeks prior to 

graduation. Apparently my score was not high enough on 

that test, and I was half a percentage point short of 

passing the course and graduating. I filed another 

complaint with the Tennessee Higher Education Commission, 

but they ruled against me and both of my complaints. I 

also filed complaints with Fortis' accreditors, including 

ACEN, A-C-E-N, and ABHES, A-B-H-E-S, the nursing program 

accreditor for ACEN and the national accreditor being 

ABHES. ACEN had a policy that using exams like the HESI 

to keep students from graduating was not a best 

educational practice, but that did not matter. Neither of 

the accreditors helped me. I have spent a lot of the past 

year trying to advocate for myself and understand what 

happened. I've read about how it's considered a high 

stakes exam, and when the schools use the HESI to prevent 

students from graduating and the schools use high stakes 

exams to protect their NCLEX pass rates, and how the 

maker of the HESI says schools should not use the exam to 

prevent students from graduating.

MR. WAGNER: You have 30 seconds 

remaining.

MS. THOMAS: But nothing I have read 

has helped me understand why schools are allowed to do 
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it. My time at Fortis was financially and emotionally 

devastating for my family. I am here to ask the committee 

to do something so that does not happen to other 

students. Thank you for your time.

MR. ROBERTS: Thank you, Jasmine, for 

your comment. Appreciate it. Who do we have next?

MS. SMITH: So, our next speaker is 

Dale Sanders. He's the director of retail operations from 

the University of Missouri System.

MR. ROBERTS: Good afternoon, Dale, 

can you hear me?

MR. SANDERS: Hello? Can you hear me?

MR. ROBERTS: We can. Yes, we can hear 

you and see you. Welcome to public comment. You'll have 

three minutes to address the committee. You'll be given a 

30-second warning at 2 minutes and 30 seconds and your 

time will begin whenever you're ready.

MR. SANDERS: Good afternoon. My name 

is Dale Sanders. I'm the director of retail operations 

with the University of Missouri. The changes being 

proposed in section 668.164(c)(2) will increase course 

material costs for students by effectively eliminating 

the incentive for content providers to reduce the cost of 

course materials through strategic affordability 

programs. In 2014, the University of Missouri launched 
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its first course Utilizing Inclusive Access Materials, a 

program we now call Auto Access. Auto Access was 

originally developed and implemented as an attempt to 

reduce the cost of course materials for students at the 

four institutions within the University of Missouri 

system. In the last 12 months alone, Auto Access has 

saved our students over $7 million on course materials. 

Students in these courses have access to their materials 

digitally on the first day of class, eliminating delays 

and learning brought on by various availability issues 

surrounding traditional print textbooks. Under the 

current rules, course materials cannot be included in 

auto access unless they are quote "below competitive 

market rates." Though this current language is vague, it 

provides a structure that institutions can use to 

incentivize content providers to lower their costs. At 

the University of Missouri, we interpret this line to 

mean that materials in our Auto Access program must be 

the most affordable option available or it is not 

included. Additionally, under current rules, there is a 

provision that requires institutions to allow students to 

opt out of these programs. With regards to the opt-out 

policy, issue paper one expresses concern about the lack 

of disclosure and transparency. If additional 

transparency is needed regarding opt-out availability, 
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perhaps consideration could be made for adding to the 

current language with additional guidelines. At the 

University of Missouri, we notify students of their 

ability to opt out over email no less than three times; 

when they enroll in the class, on the first day of class, 

and before the opt-out deadline two weeks into the 

semester. Talking points are provided to faculty for use 

on the syllabus that communicate opt-out information. 

Students can opt out by going directly to our campus 

bookstore websites, directly on the course within the 

LMS, or by contacting our bookstores in person or via 

email. Inclusive Access programs like Auto Access and 

equitable access programs help to change a long time 

national trend of increasing course material costs. 

According to the US Bureau of Labor Statistics, after 

years of significant annual increases, the price of 

college textbooks has remained flat since 2017, despite 

high national inflation in recent years. I believe this 

is due in large part to the nationwide adoption of 

programs like auto access. As a result of the 2015 

regulationsMR. WAGNER: You have 30 seconds 

remaining.

MR. SANDERS: -the changes proposed 

effectively turn back the clock on student course 
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material affordability by unintentionally driving up the 

cost of course materials under the guise of increasing 

transparency. The best interests of our students and the 

University of Missouri system are always our primary 

concern. It is on their behalf that I ask the committee 

to reject the proposed rules within this section. Thank 

you.

MR. ROBERTS: Thank you for your 

comment, Dale. Krystil, who do we have speaking next?

MS. SMITH: Our next speaker is Nicole 

Allen representing S-P-A-R-C, SPARC, and Nicole is on.

MS. ALLEN: Thank you so much. Hi.

MR. ROBERTS: Good afternoon.

MS. ALLEN: Good afternoon.

MR. ROBERTS: You'll have three 

minutes to address the committee. You'll be given a 30-

second warning at 2 minutes and 30 seconds. And your time 

will begin whenever you're ready.

MS. ALLEN: Awesome. Thank you. So hi, 

everyone. I'm Nicole Allen, Director of Open Education at 

SPARC. We're a nonprofit organization that advocates for 

open and equity and education. And I want to appreciateexpress just appreciation for the Department and 

committee members and the complex and thoughtful 

discussion you had earlier on the books and supplies 
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provision, 668.164(c)(2) and we fully support the 

proposed changes. Our understanding is that the proposal 

would essentially reestablish the longstanding consumerfriendly practice of requiring student authorization for 

the use of Title IV for books and supplies costs. You 

know, I know much of the discussion focused in on, like 

cosmetology kits and scuba gear, but this issue is 

actually much broader. As we heard, this rule is being 

applied to sort of run of the mill textbooks and other 

course materials through the so-called Inclusive Access 

model, which are used at many institutions to provide 

textbooks for individual courses and even packages that 

include all of the textbooks for a program at a flat fee. 

And we share the concerns raised by the Department and 

negotiators that the existing rule is going to allow 

students to be automatically billed for materials that 

they could instead purchase from other sources at a lower 

price, and it gives them less control over their critical 

and really precious at this time Title IV dollars. We 

hear from our campus members how textbook vendors have 

leveraged this provision to negotiate, you know, special 

deals with many institutions, deals that are often of 

greater benefit to the publisher or vendor than the 

students, since, you know, their products get to be 

automatically billed to students rather than having to 
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compete for students' business like they have 

historically. And, you know, we've seen how textbook 

prices have skyrocketed. And now that more textbooks are 

becoming digital, I think we need to be extra intentional 

about preserving student choice. Being able to shop 

around and vote with their feet is the only check and 

balance students have left in the marketplace, and they 

can't do that if they're being automatically billed under 

the current rule. The Department's proposal would simply 

mean that institutions have to get authorization from 

students before these charges are added to their Title IV 

Aid. There's no reason why this would result in 

increasing costs at campuses with these Inclusive Access 

programs. They could simply continue under an opt-in 

model where students opt-in rather than having to optout. And if the programs offer the great deals and value 

that they claim, there's no reason to think students 

wouldn't choose to opt-in. And for that reason, I would 

urge the committee to remove the entire paragraph of 

(c)(2), including the exceptions for health and safety 

reasons, or if the [30 seconds] is the only source of the 

material. if there is really a compelling health and 

safety reason, or if the institution really is the only 

source of the material, there's no reason students 

wouldn't choose to use their Title IV Aid to pay for 
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that, if that's what they want to do. So in closing, I 

just want to say thanks for the hard work you're doing 

and for the chance to comment. And again, we fully 

support the Department's proposal in (c)(2) and actually 

recommend striking that entire paragraph.

MR. ROBERTS: Thank you, Nicole, for 

your comment. Who do we have next, Krystil?

MS. SMITH: We have Steven Kish. 

Steven is a professor at Zane State College.

MR. ROBERTS: Good afternoon, 

Professor Kish. Can you hear me?

MS. SMITH: You're on. You're on mute, 

Professor Kish.

PROF. KISH: I'm an anatomist, not a 

computer scientist. Yes, I can hear you.

MR. ROBERTS: Great. Good afternoon 

and welcome. You will have three minutes to address the 

committee. You'll be given a 30-second heads up when youyou're at 2 minutes and 30 seconds, and your time will 

begin whenever you start speaking.

PROF. KISH: Good afternoon. I've been 

an educator for 27 years. In that time, many products and 

ideas have been pitched to help student learning and 

increase knowledge retention. Inclusive Access is the 

program that's delivered on both. Inclusive Access has 
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made educational materials more accessible and 

affordable. My students used to pay $500 for a textbook 

and a lab manual for a two-semester anatomy course. 

Inclusive Access provides the text and lab manual for 

$115. That's $57.50 per semester. It's a cost reduction 

of 77%. I teach at a community college where many 

students are older, have jobs and families that prevent 

them from attending classes between the hours of 8 a.m. 

and 2:30 p.m., combining online course delivery with 

digital course materials allow students to access 

information at times that better fit their schedule. In 

the past, many students did not have access to their 

course materials until days or even weeks into a class. 

Now, students are using Inclusive Access programs and 

have access to course materials on or before day one. 

Inclusive Access provides me and my students access to 

the text, robust animations, and simulations that allow 

me to review materials with the students over zoom as if 

we were in the lab. The digital course materials today 

provide students with a variety of tools to increase 

information retention. The program I use requires 

students to be honest with themselves about their level 

of understanding. As students progress through the 

program, their retention along with their confidence 

increases. Before I started using digital courseware 
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coupled with Inclusive Access in the summer of 2018, my 

pass fail rate was 50/50 for 2017-2018 academic year. 

Now, pass rates as a whole are in the high 70s and mid 

80s, having programs that allow the students to review 

information at their own pace and provide them immediate 

feedback, has boosted their confidence and their 

performance. I would like to end my statements by asking 

this question, why are you looking to keep students from 

using financial aid to purchase their course materials 

through programs like Inclusive Access, which ensure all 

students have the choice to receive their course 

materials on or before the first day of class, and at the 

lowest possible price? About 90% of the students at my 

institution receive financial aid. Removing the ability 

to access Inclusive Access programs would force them to 

spend more money on their course materials. The cost 

savings alone should warrant the use of financial aid 

dollars for Inclusive Access. Students are better 

prepared to succeed in their chosen career field with 

Inclusive Access, and I would urge the committee to allow 

students to use their Federal financial aid monies to 

purchase their course materials through Inclusive Access 

programs. Thank you very much.

MR. ROBERTS: Thank you, Steven, for 

your comment. Krystil, who do we have next?
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MS. SMITH: Next we have Katie Wagman. 

Katie is representing herself.

MR. ROBERTS: Alright. Good afternoon, 

Katie. Can you hear me?

MS. WAGMAN: Yes, I can. Can you hear 

me alright?

MR. ROBERTS: We can. We can see you 

as well. Welcome to public comment. You'll have three 

minutes to deliver your public comment, and you'll be 

given a 30-second heads up at 2 minutes and 30 seconds, 

and your time will begin whenever you're ready.

MS. WAGMAN: Perfect. Thank you so 

much. I support the proposal to eliminate the provision 

allowing institutions to include the cost of books and 

supplies as part of the tuition and fees. As a student at 

UCLA, I have plenty of experiences with programs like

Inclusive Access. On my campus, we are opted into these 

fees and are automatically charged for materials that are 

given to us from our classes without giving students the 

option to shop around for used materials, share 

materials, or to find alternative sources. Just last 

quarter, I walked into class and was told that I would 

need to pay $100 on the spot to access Pearson, which 

would include not only my book but also my homework. This 

was not in the syllabus, nor was it told to us 
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previously. Since all of my homework is only available 

through this interface, I had no choice but to buy it. 

That money could have gone towards my food, my bills, or 

my tuition. As a low-income student, I am 

disproportionately affected by these programs. These 

costs should not be something that students need to worry 

about. Even worse, the contracts that these programs use 

often limit the number of papers- paper copies provided, 

creating a lack of accessibility for students with 

diverse learning needs. These contracts also typically 

include quotas for participation to uphold the proposed 

discounts, as well as undisclosed discount structures. I 

am particularly concerned with the fact that there are 

confidentiality clauses that mean that only the campus 

bookstores can see these contracts, creating a lack of 

accountability and transparency for the institution. 

Further, the UC System wants to move forward with UC 

Davis's Equitable Access Program, which charges students 

a flat fee for all of their materials, regardless if 

their materials even add up to that cost. This is unfair 

to students who are in courses that use OER and are not 

participating in these equitable access programs, but are 

still forced to opt into these programs to subsidize 

other students' costs. After having talked to students 

across the UC campuses, many students share these same 
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concerns, especially when these fees can start at almost 

$200 a term. I am worried that programs like these will 

still be able to function, even if the Department does 

eliminate the regulation that allows Inclusive Access. I 

am worried that making an exception where the institution 

is the only option for accessing textbooks could easily 

be exploited. There are so many tricks where publishers 

make us buy access codes or custom content that is really 

no different than the last edition, that I worry that 

they will find a way around it. Equitable access still 

carries all of the same contract issues and lack of 

transparency as Inclusive Access programs do, and I ask 

the Department to please consider this as well. Thank you 

for your time and consideration.

MR. ROBERTS: Thank you, Katie, for 

your comment. Alright, Krystil, who do we have next?

MS. SMITH: We have Angela McMillen. 

Angela is representing herself.

MR. ROBERTS: Alright. Good afternoon, 

Angela, can you hear me?

MS. MCMILLEN: Yes. Can you hear me?

MR. ROBERTS: We can. We can see you 

as well. Welcome to public comment. You'll have three 

minutes to address the committee. You'll be given a 30-

second heads up and your time will begin whenever you are 
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ready.

MS. MCMILLEN: Okay. I'm ready. As I 

said, my name is Angela McMillen, and I'm a Navy Veteran. 

I enrolled in the University of the Rockies, which later 

became Ashford University during my attendance. I wanted 

to share that my concerns about Ashford should have been 

prevented with better oversight. I obtained a master's 

degree in psychology, health and wellness from the school 

in 2014 and transferred into a PhD program. Despite 

promises, the school failed to obtain accreditation from 

the American Psychological Association. The school also 

converted the Ph.D. program I enrolled into to a PsyD 

program, but failed to provide the curriculum that was 

necessary for the PsyD program. After seven years at the 

schools and over $140,000 in loan, I ended up with only a 

master's degree and one that no one even recognized as a 

psychology degree. When I embarked at the school, I was 

assured the institution was going to get APA 

accreditation. Regrettably, those assurances remained 

unfulfilled. Further, while I was enrolled, the doctorate 

program changed from that PhD to a PsyD, which altered 

the focus of the curriculum. As somebody who is deeply 

passionate about research in psychology, this change did 

not align with my academic and career aspirations. Plus, 

the PsyD program did not include clinical work that is 
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necessary for a PsyD degree. And my dissertation was 

supposed to include work with clients, but there were no 

clinical hours. The longer I attended, the more I 

realized I had been duped. I ended up withdrawing from 

the PsyD program. After leaving, I was unable to transfer 

or build on any of my credits because other schools did 

not view my master's degree as a psychology degree. I 

learned that all of my psychology courses were designated 

as Ashford as org for organizational program courses, 

instead of psy for psychology program courses. I'm 

sharing my story because I think the oversight agencies 

should have understood that what the school was 

describing to students was not actually what the school 

was providing. I thought I received a master's in 

psychology and transitioned to get the PhD in psychology, 

but certainly the school's accreditors should have 

understood that what was being offered by the school 

would have not been recognized by any other institutions 

as an actual psychology degree, and at least should have 

known that a PsyD program requires clinical hours. Thank 

you for your attention on this urgent matter.

MR. ROBERTS: Thank you, Angela, for 

your comment. We appreciate it. Alright. Krystil, who do 

we have next?

MS. SMITH: Next, we have Dr. Michael 
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Moore. Dr. Moore from the University of New Hampshire.

MR. ROBERTS: Great. Good afternoon, 

Dr. Moore. Can you hear me?

DR. MOORE: Yes, sir. Can you hear me?

MR. ROBERTS: Yes, sir. We can see you 

as well. Welcome to public comment. You'll have three 

minutes to address the committee. You'll be given a 30-

second heads up. And your time begins whenever you're 

ready.

DR. MOORE: Great. Good afternoon, Mr. 

Martin, commissioners, committee negotiators. I 

appreciate the opportunity to provide public comment 

today. My name is Mike Moore. I'm an affiliate research 

assistant professor at the University of New Hampshire. 

I'd like to provide comment for section 668.164, 

subsection C, parts one and two, with respect to 

including the cost of books and supplies as part of 

tuition and fees. As an academic researcher, I spent the 

last several years attempting to understand how having 

access to course materials impacts a student's ability to 

successfully pass or complete a course. The course 

intervention model is born out of the committee's 

language change in 2016 helped solve a centuries-long 

challenge of ensuring that all students had access to 

their required courses without barriers, based on their 
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socioeconomic status. The literature and research are 

clear and pointed in the assertion that course materials 

serve as a barrier to higher education access for a large 

population of students. Not having access, or the ability 

to acquire required courses, forces students to delay or 

defer necessary courses, or prevent students from 

potentially pursuing a major that aligns with their hopes 

and aspirations of pursuing the American Dream. Through 

my research and the research of others, we have learned 

that students ability to have day one access to course 

materials through intervention models, commonly referred 

to as inclusive and equitable access, solve the barrier 

of access for students unlike any intervention in the 

last 150 years of higher education. These intervention 

models are also helping students be more successful in 

the classroom. Even the most critical study on these 

intervention models has shown students participating in 

one of the models are 7% more likely to pass a course 

with a letter grade C or better than in previous 

semesters. The effectiveness research on these 

intervention models show that underrepresented student 

populations are experiencing exponential benefit by 

having unprecedented access to course materials. In both 

my Inclusive Access studies, students who identify as 

Black experienced nearly a 13% increase in success rate, 
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letter grade C or better, when comparing pre and post 

implementation populations. In my Equitable Access Study, 

which was completed at two two-year institutions, 

students who had identified Black and opted out of the 

Equal Access Program were 21% less likely to complete 

their course than students who identify as Black and 

stayed in the program. Additionally, in the Equitable 

Access Study, Pell Grant recipients who opted out were 

17% less likely to complete their course than Pell Grant 

recipients who stayed in the program. Higher education in 

the United States has long made course materials a 

required part of participation. However, until the 

regulations were modified in 2016 to allow for these 

charges, there's been little done to remove the 

institutional barriers of access to course materials that 

has prevented under-resourced students from achieving 

their aspirations of bettering their lives and the lives 

of those around them. [30 seconds] I implore the 

committee to continue to allow the use of Title IV 

funding to be used as part of these intervention models 

and reaffirm your commitment to the American Dream for 

every student who is willing to attempt to change their 

fortunes through education. Thank you.

MR. ROBERTS: Thank you for your 

comment.
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MS. SMITH: Brady, next we have 

Annabelle Folsom. She's with the PIRG and the University 

of South Florida.

MR. ROBERTS: Alright. Good afternoon, 

Annabelle, can you hear me?

MS. FOLSOM: Yes.

MR. ROBERTS: Excellent. Welcome to 

public comment. You'll be given three minutes to address 

the committee, given a 30-second heads up, and your time 

will begin whenever you're ready.

MS. FOLSOM: Okay. Thank you. Good 

afternoon everyone. Like she said, my name is Annabelle 

and I am a student at the University of South Florida. 

Thank you so much for giving me the opportunity to speak 

today. So my university currently operates using an optin system for textbooks rather than an opt-out. So I have 

the autonomy to choose whether I want to opt-in, which I 

think is great. I cannot be- imagine being at another 

school and being automatically opted in by my university 

because as a college student, I have a low budget and I 

like to be able to compare the costs of my textbooks. I 

don't think that institutions should be able to add books 

to a student's tuition bill without their authorization, 

and textbook programs should be opt-in, not opt-out. And 

if these hidden opt-in fees were automatic at my 
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university and included in my tuition, I would just 

likely end up paying it without being able to shop 

elsewhere for my course materials. And I know that many 

students are currently dealing with this all across the 

country. Further, as a Pell Grant recipient myself, I 

want to be a good steward of the money that I am given 

from the Federal Government. And I don't want it to be 

automatically applied to expensive resources when I could 

be comparing costs with used books or rentals to find the 

most affordable options for me. So the Department's 

proposed change to the rule would give students back the 

ability to shop around. I think that the Department could 

go further by completely eliminating an institution's 

ability to automatically bill for books and supplies as 

part of tuition fees. Allowing institutions to do this if 

the material is not offered elsewhere would maintain yet 

another loophole for publishers. They could make 

customized materials for individual campuses to get 

around this provision, and still automatically bill 

students for them. Thank you.

MR. ROBERTS: Thank you, Annabelle, 

for your comment. Krystil, who do we have next?

MS. SMITH: Next we have Shahrooz 

Moosavizadeh from the Spartans All Inclusive Learning 

program at Norfolk State University.
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MR. ROBERTS: Excellent. Welcome, 

Shahrooz. Can you hear me?

PROF MOOSAVIZADEH: Yes, I can. Happy 

New Year everyone, and greetings from Norfolk, Virginia. 

I'm Shahrooz Moosavizadeh, professor of mathematics and 

the director of the Inclusive Access Program at Norfolk 

State University, NSU. NSU and HBCU institution is home 

to a significant number of first-generation college 

students, where over 90% of our students receive some 

kind of financial assistance. As chair of the Department 

of Mathematics at the time, I introduced the Inclusive 

Access Program at NSU due to the fact that a large number 

of our students simply could not afford the cost of 

course materials, especially the cost of online homework 

software. I began the program with 49 courses in fall of 

2018. It grew to include over 403 sections universitywide in less than four years. Today, the program 

encompasses all courses and sections at NSU with a flat 

rate of $25 per credit hour. No additions, no extra 

charges. Flat 25. That translates into $375 for five 

classes, 15 hours, regardless of the discipline. As 

professor of mathematics, I feel obligated to share some 

data on the success of our program with you. We surveyed 

3,976 of our 5,300 students last academic year, that is 

75% of our student body. I'm happy to report that the 
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saving to our students was $2,539,544, 92% of our 

students said the program saved them time in shopping for 

course materials. 86% claimed the program better prepared 

them for their academic term. 83% reported that the 

program had a positive impact on their academic success, 

91% found it convenient to have their course materials 

bundled and ready for them on the first day of classes, 

83% felt the program provided them with more affordable 

course materials. 89% said they were likely to recommend 

the program to other students. [30 seconds] Spartans All 

Inclusive Learning Program, or the SAIL Program at NSU, 

is today part of the culture of NSU. I conclude with 

expressing my highest support and commitment to the 

success of Inclusive Access programs- program at the 

higher ED institutions nationwide. And I truly am going 

to finish with a question for the committee members. Why 

are we questioning a very successful, entirely studentoriented program today? To change now is a travesty. 

Thank you very much for the time for allowing me to 

address you.

MR. ROBERTS: Thank you for your 

comment. Krystil, I believe we're on our last speaker for 

the day. Who can I introduce?

MS. SMITH: We are. It is Kelly Denson 

from the Association of American Publishers. It looks 
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like Kelly might need to- she's still connecting to 

audio. She might have to accept the join audio button. 

She probably needs to click that.

MR. ROBERTS: I can message her as 

well.

MS. SMITH: I could. Reach out to her. 

Alright, there she is. Alright. And you're on mute now, 

Kelly. 

MR. ROBERTS: Great. Kelly, can you 

hear us?

MS. SMITH: You're still on mute, 

Kelly. There you are. 

MS. DENSON: Okay, can you hear me 

now?

MR. ROBERTS: Yes. Welcome. You will 

have three minutes to address the committee. You'll be 

given a 30-second heads up at 2 minutes and 30 seconds. 

And your time will begin whenever you're ready. 

MS. DENSON: Great. Thank you. Good 

afternoon. I am Kelly Denson, speaking for the 

Association of American Publishers. We urge the 

Department to retain the current provision under cash 

management crediting a student ledgers account rule that 

allows institutions to include the cost of books and 

supplies as part of tuition and fees. Such access and 
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affordability course material programs, such as Inclusive 

Access offer low-cost, high-quality course materials to 

college students and dramatically increase faculty and 

student choice and deliver particularly strong benefits 

to low-income and at-risk populations. By way of 

background, access and affordability programs were 

developed by colleges and universities during the Obama 

Biden Administration, when the Department issued Federal 

guidance, creating an important mechanism for 

institutions of higher learning to include course 

material expenses as part of tuition and fees, with a 

caveat that those materials had to be offered to students 

at a low cost- at a cost below the competitive market 

rate. This move enabled low income students to pay for 

course materials through their Federal grants and loans 

rather than going out of pocket, providing significant 

relief to those struggling to afford their degree. In the 

years that followed the introduction of these programs, 

the positive impact has been nothing less than 

extraordinary. More than 1900 colleges and universities 

from across the country now offer access and 

affordability programs. The response from students has 

been extremely positive as well. In just one example, 83% 

of students surveyed at Norfolk State, as you just heard, 

University, said that such programs had a positive impact 
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on their academic success, and 89% said that they would 

be likely to recommend the program to other students. The 

call to retain the rules is made even more urgent by 

recent independent academic research that found 

substantial increases in course completion rates for 

underserved groups participating in these programs. In 

particular, Black students completion rates were found to 

climb by 21%. In terms of affordability, these programs 

have contributed to a dramatic 57% decline in student 

spending on course materials over the past decade, 

according to independent research group Student Watch. As 

part of that ongoing trend, students now spend an average 

of just 310 a year in the category, according to the 2023 

Trends in College Pricing and Student Aid Report from the 

College Board. In short, these programs are an essential 

tool for making higher education affordable to a broader 

range of Americans. Additionally, these affordability and 

access programs accelerate student access to high quality 

course materials, providing them seamlessly on or before 

the first day of class and dramatically improve student 

outcomes and retention rates. However, the proposed new 

regulation would make it more difficult for students to 

apply their Federal Student Aid to course materials, 

thereby essentially eliminating a program that benefits 

low-income students. Affordability and access programs 
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will, of course, continue to improve and evolve over 

time. We are committed to enhance transparency and 

disclosure for students, but there is simply no good 

reason to threaten the extraordinary progress that these 

programs have made in terms of affordability and improve 

student outcomes [30 seconds] over the past eight years. 

The Department of Education and the current 

administration must act decisively to protect these 

essential programs, preserve the progress that has been 

made over the past decade, and invest in a better future 

for all of our nation's students. Thank you.

MR. ROBERTS: Thank you, Kelly, for 

your comment. Alright. that's going to conclude day one 

of week one of this 2024 negotiated rulemaking. We will 

pick up tomorrow promptly at 10 a.m. eastern to resume 

discussion. But I want to thank all of our negotiators 

and members of the public today for listening in and 

contributing. Thank you.

 
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Zoom Chat Transcript

Program Integrity and Institutional Quality- Session 1, Day 1, Afternoon, 

January 8, 2024 

*Chat was copied as presented, as a result minor typos or grammatical errors 

may be present.

P, Jessi Morales, Student/Borrower to Everyone:

I have my hand up.

Barmak Nassirian (P) Vets to Everyone:

I propose deleting ", without" and replacing it it with "after" 

in the text below: (A) Tuition, fees, and institutionally provided 

room and board, as provided under paragraph (c)(1)(i) of this section, 

without obtaining the student's or parent's authorization

P. Jo Blondin, Community Colleges to Everyone:

My alternate, Michael Cioce, has a comment.

Joe Weglarz - P (NACUBO) to Everyone:

My alternate, Dominick Chase may have a comment

P Jason Lorgan Public 4-year Higher Ed to Everyone:

I agree with Jillian. It appears those who list books more 

transparently are being singled out for their transparency. If a 

school buries the book charge in tuition, it is OK and if schools are 

transparent, it is not ok.

Barmak Nassirian (P) Vets to Everyone:

I agree with Jillian: schools can charge tuition and include 

"free books/supplies" as part of that. The scenario we're talking 

about is where tuition is set at a given, and then additional charges 

for books/supplies are automatically paid if the material is otherwise 

unavailable from other vendors/sources.

P, DC, HBCUs, TCUs, MSIs to Everyone:

My alternate @A - D'Angelo Sands - HBCUs, TCUs, MSIs will be 

stepping in for me for a few.

Barmak Nassirian (P) Vets to Everyone:

 I can answer the question

P - Carolyn Fast, Consumer/Civil Rights to Everyone:

My Alternate Magin Sanchez is going to come on to make a comment.

P, Jillian Klein, Proprietary Instit to Everyone:

Replying to "I agree with Jillian..."

 

I believe current state, institutions (at least this is what we 

do as at very least a best practice) in this scenario would still have 

to figure out what portion of what is being charged for tuition is for 

books and provide an opt out. If not, what you are suggesting actually 

makes the problem worse -- because institutions could hide exorbitant 

prices for books in "tuition"

P, Jessi Morales, Student/Borrower to Everyone:

Stable doesn’t necessarily mean affordable.

A - Dom Chase, Business Officers to Everyone:

In an environment where inflation is increasing, stable pricing 

in the aggregate is a price cut in real terms.

P - Erika Linden - Private/Nonprofit to Everyone:

Alternate Scott Dolan will be commenting for private nonprofit
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Kevin Wagner-FMCS Facilitator to Everyone:

Just a reminder that comments by the negotiators are limited to 3 

minutes. Please be mindful that comments should be used to bring new 

dialogue and not reiterate or offer support of another idea.

P, Jillian Klein, Proprietary Instit to Everyone:

Greg/Denise, the scenario I am mentioning is the student received 

$10 in FSA funds and is owed a $100 refund, what is ED's authority to 

place requirements on the $90 that are from non-TIV sources.

P. JoEllen Price, Financial Aid Administrators to Everyone:

Alternate ZacK Goodwin has a question.

Barmak Nassirian (P) Vets to Everyone:

My alternate will step in to make comments

(A) Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Question: Does the proposed revision to §668.164(h)(1) mean that 

no credit balance on a student's account, when issued but cannot be 

delivered to the student, could escheat to the State?

Joe Weglarz - P (NACUBO) to Everyone:

So sorry, need to leave for an appt. My alternate will be in my 

seat

Carolyn Fast to Everyone:

I have a comment, but it relates to cash management in general, 

so would like to make the comment after we conclude discussion of this 

section

P, DC, HBCUs, TCUs, MSIs to Everyone:

@department of Education, just a notice, can you ensure all 

mention of "days" are either stipulated as calendar or business 

"Days".

P, Jillian Klein, Proprietary Instit to Everyone:

Reacted to "@department of Educa..." with ���

P. Jo Blondin, Community Colleges to Everyone:

Agreed, DC

Dave Musser, ED to Everyone:

Cash management Dear Colleague Letter referred to by Greg a 

moment ago: https://fsapartners.ed.gov/knowledge-center/library/dearcolleague-letters/2022-10-13/cash-management-tier-one-and-tier-twoarrangements

Barmak Nassirian (P) Vets to Everyone:

everything we hear about "inclusive access" was said about 

preferred lender lists, the big difference being that not even the 

lenders went so far as to demand being the automatic choice. All the 

good that "day one" access provides can still be achieved with an optin system.

P, DC, HBCUs, TCUs, MSIs to Everyone:

@Department of Education, I would propose to change wording from 

health and safety to financial reason. Or we remove the entire wording 

and only discuss that universities must only have an opt-in option for 

cost of books and supplies as part of tuition and fees.
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