Committee Meetings - 01/21/22 

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 DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

INSTITUTIONAL AND PROGRAMMATIC

ELIGIBILITY COMMITTEE

SESSION 1, DAY 4, AFTERNOON

January 21, 2022

On the 21st day of January, 2022, the

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

to 4:30 p.m., before Jamie Young, Shorthand Reporter in

the state of New Jersey.
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Committee Meetings - 01/21/22

P R O C E E D I N G S

MR. ROBERTS: Welcome back, everyone. 

Hope you enjoyed the short lunch break. It is the 

committee's goal to finish up on issue paper number six 

and finish issue paper number seven prior to going into 

our public comment period today, beginning at 4:00 p.m. 

So, with that, Greg, I'm happy to turn it back over to 

you and the committee, but I do just want to thank 

everyone, all the negotiators. I want to thank everyone 

for all their thoughtful comments throughout this week. 

As you finish up issue paper six, please try to keep 

comments general in nature with any serious concerns 

that you want to raise for the Department. Because as 

always, the expectation is that the Department will take 

back all your suggestions that you've been emailing and 

putting them in the chat prior to week number two. So 

the goal here is to move somewhat expeditiously in issue 

paper number seven. So, with that, Brad, I see your 

hand, but Greg, is there anything that you want to kick 

us off with?

MR. MARTIN: The discussion about the 

elements in E, I believe, is where we left off, and we 

had a couple of comments related to that. And just to 

remind everybody, that's if the institution is 

provisionally certified, the Secretary may apply such 
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Committee Meetings - 01/21/22

conditions as are determined to be appropriate to the 

institution, including and there was we went over a list 

and some discussions there, again reiterating that that 

list is not an exhaustive list. And so, I'll continue 

with discussion.

MR. ROBERTS: Great. So Brad, I see 

your hand. You're welcome to start, but I just want to 

welcome back into the table on behalf of two-year public 

institutions. Brad, please go ahead. We can't hear you 

right now, Brad.

MR. ADAMS: Thank you. Thank you. Real 

quick, Section 32 E, paragraph one, risk of closure. The 

comment is that an institution at risk of closure may 

need the ability to make necessary changes to ensure it 

does not close, which might include new or revised 

programs or arrangements with other institutions. So how 

is the Department going to determine that an institution 

is at a risk of closure. Proposal that the Department 

would have the authority to place a wide range of 

restrictions on the institution at the risk of closure, 

but that concept is wide open. I think we need a lot 

more detail regarding how that decision will be made and 

what metrics and criteria would be used to be 

comfortable with the list of the proposed restriction.

MR. MARTIN: Thank you. I will take 
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that back, I would say that where we have placed an 

institution on provisional certification, we do have 

cause to believe that there are problems with the 

institution that we need to be aware of. And again, we 

have a specific concern about precipitous closure 

because of how that affected students in the past. So, 

we do take special care to consider that possibility, 

but we'll take back the consideration. If you have 

language that you would like us to consider, let us 

know.

MR. ADAMS: We also care about the 

students. We just want to make sure we understand the 

criteria. On number eight, the Department here is 

proposing to require clearance of marketing materials 

that the institution has been alleged to have engaged in 

a misrepresentation and the school is on a provisional 

PPA. Let me remind you that a school is automatically on 

a provisional PPA when a change of control occurs. if 

one student makes a claim and that claim is unwarranted. 

Basic due process demands that the Department give 

institutions time to respond to allegations. I don't see 

anything like this built into the proposal. And then on 

timing, I think all institutions that are subject to 

this requirement would fear that if they send marketing 

materials to the Department to be reviewed, that it will 
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go to a black hole and they wouldn't hear back for 

months. For example, on Tuesday, we were talking about 

how several states had submitted applications for the 

ATB to the Department. Those applications were 

automatically approved because the Department couldn't 

process them within six months. My question is, is the 

Department really going to hire additional staff to 

conduct reviews of these marketing materials, all these 

equity disbursements and lawsuits we discussed 

yesterday? To be crystal clear, the Department needs a 

process in place to ensure timely review of those 

materials. The largest school in the country is a 

nonprofit in the Northeast. It spends 144 million 

dollars a year in marketing. Yet I don't believe anyone 

in the Department is reviewing their marketing 

materials. Thank you.

MR. ROBERTS: Thank you, Brad. Ernest, 

please.

MR. EZEUGO: Yes, thank you. Yeah, I'd 

like to focus in on part one romanette three here around 

holds on student transcripts over a de minimis amount, I 

presume prior obviously to a school's closure in the 

Secretary Secretary's [inaudible]. And I'd like to 

consider recommending that the Department cross out the 

amount of over a de minimis amount or a particular 
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amount and just consider releasing holds on transcripts 

once the Secretary deems that a school may be at risk of 

closure at all or any circumstances here. You know, 

thinking from a student perspective, if I was at an 

institution that I had, awareness was even being 

considered as a risk for closure, I would want to 

transfer. As I know the Department knows, it's kind of 

highlighted by announcements made by Secretary 

[inaudible] as well as the [inaudible] this week. 

Transcript holds for certain amounts have kind of a 

precipitous effect on a student's ability who may owe 

money to an institution to transfer to another 

institution. I think this is particularly the case for 

students from historically disadvantaged and 

unconsidered backgrounds, particularly black and Latino 

students, and to the extent that it makes sense where 

there is no kind of specific line of thought for this 

consideration of over a certain amount prior to closure. 

I guess that would just be my recommendation that the 

Department considers releasing holds altogether once the 

school is kind of in that category of being at risk for 

closure.

MR. ROBERTS: Thank you, Yael, please.

MS. SHAVIT: To Ernest's point, just 

from the experience of an enforcement body, I want to 
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just provide the context that it has been even for state 

AGs, unbelievably difficult and is often in many times 

fruitless effort to get transcripts for students after 

schools close. So, I agree. I think the Department 

should prioritize, ensuring that students have access to 

their transcripts and that they're not held hostage by 

these institutions. Beyond that, I'm glad to see that 

there's language here about record retention policies. 

But in the same vein, I want to note that we have had an 

unbelievably difficult time getting records from schools 

after the schools have closed and some instances in the 

lead up to school closures. And that has a cascading 

effect for borrowers. Not only does it affect their 

ability to continue their education in different 

contexts, but borrowers who may be entitled to relief of 

different types are just unable to get it because they 

just they don't have what they need to do it. So, I 

would suggest, and I'll think if there's language to be 

proposed here that we consider strengthening the 

recommendation language to be a little clearer about 

what’s expected from the schools in those [audio].

MR. MARTIN: Thank you.

MR. ROBERTS: Debbie, I see your hand.

MS. COCHRANE: Thank you. I agree with 

all of Yael's comments, and I think I would also suggest 
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for both one and two, the one asks institutions to 

submit the agreement to the institution's recognized 

accrediting agency. I would ask that state authorizing 

agencies also be added to that. And I think that the 

same reporting requirements should apply for two as 

well with respect to the records retention plan. Again, 

states and accrediting agencies may be closer to the 

ground, may be the first line of defense for student 

questions, and having been in the loop on those would be 

incredibly helpful and important. Secondarily, is there 

a definition of records retention plan and what exactly 

would be included in there? And I'm happy to submit some 

language for consideration but didn't want to start from 

scratch if you already have something.

MR. MARTIN: We do have a section of 

record retention, but I don't believe we have any 

definition of record retention plan. So, if you're 

suggesting that we define the records retention plan, 

you can submit language to that effect.

MS. COCHRANE: Would you be able to 

point me to the record retention? I'm happy again to 

draft something, but that would be a good starting 

place.

MR. ROBERTS: Debbie, is it okay if 

he takes a second to [interposing]
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MS. COCHRANE: Absolutely. 

[Interposing] make sure we're helping students, it's 

important we get certain pieces of information.

MR. ROBERTS: Gotcha.

MR. MARTIN: You can move to the next 

comment 

MR. ROBERTS: Yeah, yeah, Amanda, 

please.

MS. AMANDA MARTINEZ: I may be reading 

this wrong, but originally so I have two, one question 

for Ernest's previous comment about making suggestive 

language changes so that it's more broader and actually 

addresses the issue of transcript withholdings? So 

support that and support in whatever comes forward to 

make that stronger and actually applicable to students 

in their lives, instead of just kind of making it a 

mention there. In specific narrowed instances, we don't 

want those narrowed instances. We want to make sure it's 

actually solving the problem that's at hand here, which 

is continuous, it's continuing to be a larger, larger 

problem. I have a suggestion, a question on I, the 

submission of a teach out plan or agreement. To me that 

reads, and like just correct me if I'm wrong, just it's 

more clarifying purposes. Does this mean that an 

institution can submit a teach out plan a, but not an 
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agreement or they could submit an agreement and not a do 

either? or. I'm just I'm concerned about the teach out 

plan, is that referencing to other regulations that 

clarify the details of what should be included in that 

teach out plan? So I'm concerned about articulation 

agreements and ensuring that the transfer of credits, 

whatever can be used by the student because in forprofit colleges, we know that for the most part, when 

schools close or you know students realize that their 

credits are actually non-viable when they're trying to 

transfer or trying to maybe reenroll after trying to get 

a second chance after they've learned that their school 

is a fraud or misled them, they try to go back to 

school. They can't because they're starting from zero. 

So, I'm just wondering how strong that language needs to 

be and if there's any holes there on teach out plan. 

Specifically, then clarifying my understanding of can 

they submit a plan covers itor is there an agreement 

with institutions with the Department on how exactly 

that plan is going to go? Then my suggestion is to add 

another list point here of ensuring federal civil rights 

laws are applicable, that they're applied, that if the 

SecretaryMR. WAGNER: Thirty seconds remaining, 

Amanda.
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MS. AMANDA MARTINEZ: I could submit 

more language, but I just want to add a separate 

additional list to ensure that federal civil rights laws 

are being monitored at all institutions, and that can be 

added here in this part.

MR. MARTIN: Yeah, with respect to 

civil rights laws, we'll take that back. The teach out 

plan is, as you know, would be the actual plan the 

school has for teach out, which will differentiate from 

teach out agreements. So, I'm not sure exactly what 

you're asking there. We would be requiring from a 

school the actual plan it has to execute that, teach out 

is what we're looking for to see that students have some 

mechanism for completing their program. The records 

retention citation is 668.24 in the section on records 

retention.

MR. ROBERTS: You got that Debbie? You 

heard that? Excellent. Okay, Brad, go ahead.

MR. ADAMS: Thank you. In the 

convergence section nine, subsection F paragraphs one 

and two, the wording stating quote other conditions that 

the Secretary may deem appropriate seems to create a 

sort of purgatory for institutions that convert from 

for-profit to nonprofit status. It seems like Department 

could delay forever on improving an institution's 
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request to convert to a nonprofit status. Generally 

speaking, it does not seem like keeping a school in 

limbo for an extended period is fair to the 

organization, but I also want to highlight the long-term 

uncertainty typically stresses organizations because it 

undermines efforts to plan and use resources most 

efficiently. This will be bad for schools or students, 

their employees, and the communities they serve. If the 

Department has two years of audited financial 

statements, compliance audits, and they are acceptable 

and they meet the other metrics here stated for two 

years, then the Department should agree to let the 

conversion and let the school move on, approve the 

conversion, and let the school move on.

MR. ROBERTS: I just want to note in 

the chat if folks could. I think we're just going to 

finish up with G before we head off to F. [Inaudible] 

apologies.

MR. ADAMS: I'm sorry.

MR. ROBERTS: You're good, no that's 

okay.

MR. ADAMS: But yeah, so my comment 

was in F. 

MR. ROBERTS: Sure. Sure. Oh okay, 

gotcha. So, Carolyn.
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MS. FAST: Thank you, and I just 

wanted to quickly reiterate that these conditions are 

things that the Department already has authority to do. 

They're just providing sort of extra notice through this 

reg. So, to Brad's point, when he was objecting about 

the possibility that they could, the Department could 

impose a condition to review marketing that's already 

something that exists in the Department's authority. 

This is just articulating it to provide notice to 

schools that might be subject to it after they've been 

found to have potential problems. But anyway, I also 

just wanted to add for the Department's consideration 

that there are other conditions that they might consider 

adding to the list. So, for example, if a school has in 

a program review or through an investigation by a state 

or federal agency been found to have significant issues, 

including, for example, related to student outcomes, it 

might make sense to include requirements to report on 

things like graduation and retention rates or other 

similar metrics, and to even have to improve those if 

that's if that's a problem, as part of a condition of 

provisional certification.

MR. MARTIN: Thank you.

MR. ROBERTS: Yael, please. 

MS. SHAVIT: Just very briefly. To the 
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point about marketing, I just want to know that this is 

maybe like the number one thing that we see 

institutions, for-profit institutions in particular 

doing that just results in catastrophic harm to 

borrowers. I think it's essential the Department 

maintain the authority that it already has to Carolyn's 

point to be thoughtful and aware of these issues and 

play a role where there are real risks to ensure that 

schools can't defraud students and that particularly 

schools at risk of precipitous closure, can't use 

marketing materials in a manner that you know provides 

material and information to students. That's simply 

incorrect and that misleads them and deceives them into 

enrolling in school they shouldn't be enrolling in. To 

Brad's point about conversions, I think it's worth 

noting that there are many inherent risks associated 

with for-profit and nonprofit conversions, and more than 

that that these transactions can take many different 

forms and raise unique concerns. The Department should 

prioritize making sure that it has [audio] possible to 

have case specific requirements associated with these 

types of conversions.

MR. ROBERTS: Thank you, Barmak.

MR. NASSIRIAN: Just a quick point 

that the mere, on teach out plans, it shouldn't be just 
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a mere submission of a teach out plan, any teach out 

plan, no matter how science fiction it may be, it has to 

be a teach out plan that is acceptable to the Secretary, 

the accreditor, and to the authorizer.

MR. ROBERTS: Thank you. Jessica, 

please.

MS. RANUCCI: I was just going to add 

for potential inclusion on the list of [inaudible] 

prohibition on participating in ATB programs that we're 

worried about. You know, we want ATB programs to be the 

best that they can be, I think maybe the Secretary's 

discretion to prohibit some schools on provisional PPAs 

who participate would make sense to me.

MR. ROBERTS: Oh, great. Greg, do you 

want to do a quick, quick temperature check on E and 

then move right into F?

MR. MARTIN: Sounds good, Brady. 

MR. ROBERTS: Excellent. Alright. If 

people could hold up those thumbs nice and high at the 

center of their screen. Temperature check on the 

entirety of section E, as currently read. Thank you. I 

do see one thumb down. You are more than welcome to come 

off of mute and add anything new. Alright, great. Thank 

you. So, moving right along to F. Greg and Aaron, do you 

want to briefly tee us up for that section?
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MR. MARTIN: Yes. Thank you, Aaron. 

So, we are moving to section F. If a proprietary 

institution seeks to convert to nonprofit status 

following a change in ownership, the following 

conditions will apply to the institution following the 

change of ownership, in addition to any other conditions 

the Secretary may deem appropriate. The institution must 

continue to meet the requirements under 668.28 A and 

668.28 B until the Department has accepted, reviewed,

and approved the institution's financial statements and 

compliance audits that cover two complete consecutive 

fiscal years with passing 90/10 reporting under its new 

ownership or until the Department approves the 

institution's request to convert to a nonprofit status, 

whichever is later. Department must continue, the 

institution rather must continue to meet the gainful 

employment requirements of subpart two of this part 

until the Department has accepted, reviewed, and 

approved the institution's financial statements and 

compliance audits that cover two complete consecutive 

fiscal years under its new ownership or until the 

Department approves the institution's request to convert 

to nonprofit status, whichever is later. And the 

institution will be required to submit regular and 

timely reports on agreements entered with its former 
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for-profit owner or affiliated or related persons or 

entities so long as the institution participates as a 

nonprofit institution. And that's the entirety of F. So,

I'll open it up for comment.

MR. ROBERTS: Thank you. Alright. 

Opening up for any comments. Okay with that and noting 

that, Brad, we did we did previously hear your comment. 

Do we want to take a temperature check on this? 

MR. MARTIN: Go ahead.

MR. ROBERTS: Excellent. I do just 

want to note that Johnson is in for legal aid, so I 

apologize for missing that. Welcome to the table, 

Johnson. So, if I could again see people's thumbs for 

section, the entirety of Section F. I see one thumb 

down. Brad, anything you'd like to add?

MR. ADAMS: It's stated for the 

committee, but just to be clear, I like that one to 

three are measurable items to achieve. I haven't opined 

on whether or not I agree with them, but at least 

they're measurable. The concern is, in addition to other 

conditions the Secretary may deem appropriate is an 

unmeasurable item. I do not know what that means.

MR. MARTIN: Thank you.

MR. ROBERTS: Appreciate that. And so, 

Greg, I know that we have section G and then I'm sitting 
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down, we have that one area of the. Do you want to 

briefly walk us through G, and you want to incorporate 

the deletion in our discussion?

MR. MARTIN: All I can say about G is 

we've just re-lettered the paragraphs, we haven't done 

anything there, so I think we can move on to 668.43.

MR. ROBERTS: Okay. So, Aaron, if you 

want to share the document 668.43, institutional 

information.

MR. MARTIN: So here we are in 668.43 

A 5, institutional information that the institution must 

make readily available to enroll the prospective 

students under this subpart includes but is not limited 

to the academic program of the institution, including 

all the romanettes you see there and going down to 

romanette five, which we have deleted, reminding you 

that in 668.14 B 32, we proposed to require all programs 

that lead to occupations requiring programmatic 

accreditation or state licensure to meet those 

requirements that renders the disclosure unnecessary. It 

required disclosures about states in which the 

institution did not meet, did, did or did not meet the 

licensing requirements. Thus, we propose to eliminate 

the language in the disclosure section of the 

regulations. I will stipulate that we've heard the 
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comments that there might be other disclosures which we 

should consider in lieu of this, and we've got that 

language, those requests. This only has to do with 

deleting the actual disclosure language that relates to 

the requiring. Well, what this required was the 

informing students of whether they met, but if we're 

going to require that they do, that this specific 

disclosure would become redundant. So, I'll open the 

floor for discussion on this, on 668.43.

MR. ROBERTS: Great, Kelli, I see your 

hand first.

MS. PERRY: Thank you. I don't, I'd 

actually like to go back, I don't know if I was sleeping 

and I missed it, but I thought G was new and E was 

renamed to H. So, where it starts if an institution is 

initially certified as a nonprofit institution, just two 

points questions actually clarification. In G, where it 

talks about the following conditions will apply if an 

institution upon initial certification or following the 

change in ownership. And then it goes on to say, in 

addition to any other conditions that the Secretary may 

deem appropriate. What, what is the intent there, I 

guess? And then my second question is in two in that 

section where it talks about that the institution will 

submit regular and timely reports as it relates to 
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taxes. For how long? Is that until the certification is 

approved?

MR. MARTIN: Right. So the relettering, that's just the. Yeah, we re-lettered the 

paragraphs and just so E became H.

MS. PERRY: But what about G? Because 

in my document, it's red text, which to me means it's 

new, right?

MR. ROBERTS: Oh, you know what? 

You're absolutely right. I elided G, didn't I? I don't 

think we discussed G, did we?

MR. ROBERTS: We breezed by it, yeah. 

MR. MARTIN: Yeah, I am very sorry 

about that. You're absolutely correct about that. Did 

you your other comments? I'm sorry. I really apologize 

for that omission. By the end of the week, my eyes are 

starting to give way. Did you did you have other did you 

have any, were your comments related to anything above 

G? I just want to make sure.

MS. PERRY: No, no. It's it's all in 

G.

MR. MARTIN: Okay, I'm sorry. My 

mistake. So, let's go back and review G then.

MR. ROBERTS: Yeah, right, right.

MR. MARTIN: My mistake and I offer 
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wholehearted apologies for that. So, let's not skip G at 

all. Not my intention. If an institution initially 

certified as a nonprofit institution or it has undergone 

a change of ownership and seeks to convert to nonprofit 

status, the following conditions will apply to the 

institution upon initial certification or following the 

change of ownership in addition to any other conditions 

the Secretary may deem appropriate. The institution will 

be required to submit regular and timely reports on a 

accreditor and state authorization agency actions and

any new servicing agreements until the Department has 

accepted, reviewed, and approved the institution's 

financial statements and compliance audits that cover 

two complete consecutive fiscal years following the 

initial certification or two complete fiscal years under 

its new ownership until the Department approves the 

institution's request to convert to nonprofit status, 

whichever is later. And the institution will be required 

to submit regular and timely reports on communications 

from the Internal Revenue Service or any other state or 

foreign country related to tax exempt or nonprofit 

status so long as the institution continues to 

participate as a nonprofit institution. So in your 

question related to the required to submit timely, 

regular and timely reports that would be for the 
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duration of the time it chooses to, it wants to 

participate as nonprofit so that there's no time limit 

on that. And then I'm sorry, I'll go back. And can you 

review your other comments on G that you had as I'veMS. PERRY: Yeah, I can. But if we can 

stick with two just based on your response, I'm not sure 

I'm following what that means. As far as for the entire 

time that it wishes to participate as a nonprofit 

institution. Maybe I'm just not understanding this.

MR. MARTIN: We want, we want to be. 

So if there's any communications between any between the 

IRS or the or the Revenue Service of any other country 

that relates to that tax-exempt status, we want to see 

it, if it affects the tax relief, if it affects the 

status of that organization as tax-exempt or nonprofit. 

So because that could happen at any that could happen. I 

mean, there are actions we take their actions that those 

bodies take and if they were to some action that they 

took could hypothetically affect the status as a 

nonprofit organization. So we would want to see that 

[interposing]

MS. PERRY: Specifically as it relates 

to the nonprofit status. Okay. My other question was in 

G itself and the last few words in that as it relates to 

in addition to any other conditions that the Secretary 
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may deem appropriate. Because I'm reading this as it has 

to do with upon initial certification or change in 

ownership. Can you give an example of another condition 

that might be beyond those two?

MR. ROBERTS: Off the top of my head, 

I can't think, I'll turn it over to Steve. Maybe he has 

an example of one or two he could offer.

MR. FINLEY: Sure, some types of 

restrictions for initial certification there, 

provisionally certified institutions are required 

usually to apply for new location approval for new 

locations or to add new programs beyond the scope of 

their existing accreditation. In some circumstances, if 

there were concerns about the application, there might 

be a prohibition for a certain time period before they 

would even be allowed to apply to add a new location or 

a new program. So it really is tied to the specifics of 

the applications, and this is just to note that there 

can be additional and that's already done, right? That's 

already inherent in the authority of the Department to 

impose limitations on initial approvals or even 

certifications or changes of ownership.

MS. PERRY: Okay. Thank you.

MR. MARTIN: Again, thank you, Kelli, 

for pointing out the omission was very important.
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MR. ROBERTS: I was sleeping on my 

role as a facilitator. Greg, I don't see any other hands 

for G. Do we want to do a quick temperature check on 

that?

MR. MARTIN: Yes, please. Let's do a 

temperature check on that since we did not do that 

earlier.

MR. ROBERTS: Alright. Another one, if 

people want to put their thumbs right in the center of 

their screen, just hold them up just so we can take note 

where the committee is at this point. Alright. Not 

seeing any thumbs down. So thank you and thank you 

again, Kelli for pointing that out. Now, Greg, do you 

want to, I'm going to scroll down on my end to that last 

section, 668.43.

MR. MARTIN: Yeah, I think we already 

went over that, and I went and I just wanted to 

acknowledge, I know we had some comments before where 

when we went over that in 668.14 B 32. But if somebody 

else has something additional, they'd like to say, 

understanding that we do, we have heard the concern 

about other disclosures which may be necessary.

MR. ROBERTS: Jessica just wanted to 

note, is back in for legal aid, please.

MS. RANUCCI: Thanks. Yeah, I just 
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want to I think that's slightly different than what 

people said earlier, and I think it really goes back to 

the point Carolyn made. But you know, I think we've 

talked about requiring licensure for the where the 

school is located or where it is state authorized or 

potentially even where it teaches students so 

[inaudible]. But there are all sorts of circumstances in 

which, you know, a student is living in Indiana but 

intends to move to Massachusetts after graduation. And 

even if they're attending a school in Indiana, actually 

knowing that they can't get the job in Massachusetts may 

be relevant. So I would not reflexively cut these. I'm 

not the world's biggest fan of disclosures. I'm not 

sure, this is not the best way to get the job done. I 

think the other part is, but there still may be room 

here because students move, that's the reality.

MR. MARTIN: Thank you.

MR. ROBERTS: Thank you. And Greg, I'm 

not seeing anything else that we want to wrap up issue 

paper number six with a quick check on 668.43.

MR. MARTIN: Yes.

MR. ROBERTS: Okay. Alright. And we 

all want to do it. We're all very excited. Thumbs right? 

Middle of the screen, nice and high. I am not seeing any 

thumbs down. Great, okay. Thank you very much. Greg, do 
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you want to move us right into number seven, 90/10 rule?

MR. MARTIN: Yes, but just give me 

like a minute here to pull that up and for Aaron and 

Vanessa to get that up on the screen.

MR. ROBERTS: Yeah. And as that 

happens, I just want to let everyone know that Travis is 

coming to the table on behalf of service members and 

vets, Jaylon is coming to the table on behalf of 

consumer advocacy groups. Johnson is back for legal aid 

organizations and Carney is going to be in for students 

and student loan borrowers. So welcome to that group for 

joining us. And, Greg, whenever you are ready, I think 

Aaron has the document up.

MR. MARTIN: Okay. What better way to 

close off Friday and the end of our first round of 

discussions than with 90/10? So we are looking at issue 

paper number seven again Title IV revenue and nonfederal 

education assistance funds. You can see that for those 

of you who are familiar with the current section, the 

regulation that we have renamed it to accommodate the 

statutory change, so we provide the applicable statutory 

citation and the regulatory citation in 668.28. I want 

to offer up front that for those of you familiar with 

90/10, we are not providing an Appendix C at this point. 

Appendix C is the actual methodology for calculating 
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Committee Meetings - 01/21/22

90/10, so we will be providing that at the next at the 

next, at the next session. So let's begin with a summary 

of the issues. And we referenced section two, 2013 of 

the American Rescue Plan that amended the applicable 

statute to require at least 10 percent of a proprietary 

institution's revenues to be derived from sources other 

than federal educational assistance funds. This change 

means that the numerator of the revenue calculation, 

which formerly consisted only of Title IV funds, will 

now include federal funds that are disbursed or 

delivered to or on behalf of a student, which we will 

define collectively as federal educational assistance 

funds. We proposed to amend 34 CFR 668.28 to account for 

the statutory language, statutory change, rather 

requiring that a proprietary institution's revenue be 

derived from sources other than federal educational 

assistance funds. Additionally, we are proposing changes 

to 34 CFR 668.28 that would close the existing loopholes 

in the 90/10 calculation and provide clarification on 

the treatment of revenue. Specifically, those changes 

would designate as federal educational assistance funds, 

any educational assistance for students sent directly to 

the institution by the awarding agency, as well as funds 

to flow directly to students where the authorizing 

federal agency provides funding data to the institution. 
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Committee Meetings - 01/21/22

And we note, as part of our implementation, the 

Department would create data sharing arrangements with 

federal agencies to provide student level funding data 

to institutions, including funds paid directly to 

students by that awarding agency. We would publish an 

annual notice in the Federal Register, indicating which 

agencies have such an arrangement monitoring the current 

requirement in 34 CFR 668.28(a)(4) with respect to Title 

IV program funds, federal educational assistance funds 

disbursed or delivered to or on behalf of a student 

would be presumed to pay the student's tuition fees or 

other institutional charges, regardless of whether the 

institution credits the funds to the student's account 

or pays the funds directly to the student, except to the 

extent that the student's tuition fees or other charges 

are satisfied by the sources identified in 668.28(a)(4) 

romanette I through romanette 4, referred to in the 

90/10 calculation as funds received first. This would 

include those funds paid directly to students by 

awarding agencies up to the amount of cash payments made 

to the institution by the student. We proposed to 

disallow the sale of receivables, including from 

institutional loans as nonfederal educational assistance 

revenue. Section 487(d)(1)(b) of the HEA requires that 

in performing in 90/10 calculation, an institution may 
29

Committee Meetings - 01/21/22

only include revenue as revenue. Those funds generated 

by the institution from tuition fees and other 

institutional charges for students enrolled in programs 

eligible for assistance under the Title IV programs. 

Activities conducted by the institution that are 

necessary for the education and training of the 

institution, students or certain noneligible training 

programs. Revenue that results from the sale of 

receivables is not derived from tuition or fees or other 

institutional charges for students enrolled in the 

program eligible for federal education assistance and

does not indicate a willingness on the part of the 

student to pay cash for a portion of their programs. We 

would also require institutions to award, disperse, and 

request Title IV funds according to established 

parameters. Loss of eligibility under 90/10 occurs only 

after two consecutive years of failing rates, because 34 

CFR part 668 imposes no timeframe for requesting federal 

funds. Institutions can avoid a loss of eligibility 

under 90/10 by deferring drawdowns of Title IV funds 

from G5, which is the mechanism through which 

institutions request funds until the subsequent fiscal 

year. We propose to address this loophole by adding a 

disbursement rule requiring proprietary institutions to 

disburse funds to eligible students and request those 
30

Committee Meetings - 01/21/22

funds from G5 prior to the end of the institution's 

fiscal year. We would also limit the revenues from 

activities conducted by the institution to those derived 

from such activities necessary for the education and 

training of a student under the HEA institutions may 

count as revenue activities conducted by the institution 

that are necessary for the education and training of the 

institution's students. Only funds generated from 

services provided by students may count as revenue for 

90/10 purposes. Such revenue does not include revenue 

derived from product sales. Proposed changes to 34 CFR 

668.28 would require that institutional accounting 

records clearly identify the service revenue not related 

to product sales that is unique to the service 

activities performed by the student in the program and 

necessary for the education of those students. Finally, 

we would clarify under what circumstances funds paid by 

a student or on behalf of a student, by a party other 

than the institution for an education or training 

program that is not an eligible program may count as a 

revenue for 90/10 purposes. We proposed that only the 

funds generated from non-eligible programs offered at 

the eligible institution. I'm sorry, offered at the 

eligible location of the institution where the 

institution itself provides the education may be counted 
31

Committee Meetings - 01/21/22

as nonfederal educational assistance revenue for the 

purposes of 90/10. This would preclude revenue from 

programs where the institution merely provides 

facilities for test preparation courses, acts as a 

proctor, or oversees a course of self-study. So with 

that, I'm going to move into the regulatory text itself, 

our proposed red lines, and we're looking at 668.28. We 

see the change there reflecting the statutory, the 

statutory changes, and we note that here and throughout 

the paper, we have changed references to non-Title IV 

revenue from non-Title IV revenue rather to nonfederal 

revenue. And this does incorporate those statutory 

changes. So I'll begin with (a)(1), calculating the 

revenue percentage. The proprietary institution meets 

the requirements in 668.14(b)(16) that at least 10 

percent of its revenue is derived from sources other 

than federal funds by using the formula in Appendix C, 

which I referenced earlier of this subpart to calculate 

its revenue percentage for the latest complete fiscal 

year for purposes of this section for any annual audit 

submission for a proprietary institution, institution's 

fiscal year beginning on or after January 1, 2023. 

Federal funds used to calculate the revenue percentage 

include Title IV HEA program funds and any other 

educational assistance funds provided by a federal 
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Committee Meetings - 01/21/22

agency directly to an institution or student. The 

Secretary identifies the federal agency and the other 

educational assistance funds provided by that agency and 

a notice that will be published in the Federal Register. 

For any fiscal year beginning prior to January 2023, 

federal funds are limited to Title IV HEA funds. And 

I'll because this is a pretty dense [interposing] 

section, I'm going to pause here and allow discussion on 

what we just talked about in (a)(1).

MR. ROBERTS: Alright. Any comments or 

questions from the committee on paragraph A subparagraph 

one? Bradley, please. 

MR. ADAMS: Good afternoon, 90/10 

negotiations on a Friday afternoon. I can't imagine a 

better way to spend our days, an accountant's dream, I 

must say. But I just got to start with an opening 

statement, and I'll have various comments. This is a 

proprietary school issue. So nonetheless, I have to 

begin, by stating on the record that we are strongly 

opposed to the entire 90/10 concept. That being said, we 

understand that 90/10 is statutory. Rule does not 

protect students or promote institutional excellence. To 

be clear, there is no demonstrated relationship between 

the quality of an institution and how students pay for 

their education. There are, however, numerous 
33

Committee Meetings - 01/21/22

destructive consequences of this rule and incentivizes 

schools to turn away, tell students that are most in 

need, and master's and doctoral graduate program 

students borrowing grad PLUS loans and instead seeks out 

those who are less likely to need aid or represent a 

credit risk. It requires institutions and the government 

to dedicate an extraordinary amount of time and 

resources to understanding, complying with and enforcing 

the rule instead of allocating those resources, better 

programs, and enforcement of quality assurance programs 

and metrics that are proven to work. That being said, 

given the [inaudible] proprietary schools, I'll have 

several comments throughout this agreement, and I'll get 

back in line. Thank you.

MR. ROBERTS: Thank you. And you just 

want to make a brief notice on folks who've just joined 

us and want to welcome Jamie back to the table, as well 

as Emmanual on behalf of private nonprofit. So with 

that, Travis go ahead.

MR. HORR: Hi, thank you. I also 

wanted to make an opening statement about 90/10 from our 

perspective of a service member and veterans and who 

this rule has, this loophole has kind of affected over 

the years or has affected over the years. First of all, 

closing the 90/10 loophole has been one of the top 
34

Committee Meetings - 01/21/22

education, if not the top education priority for a large 

number of service member of organizations that represent 

service members, veterans and family members and 

military connect students. And we're very happy that 

that loophole is closed and that all federal funds will 

be counted, and we're here to ensure that it's closed, 

shut tight. You know, the post-9/11 GI Bill is a 

massively popular program from my organization, Iraq and 

Afghanistan Veterans of America. Over 90 percent of our 

members utilize it in some way. It's truly 

transformational. I wouldn't have gone to school 

personally without it. I know many veterans that 

wouldn't have gone to school without this program. And 

that's just the GI Bill, not to even include DOD tuition 

assistance, spousal assistance programs, and things like 

that that really help our community. However, with this 

loophole was open, it also put a target on the backs of 

veterans and service members and their families by 

having these predatory schools really target them for 

just the GI Bill dollars to not be included and so they 

could, you know, recruit other non-GI Bill students, 

which is really a target on the back and victimized many 

members of our community. You know, this rule was put 

into place to ensure that schools are being good 

stewards of taxpayer funds, and we ensure that the money 
35

Committee Meetings - 01/21/22

only goes to schools that pass these market tests. And 

lastly, I'll just say that Congress intended all federal 

funds, including the DOD and GI Bill and VA money, to be 

included. And we're here to ensure that's going to 

happen and thank you, and I'll get back in line for 

some more comments.

MR. ROBERTS: Thanks, Travis. Just to 

clarify the question in chat, we are only, we were 

trying to limit comments only to section, number one of 

that first section, so as much as negotiators can, but 

with that, Jaylon please.

MR. HERBIN: Yes. Thank you, so we are 

very supportive of closing the loophole to protect the 

GI Bill recipients and having to see this draft 

language. However, we are still concerned that opening 

up the new loopholes related to institutional private 

loans, which we are, which included later on in the 

regulation. We also would like to get clarification on 

how the ABT grants for students coming from foster care 

systems will be treated as those that are federal funds 

that are being administered through the throughout the 

states. So if you guys can just touch about on that part 

as well, please.

MR. MARTIN: As far as the grants 

you're referring to, we we're still in the process of 
36

Committee Meetings - 01/21/22

identifying all of the potential sources for federal 

funds to an institution, and beyond that, as I pointed 

out before, 90/10, in order to do a 90/10 calculation it 

is necessary to know what was received at the student 

level by each individual student. Otherwise, you cannot 

calculate 90/10 again. It does. It does aggregate, but

it can't be calculated on aggregate basis up front. So 

you can't just know how, the amount of funding an 

institution received from a source. It must be broken 

down by student and in many cases, and the institution 

has to be informed of that. It would have to know that. 

Certainly the institution would know in any case, where 

they where the agency providing the funds gave them to 

the institution to disperse, but where those funds go to 

the student, the school would not be aware of that 

unless the agency had a mechanism for that. So we have a 

we do have a way to go with our identifications and also 

putting into place protocols through which schools would 

be notified of those amounts. So I can't speak to any 

particular any particular funding source right now. You 

had another part of your question, too. I can't recall 

what that was. I'm sorry. Could you reiterate that or 

restate that, please?

MR. ROBERTS: I think you're muted 

right now, Jaylon, sorry. 
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Committee Meetings - 01/21/22

MR. HERBIN: I'm sorry. Pretty much 

the other part of the question was closing this loophole 

for the GI Bill, which is a great thing, but we're often 

concerned that it is going to open up more loopholes 

for, related to institutional private loans as well.

MR. MARTIN: Yes, we do have we do 

have concerns about obviously that we're, about 

steering, you know, steering students into private 

loans. However, I would point out that it's a program 

violation to, not to allow a student access to all of 

the Title IV aid to which he or she is entitled. So it's 

not appropriate for a school to say to us, to a student, 

you know, we're not going to originate your loan up to 

the level of eligibility for Title IV in order that we 

can steer you into a some type of a private instrument. 

So that would be, I'm not saying that some schools might 

not try to do that, but it would be a program violation 

to the extent that we're aware of it. We would we would 

take action against the institution that did that.

MR. ROBERTS: Thank you. Carney, 

welcome and please, you have three minutes.

MR. KING: Hi, just really quickly, I 

want to add on to Travis's opening statement. I'm 

representing students and student loan borrowers, but 

I'm also a veteran that used the GI Bill. I'm really 
38

Committee Meetings - 01/21/22

supportive of closing any and all loopholes. These 

predatory colleges also really take advantage of 

students that are first generation, a lot of firstgeneration veteran students and other students that 

don't really understand the kind of college recruitment 

process. They think they're being recruited by better 

colleges than they might actually be. So I really just 

want to make sure that we're closing the loophole and 

protecting all students. Thank you.

MR. ROBERTS: Thank you. Brad, please.

MR. ADAMS: And thank you for your 

service, Carney. You know, I did add just real quickly 

in the chat that not all veterans service organizations 

agree with the 90/10 change. There was a veterans 

education project paper that I put in there for the 

Department to take a look at. This is kind of section 

one and section two, so I'll combine it here. The 

Department seems to be proposing that federal assistance 

funds pay directly to students would be counted in the 

90 without regard to whether the funds were actually 

provided to the school to pay for tuition fees and other 

institutional charges, there are basic programs like 

Montgomery GI Bill benefits post-9/11 GI VAH, which 

stands for Basic Allowance for Housing, does not have 

tuition in the word. It provides significant amounts for 
39

Committee Meetings - 01/21/22

housing, cost of living and other expenses that are 

clearly not tuition fees and institutional charges. 

Depending on your zip code that can be up to 1,700 

dollars per month. It would be completely inappropriate 

to include these funds in the calculation. It goes 

against the basic accounting matching principle we all 

learn in college. Given the cash being used in the 

calculation may not be associated, would not be 

associated with the revenue being reported in the 

denominator. All the funds counted in 90/10 must have 

been provided to the school by the student for tuition 

fees and other institutional charges, and the amount 

must be capped at the cash payments actually received 

from the student, not what the student received. Also 

under Title 34 CFR Section 668.28 subsection C paragraph 

three, institutions are required to report to the 

Department within 45 days after their fiscal year if 

they failed the 90/10 rule. The Department isn't 

proposing changing that reporting requirement as part of 

this issue paper. After living through gainful 

employment with the Department, I'm concerned that the 

Department won't have the ability to get institutions' 

data timely, and the VA is typically the last federal 

funds source to clear the ledger [audio]. If the 

Department doesn't get disbursement data from the VA and 
40

Committee Meetings - 01/21/22

share with institutions in real time, how can the 

institutions be expected to comply with this 45-day 

reporting requirement? Does the Department have a master 

service agreement already in place with the Department 

guaranteeing they will get this data in time to get it 

to institutions to complete their 90/10 calculation? 

Remember, the 90/10 has to be audited as well, so we 

would really need that before the end of our fiscal 

year. If institutions did a, get data a month or two 

after disbursement, we could be in a significant 

situation where we can't comply with the 90/10 rule 

until after 45 days of our fiscal year [audio]. Thus, 

effectively precluding us from completing the reporting 

requirement. Is the Department planning to address this? 

Is the Department intent on sharing this disbursement 

data with institutions in real time? How can the 

institution plan for their fiscal year if they're not 

guaranteed to get this data on a real-time basis? This 

will really hamstring our ability to monitor 90/10 

compliance. What's the Department's plan and timing 

expectation on sharing data with institutions?

MR. MARTIN: I definitely hear your 

concerns, that's a lot of questions. I think maybe 20 

years ago, I could remember it all in my head. I've 

tried to address your overriding concern, which is the 
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Committee Meetings - 01/21/22

first of all. I do want to say that the that the amount 

that will that will be counted towards 90/10, that is 

that that is received roughly by students will be capped 

at the amount of cash the student actually pays. So what 

we're basically doing here is presuming the amount of 

cash the student pays to have come from those sources 

[interposing]. Secondly, with- yes.

MR. ADAMS: I'm just, I'm not 

following that. So you're saying that you'll know how 

much money the student paid us out of their 1,700 dollar 

check.

MR. MARTIN: No, we won't know that. 

You will.

MR. ADAMS: And how do we know that it 

came from [audio] and not another job? SorryMR. MARTIN: That is, there is a 

presumption currently in the regulations that if the 

student received, if the student received funding from 

that from that source and was paid and then the student 

paid cash to the institution, the presumption that that 

cash payment came from that source up to the amount of 

that source. 

MR. ADAMS: In the core, the cash 

source is called basic allowance for housing. That's 

considered a presumption for tuition?
42

Committee Meetings - 01/21/22

MR. MARTIN: Under the current, under 

the way, not the current, the way the regulation is 

currently proposed, yes, there'd be no delineation. You 

can, if you're making a suggestion that it be that 

you're making the suggestion that where the where the 

source is identified as being specific to say housing 

allowance, that that would be that would be excluded 

completely?

MR. ADAMS: That would be a good 

starting point. But there's more than that. 

MR. MARTIN: We'll take-. 

MR. ADAMS: How about the 45 days?

MR. MARTIN: Yeah, well, I was just 

going to address that. With respect to the timeliness 

there, we are not changing that. Our intention is to our 

intention is not to require schools to be aware of 

funding sources where they have not been made, where it 

has not been made known to them, what the amount of the 

award received by each student is. And that's why we are 

going to not make a blanket requirement. But rather 

saying that we will identify in the Federal Register 

each year those sources that the school is required to 

be aware of, and we would not do that until we have 

executed some type of arrangement with that entity to 

provide data not just to the Department, but to provide 
43

Committee Meetings - 01/21/22

that to the school. So they'd be aware of that. We are 

aware of the timeliness issues involved with that and 

the fact that it would not be of use to a school if that 

information only came, you know, months after the aid 

was actually dispersed to the student by that entity. 

But I want to give my counsel Steve an opportunity to 

expand on that if he wants to.

MR. FINLEY: Yeah, I don't think that 

needs any expansion right now. You know, input on how 

these items should be treated is welcome and will be 

considered.

MR. ROBERTS: Thank you. Johnson, 

please.

MR. TYLER: Yeah, I have two comments. 

Jaylon is concerned about you know the private student 

loan market entering this area is completely valid. 

Navient just recently settled a case for, I think they, 

the output was a 1.2 billion dollars worth of private 

loans that enabled more money to flow to schools, and 

the value of those loans was so de minimis I think they 

valued at 50 million afterwards. So there's a whole 

there's a whole history of the private loans trying to 

make 90/10 work for profits and having a bad effect on 

borrowers. So that's one statement. And just to address 

Brad's concerns. Now, I have a client who could have 
44

Committee Meetings - 01/21/22

gone to FIT, which is the Fashion Institute in New York, 

which, you know, uses its moniker to imitate MIT. I 

mean, it's really a great place. And instead she went to 

the she went to the Art Institute, and she took out all 

these loans, and she could have taken out all the loans 

and gone to FIT and maybe taken out less loans. I mean, 

the marketplace is designed to attract people in certain 

places. Her degree hasn't really worked out. And the 

idea that, you know, the that we shouldn't be using 

these sort of ideas that people are voting with their 

feet as to where they go to school, and that should have 

an impact on whether you should continue to receive 

funding and their pocketbooks. It just seems a little 

bit of a contradiction.

MR. MARTIN: I want to say just 

quickly that, you know, the Department is fully aware 

that what we're proposing here is not going to address 

every concern about, you know, and the concerns that we 

share, by the way, about increasing you know private 

lending or student students seeking those sources as a 

as a as an alternative to Title IV, I can only reiterate 

that what is here that if an institution because of 

these rules decided to try to steer students who were 

eligible for Title IV funding into other instruments, 

that would be a that would be a violation. I don't know 
45

Committee Meetings - 01/21/22

what the what the Veterans Administration rules are or 

DOD. I would assume there would be a grave consequences 

for a school that purposefully did not enroll veterans 

in order to avoid the consequences of this. So while 

that might happen, I'm certain that would be that would 

be a violation. So I don't think, what I'm trying to say 

is I don't think these rules that we're proposing here, 

while they might not fix all the problems being 

identified, I do not believe they exacerbate them.

MR. ROBERTS: Thanks, Greg. Travis, 

please.

MR. HORR: Thank you. I wanted to make 

sure that I read my colleague Barmak's comments that are 

in the chat for everybody that's watching and can't read 

the chat. Just to point out that the organization that 

was cited earlier is an outlier. We've been endorsed by 

28 veterans, military, and family member related 

organizations. And this has broad support within the 

veteran and military community. And I also wanted to 

touch on that the housing allowance, that it's incorrect 

to state that the housing allowance should be excluded, 

as evidenced by the statutory text inserting federal 

funds, federal funds that are dispersed or delivered to 

or on behalf of a student to be used and to attend such 

institution referred to as paragraph subsection D as 
46

Committee Meetings - 01/21/22

Federal Education Assistance Funds, students are getting 

the housing allowance to be used only if they attend the 

institutions, and the exclusion of the housing allowance 

is not supported by the statute. And then I also would 

like to mention in romanette one that you know we list 

Title IV HEA program funds and I think we've already 

discussed a little bit that the Department is aware of 

you know large sources of other federal funds that 

assist students such as the GI Bill and DOD are coming 

from VA and, VA and DOD, and that it would I think it 

would be helpful to list those explicitly rather than 

have them rely on a list that comes out every year from 

the Department. And just have that explicitly stated and 

these other federal funds that you've identified, which 

I think you've already touched on, and that's it for me. 

Thanks.

MR. MARTIN: Thank you.

MR. ROBERTS: Thank you. Yael, please.

MS. SHAVIT: Thanks, and Travis 

touched on a point that I wanted to make, only I might 

make it a little stronger, which is that I think it's 

cynical to suggest removal of housing assistance that's 

specifically intended to help students get an education. 

And I would urge the Department not to take that 

recommendation. But beyond that, I wanted to just raise 
47

Committee Meetings - 01/21/22

the concern about the notice that the Department is 

proposing making annually and that my fear about that 

notice, though, I see that it could be a useful aid to 

schools, and I'm not opposed to that is that I want it 

to be clear that that doesn't take away the school's 

responsibility to do their own [audio]. And in the event 

that there are changes in the interim and schools are 

aware of different sources of federal funding that might 

become available to students and that students are 

intending to use it is concerning to me the notion that 

a document that might become static or not be updated in 

real-time or not be entirely comprehensive for one 

reason or another may ultimately create a loophole in 

itself.

MR. MARTIN: Thank you.

MR. ROBERTS: Alright. Greg, shall we 

take a quick check on just number one, calculating the 

revenue percentage and then move on to disbursement 

rule?

MR. ADAMS: Do we need to check them 

in on every, temperature check on every item we can, 

but-. 

MR. MARTIN: No, I don't think we need 

to do a temperature check just on that. I just wanted to 

I wanted to open up discussion for that because I wanted 
48

Committee Meetings - 01/21/22

to just, you know, get some discussion going before we 

went too far deep into the text. So I didn't want it to 

be a recitation on my part. I just wanted to get some so 

we can. We'll move on and we can call for a I think 

we'll wait a little bit longer before we before we do a.

MR. ROBERTS: I just love temperature 

checks. Do we want to do, cue Aaron up for disbursement 

rule?

MR. MARTIN: Yes. Yeah, I like 

temperature checks as well. Not trying to disparage 

temperature checks. Great. Thank you, Aaron. So you'll 

see here in two that, I want to point out that cash 

basis of accounting is still the method for calculating 

90/10. That's statutory, that's not been changed by what 

you see lined out there. We have proposed this new 

disbursement rule, and we do say here an institution 

must use the cash basis of accounting and calculating 

its revenue percentage. Always a bit of a problem when, 

you know, I remember my first exposure to 90/10, if 

you've ever had, well, I'm sure if you have had advanced 

accounting courses, they talk about cash basis. But in 

the basic ones you're just always taught, you know, 

you're taught to think about accrual basis accounting. 

So it's kind of hard to, at first kind of hard to 

divorce yourself from that, but we are talking about 
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Committee Meetings - 01/21/22

cash basis here, so for each eligible student counting 

the amount of non-Title IV, I should say, rather 

institution must use the cash basis of accounting in 

calculating its revenue percentage by for each eligible 

student counting the amount of non-Title IV federal 

funds the institution received during its fiscal year, 

directly from an agency identified in (a)(1) romanette 

one of the section, which we said we would do annually 

in the Federal Register, and tuition and fees and other 

institutional charges paid by a student to whom the 

federal agency provided funds. For each student for each 

eligible student counting the amount of Title IV HEA 

program funds received during the fiscal year. However, 

before the end of its fiscal year, the institution must 

request funds under the advanced payment method in 

668.162(b)(2) or the heightened cash monitoring method 

in 668.162(d)(1) that students are eligible to receive 

and make any disbursements to those students by the end 

of the fiscal year or make disbursements to those 

students by the end of the fiscal year, and report as 

federal funds in the revenue calculations the funds that

the students are eligible to receive before requesting 

those funds under the reimbursement or heightened cash 

management methods in 668.162(c) or (d)(2). So we note 

here that for each eligible student, the institution can 
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Committee Meetings - 01/21/22

count, the institution counts the amount of non-Title IV 

federal funds received during the fiscal year, including 

those funds received directly from another agency, as 

well as those that are received from a student and for 

each eligible student, the institution count the total 

Title IV funds received during the fiscal year except 

that those institutions, except that into an institution 

on heightened cash management, must first or in advance 

pay must first must request and disperse Title IV funds 

by the end of the fiscal year because 34, and the reason 

for this is because 34 CFR part 668 imposes no timeframe 

for the requesting of federal funds. Institutions can 

avoid a loss of eligibility under 90/10 by deferring 

drawdowns of Title IV funds from (g)(5) until the 

subsequent fiscal year. And so what we're trying to do 

in this language is close that loophole, and we have 

seen several instances of schools using this, this 

loophole, which is currently does not violate anything 

regulation to avoid the consequences of 90/10. And 

again, it's because of, you know, you have to you have 

to fail 90/10 in two years, each in each of two years, 

which makes this makes this gaming possible by simply, 

remember, we're talking about cash basis of accounting 

here. So you just delay the draw of cash into the next 

year when the counting starts again. So I hope I've 
51

Committee Meetings - 01/21/22

explained that and I will open the floor for discussion 

on this disbursement rule.

MR. ROBERTS: Thank you. Thank you, 

Aaron. Just want to let everyone know that Barmak is 

back on the table on behalf of service members and 

groups representing veterans, but Brad, please take us 

away.

MR. ADAMS: Thank you. And cash basis 

of accounting. That does bring me back, Greg. Alright, 

so I apologize, I missed a, one piece in one that I 

would like to go back to. It's the last sentence in one 

small romanette one where it says the Secretary 

identifies the federal agency and the other educational 

assistance funds [phonetic] provided at the agency in a 

notice published by the Federal Register. You know, I 

think it should be appropriate for schools from a 

planning point of view that they should only be 

responsible for, including in the 90 federal education 

assistance funds that were identified in the Federal 

Register prior to the beginning of the fiscal year. It 

would be, it would be unfair to schools to notify to 

notify them halfway through the year or all the way at 

the end of their fiscal year, and they had not planned 

accordingly that those funds were going to be part of 

the 90. That's first a request, and I can submit a 
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Committee Meetings - 01/21/22

language change for that.

MR. MARTIN: We'll take that back. If 

you want to provide language, you can go ahead and 

submit that.

MR. ADAMS: Thank you. And then on the 

second comment during the 90/10 public comments last 

year, a commenter specifically asked for the Department 

to come prepared to the first session with a full list 

of funding sources that we consider federal education 

assistance funds. Can I ask why we don't have the list 

considering Congress passed this law months ago? And the 

Department has had ample time to compile the list. As 

you know, this is an important rulemaking with a 

potentially huge consensus and not having this list 

impairs us in these decisions. I'd like to have the list 

for the second session, so I know what we need to be 

discussing in terms of what is and is not a federal 

fund.

MR. MARTIN: My response to that would 

be that there are two parts to that list, and I think in 

fairness, in fairness to institutions, it's more than 

simply requiring a list. Remember that we that you still 

have to be, each school would have to be provided with 

data about each individual student's award. And 

certainly you have that if the agency, as with Title IV 
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Committee Meetings - 01/21/22

funds, you draw down funds and you disperse those funds 

for us. So you know exactly what students received. 

That's not the case with all of these benefits. So we 

don't we don't want to just provide a list of entities 

with whom there is no protocol for providing the school 

with a student with student level data. And I 

respectfully disagree with the assertion that we've had 

plenty of time to do that. We have been working on it. 

We continue to work on it and we'll try to provide it at 

the earliest possible convenience.

MR. ADAMS: Thank you. It's just hard 

to negotiate on something when you don't know what's in 

and out.

MR. MARTIN: I understand those 

constraints and as I said before, we're doing our best 

to get that, to get that together and identify all these 

sources and think about what agreements we might we 

might have.

MR. ROBERTS: Thank you, Jaylon, 

please.

MR. HERBIN: Yes, thank you. So I 

want, I want to rewind back, really, Greg, you had 

mentioned that it was when I talked about the 

institutional loans that it was that you guys are 

monitoring that, it's hard to really, you know, 
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Committee Meetings - 01/21/22

determine that, right? But what I wanted to allude to is 

that we think that this is something that can be handled 

right now. It really is our view that the regulations 

could, in fact exacerbate the problem of predatory 

institutional lending. And the problem is a widespread 

that is ongoing, and it's illustrated by yesterday's 

CFPB's announcement related to these types of loans, 

simply excluding annual payments from institutional 

loans that help with this problem. But we do have an 

opportunity to improve the landscape. Now moving forward 

to this section that we're at right now, I see that 

we're using the term fiscal year and I understand that, 

you know, the way the disbursements are allotted 

throughout the timeframe, that may be fairly relative in 

a manner of being able to calculate everything. But what 

I would like to keep in mind here is the student and 

making sure that the student is at the forefront and not 

literally the institution is at the forefront. So in a 

way that is a measure that we can use that will keep 

that student in the forefront of the disbursement.

MR. MARTIN: Well, I mean, the 

reference to a fiscal year is because that's the way 

90/10s calculated. So what we were, what we were 

discussing in the disbursement rule here is a specific 

mechanism used by I don't want to suggest all schools or 
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Committee Meetings - 01/21/22

even a majority of schools, but by some schools that 

that that risk failing, failing 90/10 in a second year. 

They failed it the first year. If they fail the second 

year, that will render them ineligible. So because it's 

done on a cash basis instead of dispersing funds and 

then requesting the funds immediately, they allow that 

fiscal year to elapse so that it's gone, so now they're 

going to draw those funds in the next fiscal year and 

they haven't failed Title IV they haven't failed 

eligibility because now they've passed 90/10 in the 

second year because they didn't include those funds and 

they rolled the request for those funds into the next 

year when the accounting for 90/10 begins again. So to 

that effect, to that effect, I think that this does 

protect students because it closes a gaming loophole 

associated with that. Again, I wasn't and I don't didn't 

mean to suggest in saying that I don't think this rule 

exacerbates the problem with private loans unless 

schools intentionally violate Title IV regulations. But 

but I didn't mean to suggest there's nothing else the 

Department could do about it with respect to private 

loans or that we haven't considered any of those 

avenues, just that that's not on the table here and 

wasn't germane to 90/10.

MR. HERBIN: Thank you.
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Committee Meetings - 01/21/22

MR. ROBERTS: I have Barmak's hand up 

next.

MR. NASSIRIAN: So first of all, I 

want to express very strong support for the Department's 

disbursement rule because we are quite aware of that for 

a long time some institutions have in fact manipulated 

their 90/10 calculation by gaming the timing of 

drawdowns and disbursement. So I think it's a sensible 

change. I wanted to address the question of identifying 

the agency. I don't know. You know, I don't know what 

your success will be in securing agreements with every 

agency. And I certainly understand that that is the that 

is the best practice. And the fairest way to the 

institution is for the agency to directly notify the 

institution that federal funds were provided to one of 

its enrolled students. But I don't want to let the 

school off the hook. If those agreements don't 

materialize, and the school has other ways of 

ascertaining the fact they should not be, they should 

not be allowed to to take a position of sort of studied 

ignorance where I don't know and I don't want to know. 

At the very least they ought to ask people, is, are you 

making this payment for from the receipt of any federal 

program? I think that's a simple enough thing to ask. It 

doesn't mean they're going to get it 100 percent, but I 
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Committee Meetings - 01/21/22

don't want to create a loophole where the agencies don't 

provide the information and the school knowingly cashes 

checks that it could easily find out have, in fact, 

federal sources.

MR. ROBERTS: Thank you.

MR. ROBERTS: Thank you. Okay, Brad.

MR. ADAMS: Thank you, Barmak, but it 

is tough to do your job when you don't know the rules. 

Second romanette, drawdown of funds. We understand that 

the Department does not want schools to defer drawdowns, 

and we agree that that that is inappropriate to do with 

students. But this is really problematic. The Department 

is suggesting that we have time to draw down 

disbursements to make it a fiscal year. But what if my 

fiscal year ends in the last week of the semester? I 

mean, sorry, in the first week of the semester. As you 

know, there are rules in place regarding how and when 

funds can be drawn and dispersed, and [inaudible] 

protocols for ensuring compliance. It's not an easy 

process working [inaudible]to pull funds. So how do we 

know what is timely or intentional? This is an 

operational nightmare in practice. The Department is 

suggesting that all these other requirements and 

protocols would be ignored each year, the schools would 

instead be directed to draw down and disperse right 
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Committee Meetings - 01/21/22

away. I don't understand how I could bring in all the 

federal aid for 6,500 students on a semester that starts 

two days before my fiscal year ends. That's the way I 

read this.

MR. MARTIN: As written here, the rule 

doesn't make any and doesn't account for that, the 

timing you're discussing, I will reiterate again that we 

feel this is a necessary rule to stop very serious

gaming practices that are occurring out there. I do 

understand how that could be difficult for a lot of 

schools. I do note that some schools apparently have 

enough time to figure out how to do this. So and as I 

said, it's a clear attempt at gaming the 90/10 

calculation. If you have a language you want to propose 

as far as putting parameters around disbursements that 

occur at the end of the fiscal year where students 

paying period begins late, then feel free to provide us 

with that.

MR. ADAMS: So Greg, I'm curious. Now 

I've heard the word gaming about four times. Do we have 

documentation or proof that people are gaming? That is, 

I struggle to agree with that term. I would love the o 

Department to provide documentation, I guess I'll 

actually make a request for the Department to provide 

documentation that gaming is occurring in the federal 
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Committee Meetings - 01/21/22

aid system today when they pull down funds.

MR. MARTIN: We have had reviews 

regarding 90/10 where that practice has been identified. 

If I can provide, I don't know the extent to which I'm 

able to offer specific documentation. With respect to 

the program reviews, I know the completed program 

reviews can be requested under FOIA. The extent to which 

I can provide data, I don't know, but I will certainly 

look into providing the table with what we have or what 

we are allowed to release, but I can say unequivocally 

that, yes, we have identified the practice. It very 

clear what does take place and although you might 

disagree with my characterization, characterization of 

it as gaming, I don't know any other way to describe 

what's being addressed in this particular regulation.

MR. ADAMS: I would say it's either 

compliant or not. Gaming is not an appropriate word, in 

my opinion. 

MR. MARTIN: I respectfully disagree, 

but you do have, you know, you have a valid opinion. The 

Department's position is that this is an example of 

gaming.

MR. ROBERTS: Thank you. Barmak, 

please.

MR. NASSIRIAN: I will not name the 
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Committee Meetings - 01/21/22

institutions, Brad, but there are two very large, 

publicly traded institutions, household names. I'm 

sure, we have examples of ways in which they 

intentionally delay the drawdown and disbursement of aid 

to which the students are entitled. Now can I prove 

causality? I don't know that I can prove, I'm not 

solving trig problems here, but it sure looks like, had 

they drawn the funds down in a timelier manner that they 

would have tripped the 90/10 wire. So, I don't know, is 

that gaming, is that manipulation? Is that compliance 

avoidance? I don't know what you want to call it, but 

it's a problem for the vets who end up enrolled at 

places that probably were not ideal venues for them.

MR. ADAMS: Barmak, I'm curious, 

what's your definition of timely?

MR. NASSIRIAN: As long as the 

institution, I am not unsympathetic to your concern, I 

don't know that your reading of the language is really 

fair to the Department because the Department is not 

suggesting that institutions ignore cash management 

rules or ignore the preexisting disbursement rules that 

it has already meticulously documented. I think what the 

Department is attempting to do is to say, look, if the 

student is entitled to the disbursement under existing 

and/or other existing rules and regulations, you should 
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Committee Meetings - 01/21/22

not delay that because that delay could be an attempt at 

circumventing this particular provision.

MR. ROBERTS: Okay. Thank you for that 

discussion. Greg, I'm not seeing any hands up, and I 

wonder if now it might be an appropriate time to call 

for an afternoon break. Do you just want to walk us 

through briefly point number three? And then what we'll 

do is we'll have a 15-minute break and then just come 

back and resume discussion on that. Does that sound 

alright?

MR. MARTIN: That sounds good. I'll do 

that. Thank you.

MR. ROBERTS: Aaron if you wouldn't 

mind bringing up the document.

MR. MARTIN: Thank you, Aaron. We're 

looking at three revenue generated from programs and 

activities. This language will clarify that revenue 

generated from the institution's programs, which is 

included in the 90/10 calculation, includes only those 

that are related directly to services performed by 

students and necessary for the education and training of 

those students. We have proposed to clarify language 

related to revenue from funds paid by students to 

include only ineligible education or training programs 

that do not include any eligible coursework. The 
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Committee Meetings - 01/21/22

language also notes that revenue from those programs 

cannot be included unless it provided it at an approved 

location of the institution that such revenue must not 

be from a program where the institution solely provides 

the facilities for test prep courses, acts as a proctor, 

or oversees a self-study course, and that the program 

must be approved by the state and accredited and lead to 

an industry-recognized credential. So with that, I'll 

walk through the language itself. So in three the 

institution must consider as revenue only those funds it 

generates from tuition fees, other institutional charges 

for students enrolled in eligible programs as defined in 

668.8 or activities conducted by the institution that 

are necessary for the education and training of its 

students, provided those activities are: (A) conducted 

on campus or at a facility under the institution's 

control, (B) performed under the supervision of a member 

of the institution's faculty, (C), required to be 

performed by all students in a specified educational 

program at the institution and here we have the addition 

of (D) related directly to services performed by the 

institution. And finally, three, funds paid, romanette 

three rather, funds paid by the student or on behalf of 

a student by a party unrelated to the institution, its 

owners or affiliates for an education or training 
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Committee Meetings - 01/21/22

program that is not eligible under 668.8 and does not 

include any courses or coursework offered in an 

ineligible program. The non-eligible education program 

or training must be provided by the institution at one 

of its approved locations. The institution may not count 

revenue from a non-negligible education or training 

program where it merely provides facilities for test 

preparation, acts as a proctor, or oversees a course of 

self-study, be approved by a licensed appropriate state 

agency and is accredited by an accreditation agency 

recognized by the accrediting agency recognized by the 

Secretary under 34 CFR part 602 or provides an industryrelated credential or certification. And we've tightened 

up that language somewhat as you can see. And that is 

everything in three, revenue generated from programs and 

activities. So, we'll pick up a discussion there when 

we come back from the break.

MR. ROBERTS: Sounds good. And Jaylon, 

I see your hand up and Brad, I see your comment, so 

we'll pick up with Jaylon and Brad once we come back. 

But it is 2:26, let's say, 2:40. Would that work for the 

committee, 14 minutes?

MR. MARTIN: That sounds good to me.

MR. ROBERTS: Alright. See everyone 

then. Thank you so much. Welcome back, everyone, hope 
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Committee Meetings - 01/21/22

you enjoyed the break, we can jump right back into 

number three. Revenue generated from programs and 

activities. I had Jaylon's hand up first before we went 

on break. So, Jaylon please.

MR. HERBIN: Yes, thank you. So real 

quick question, I see that the Department has made some 

changes to the definition of industry-recognized

credentials or certification. My question is really, can 

we go a little bit more into detail in that definition? 

For one, it also proposed that the regulation include a 

reference to the certification requirement that was 

discussed this morning to replace the requirement and 

ensures credentials are not just recognized by potential 

employers, but accepted by them in practice as well.

MR. MARTIN: Okay. Yeah, I can clarify 

that a little bit for you, so these are again, we're 

talking about starting under romanette three, funds paid 

by a student on behalf of a party loan-related for an 

education program or training program that is not an 

eligible program. This is a statutory provision that 

Congress gave to count revenue that's not an eligible 

program. So, we have no jurisdiction over what an 

eligible, a noneligible program does. So it doesn't 

really relate to what we were talking about earlier. So 

the change that we made here, these are all the 
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Committee Meetings - 01/21/22

stipulations for would be provided by the institution, 

[inaudible] approved locations. And then we went down 

through the other requirements there. And then under 

what is now D, it used to be provide an industryrecognized credential certification or prepare students 

to take an examination and an industry recognized 

credential or certification issued by an independent 

third party. We've proposed to eliminate that, to 

tighten this up so that the only type of program that 

would be one that actually provides a credential because 

we did not feel it was appropriate to include just 

offering training for an examination or offering an 

examination. So that's why we took the action we did 

there with respect to that language.

MR. HERBIN: Alright. Thank you 

[interposing]. 

MR. MARTIN: I hope that clarifies it 

for you.

MR. HERBIN: It does, thank you.

MR. ROBERTS: Okay, thanks, Brad, go 

ahead.

MR. ADAMS: I'm good to let Anne go 

unless you want me to go. I'll go ahead. So on the nonTitle IV program funding, the Department's proposing 

that a school can't count funds from non-Title IV 
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Committee Meetings - 01/21/22

programs if the non-Title program includes any courses 

or coursework offered in an eligible program. This is 

usually problematic. Both schools are going to offer 

non-Title IV programs that have some relationship to 

their Title IV programs they offer because that's what 

they qualified to teach. That's what they have teachers 

employed to teach. So this would effectively preclude 

schools from counting the revenue from all these 

programs. Also, what is the policy justification for 

this restriction? Why, is the school able to generate 

revenue from a non-Title IV program that's unrelated to 

my core programing and the mark of the quality of the 

institution, while generating revenue from a non-Title 

IV program that is related to my core program that may 

be bad? The Department also proposes that revenue from a 

non-Title IV program can only be counted if it's offered 

in an approved location. This is another huge issue as 

well. Lots of schools offer non-Title programs on site 

for employers, other partners at facilities or locations 

of the institution that are not approved by the 

Department. It's worth reminding everyone that 

institutional locations only have to be approved by the 

Department if they offer more than 50 percent of the 

Title IV program. There's nothing wrong or unusual about 

having locations that are not approved, and you would 
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Committee Meetings - 01/21/22

expect that if the primary purpose of a location is to 

facilitate non-Title IV training programs, there is also 

a good policy reason for this restriction. Again. Why am 

I able to generate revenue from a Title IV program 

offered at an approved location and marks a good mark of 

a quality of institution while generating revenue from a 

non-Title program offered across the street at a nonapproved location is bad? Many government agencies send 

their employees for-profit training programs. Finally, 

the Department eliminates several categories of nonTitle IV programs that have been around for many years. 

This space for deletions is completely unclear. For 

example, I would be grateful if the Department could 

explain why revenue generated from a non-Title IV 

program that provides an industry recognized credential 

or certification is good and the mark of a quality 

institution while revenue generated from non-Title IV 

program that provides training needed for students to 

maintain state licensing is now bad.

MR. MARTIN: I will let Steve jump in 

if he wants to here, but first, I'll just say that this 

again reflects our concern about institutions of 

eligible institutions subject to 90/10 entering into 

arrangements whereby the school isn't really, truly 

providing that education or really, it's not really a 
68

Committee Meetings - 01/21/22

true training program, and we feel the need to tighten 

that up. We're not making any assertions about whether a 

program is a good or bad, [inaudible] where is it 

appropriate to [inaudible] revenue? And I'll leave it to 

Steve if he wants to add to that.

MR. FINLEY: I'll just add to that 

that for purposes of the Title IV program, an 

institution is its is the sum of its main location and 

its approved additional locations. And that's why we're 

only going to propose to count revenue from programs 

offered at those locations because that is the 

institution as far as the Title IV programs are 

concerned. It's, it, it's to bring parity with the 

definition of the institution and the sources of the 

revenue.

MR. ADAMS: So then a non-Title IV 

program taught in an approved location is now okay?

MR. FINLEY: Only if it meets the 

other requirements in these regulations for purposes of 

counting the revenue in the 90/10.

MR. ADAMS: We'll submit comments on 

that.

MR. ROBERTS: Thank you. Appreciate 

it. Anne, go ahead.

DR. KRESS: Sure, and so this is just, 
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Committee Meetings - 01/21/22

I think, a straightforward clarification question. So in 

romanette (2)(d), and Greg, when you read this, you even 

read it differently than what's written because it says 

related directly to services performed by students. Is 

that really services performed by students or are you 

talking about by institutions or for students?

MR. MARTIN: No, we're talking about 

related directly to services provided performed by 

students. An example of that would be frequently if I 

could use a cosmetology example. Cosmetology programs 

have clinics in which students work and people can go to 

get, you know, their hair done there, and the students 

and the school can count the revenue from that. That's 

permissible for statute. But we are concerned that that 

revenue only be those services directly related to the 

services performed by the student. In other words, in 

this example I gave, the revenue derived from the 

cosmetology service or haircut or something like that, 

or coloring or whatever is being done, and specifically 

that we do not allow the sale of products to be counted 

as revenue. We have had policy to that effect for some 

time that, but we are now codifying that it must be 

actually a service performed by the instit-, by the 

student and cannot be ancillary. In other words, the 

whole idea here is as this was set up, because obviously 
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Committee Meetings - 01/21/22

and to use my example of cosmetology, it's necessary for 

students to practice that skill to become a licensed 

cosmetologist, that's what we're seeing here, activities 

conducted by the institution necessary for the education 

and training of its students. So an example I gave that 

was just a very easy one where I made a delineation 

between what would be allowable, the revenue for the 

actual haircuts and what would not be allowable, the 

student sells a certain amount of product. That's 

probably a pretty easy one, but I think one that serves 

the purpose here.

DR. KRESS: Okay, thank you.

MR. ROBERTS: Great, thank you. 

Barmak, please.

MR. NASSIRIAN: I just want to say 

that we strongly support the Department's restrictions 

on noneligible programs. Now I want to remind people. 

You know, don't count a gift horse in the mouth is the 

proverb. The purpose of 90/10 was to test the market 

viability of programs being funded with federal dollars. 

The fact that Congress decided in its wisdom to allow 

institutions to count completely unrelated programs they 

may be offering is a gift that you should accept without 

pushing your luck too much. Because it seems to me that 

it's very difficult to argue that those revenues, no 
71

Committee Meetings - 01/21/22

matter what they are, have, provide any indication of 

the mar- it's not a matter of quality, Brad, it's a 

matter of market viability. Is anybody else except the 

federal government willing to reach into their pocket to 

put a dime on the dollar into this program? The fact 

that noneligible programs under any set of restrictions 

count is a freebie. I wouldn't push it too far. I think 

what the Department is doing here is quite reasonable.

MR. ROBERTS: Brad. 

MR. ADAMS: Thank you, thank you, 

Barmak. You know, I'll just give you an easy example 

here just for the committee to think about. So we have 

an accounting program that has a Becker course within 

that program, and we offer that course to someone 

outside of our institution, a non-student already 

teaching the course, I read that as that’s not included. 

Another example, a CPR course is required for nursing 

students. They offer a CPR course to the public. As part 

of that, students can attend. The public portion not 

included. So again, these are not things that are being 

taught by students. Here we have a dental clinic that 

they're taught by students. I get that piece. There are 

other fundamental things that I would disagree with when 

saying completely different from the institution. So 

that's where I think we need better definitions.
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Committee Meetings - 01/21/22

MR. ROBERTS: Okay, thank you. Greg, 

do you want to walk us through section four? I'm not 

seeing any other hands raised. So, application of funds 

if the Department's ready.

MR. MARTIN: Sure. Application of 

funds. You can see here again that we have revised Title 

IV funds to instead read federal funds. So just as an 

overview here, the institution must presume that federal 

funds it disburses or delivers to or on behalf of a 

student will be used to pay tuition fees or 

institutional charges, regardless of whether the 

institution credits the funds to the student's account 

or pays the student or pays the funds directly to the 

student. Except to the extent that the student's 

tuition, fees, or other charges are satisfied by grant 

funds provided by nonfederal agencies, provided that 

those funds do not include federal or institutional 

funds. And we've added, that where this is existing 

language, where it's provided by nonfederal public 

agencies. Just want to make it clear here that that does 

not as long as those funds do not include federal or 

institutional funds and private sources unrelated to the 

institution, its owners, or its affiliates. The changes 

here provide some technical clarification related to 

grant funds provided by nonfederal agencies. Excuse me. 
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Committee Meetings - 01/21/22

Or private entities. Under these revisions, federal 

funds are applied to the student’s tuition fees or 

institutional charges, except where those charges are 

covered by nonfederal public grant dollars that do not 

include federal or institutional funds. Private grants 

from an entity unrelated to the institution under a 

contractual arrangement between the institution and a 

state federal local agency to provide job training. 

Funds from educational savings funds eligible for IRS 

benefits, 529 plans, institutional scholarships that 

meet other requirements. So I'll stop there and 

entertain comments.

MR. ROBERTS: Alright, comments or 

questions for the Department? Yes, Emmanual.

MR. GUILLORY: Actually, I had a 

question for the Department. I didn't see it in this 

issue paper, but has the Department thought about adding 

a definition in section 668.2(a) at the end to define 

federal funds. I know here in this language that would 

be defined in the Federal Register or something like at 

least the agencies that would be held liable under this 

new 90/10 would be in the Federal Register whenever the 

Federal Register would come out. What I was curious is 

if a definition would be applied in regulation. Since 

the statute that this comes from used the term federal 
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Committee Meetings - 01/21/22

education assistance program, I just was curious.

MR. MARTIN: Well, you know, we 

probably could provide a definition, but I think that 

definition would largely just you know mirror what's in 

statute. We at the beginning here talk about federal 

education assistance funds, and I think to offer a 

complete and holistic definition would require listing 

every, source, I'm not sure how we would do it other 

than to say that federal and anything from the federal 

government and federal education assistance, I think 

that that's a pretty broad, that paints with a pretty 

broad brush as it is. The register is simply to inform 

schools of where we have identified those sources going 

directly to students and have developed a protocol for 

schools to be informed of that. So I'm not I mean, if 

you have something you want to propose, I think that we 

would like to keep it broad because it does include all 

federal education assistance funds. And there's no I 

don't perceive a need to narrow that in any way. So I 

would entertain text if someone has it. As it is, I 

would suggest that it's fairly self-explaining the way 

it's written currently.

MR. ROBERTS: Brad, go ahead.

MR. ADAMS: The Department here is an 

application of funds is proposing that any funds 
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Committee Meetings - 01/21/22

received from a nonfederal public agency that includes 

some federal funds should be included. Note the word 

some. That means if federal has a state matching 

component, for example, what if the split was 25 percent 

federal, 75 percent state, all of the state funds 

associated in those dollars would count towards the 90? 

That's just wrong. [Inaudible] program that is run by 

the Department comes to mind. Many states participated 

in this program and are required to use state funds to 

participate to provide scholarships to these students. 

Are the state funds going to be deemed federal education 

benefits for the purposes of this program? I've got a 

second question after you respond. 

MR. MARTIN: We did have discussions 

about this, I don't think that this regulation maybe 

doesn't reflect all of that. It is not our intention to 

call state funds federal funds, but on the other hand, 

we would not allow the inclusion of anything in this 

state grant that included the portion that was federal 

funds. We certainly could consider if there needs to be 

more language here about the extent this institution is 

able to break down what portion of that grant is, 

federal and state. In some cases, it's not possible to 

do that. That information is not provided. We were aware 

of that. Steve, do you have any comments on that?
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Committee Meetings - 01/21/22

MR. FINLEY: Thanks, Greg, I think 

that's an area where we would welcome suggestions, 

including a suggestion that if there was a way to 

allocate the funds between the federal and the 

nonfederal sources that be considered. It's a question 

of whether it's administratively feasible and 

ascertainable.

MR. MARTIN: But certainly, if we went 

in that direction and had language to that effect, it 

would be incumbent upon the institution to be able to 

demonstrate how they performed that calculation and that 

no federal funds were included.

MR. ADAMS: So, second question here. 

The Department of Labor works with states in running a 

Workforce Initiative and Opportunity Act called WIOA. 

The Labor Department works with states to implement this 

program and provide states with funding to help students 

enroll in vocational programs. State manages the 

programs and actually distributes the funds to students, 

not the Department of Labor. Would the Department of 

Labor suggestion of all WIOA funds now be included as 

federal education assistance funds?

MR. MARTIN: We do note that the 

changes related to grant funds provided by nonfederal 

agencies are applied first. Under these revisions, 
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Committee Meetings - 01/21/22

federal funds are applied first, except where those 

charges are covered by nonfederal grant dollars, private 

grants and under contractual agreements between the 

institution and federal local government agencies to 

provide job training for low-income individuals. Those 

are still considered to be, we didn't make any changes 

to funds provided first. Correct, Steve? 

MR. FINLEY: I think that's right.

MR. ADAMS: I just think there's a 

strong argument that WIOA contract funds should not 

apply under paragraph four romanette two which exempts 

funds from federal, state, or local governments to 

provide job training to low-income individuals in need 

of that training. That's exactly what WIOA does when the 

state contracts with an institution to provide that 

training. I'd like the Department to consider 

specifically naming these funds as exempt under 

romanette two.

MR. MARTIN: We will take that. We 

will take that back.

MR. FINLEY: Thanks, Brad.

MR. ROBERTS: Thank you. Johnson, 

please.

MR. TYLER: Yeah, I just want to go to 

paragraph four, romanette one, I just applaud the 
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Committee Meetings - 01/21/22

Department for including this language so that the 

educational institution can't essentially make up that 

private contribution by either through a foundation or 

some other mechanism that makes it looks like the 

private market is actually motivating people to go to 

the school. So I think this is great language here. 

Thank you.

MR. MARTIN: Thank you.

MR. ROBERTS: Barmak.

MR. NASSIRIAN: I want to support 

Brad's point about co-mingling of some federal dollars, 

essentially turning the entire pot of money into federal 

money. You could address that in four romanette (1((a) 

simply at least to address this issue, you could cover 

that by saying the nonfederal portion of you know, 

grants provided by nonfederal public agencies. Now, 

whether how it can be ascertained is a different 

pragmatic issue, but at the very least, let's clarify 

very explicitly that where there is federal money 

involved in a state grant or scholarship program, the 

state portion certainly should not count as federal 

funding.

MR. MARTIN: Point taken, we're 

definitely going to take back those points and consider 

them in future language.
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Committee Meetings - 01/21/22

MR. ROBERTS: And Dave, I see your 

hand, and I just want to note that Ashley is joining us 

on behalf of minorities serving institutions. So 

welcome, Ashley. Dave, please take away.

MR. MCCLINTOCK: Yeah, thanks, Brady. 

I think this ties to Barmak's comments and some others 

that people made. Just as an auditor, the need to 

clarify some of these regulations, they're not 

specifically identifying types of funds, and we're 

talking about non-cash basis revenue in order to audit 

and attest to the accuracy of a calculation. We would 

need a lot more specific guidance on when do funds 

become eligible if they haven't been drawn down as 

written, I don't think it would be possible to perform 

that task.

MR. MARTIN: Dave, you know, I think 

in your role as advisor, if you have suggested you think 

might accomplish that goal or to help implement the reg, 

we'd be amenable to receiving.

MR. MCCLINTOCK: I would be happy to 

work with you on that.

MR. ROBERTS: Great. Barmak.

MR. NASSIRIAN: I have a question for 

Dave. Wouldn't that be a matter of a compliance audit 

before you're doing a financial audit? In other words, 
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Committee Meetings - 01/21/22

wouldn't you test to make sure the institution is in 

fact complying with the requirement that it drawdown and 

disburse funds in a timely fashion? If it does, it 

becomes auditable. If it doesn't, that's a compliance 

issue.

MR. MCCLINTOCK: I guess partially, 

but I'm not sure it's written clearly enough to 

determine whether or not it was done timely, and I would 

say I'm not saying it doesn't happen. I have not seen 

the timing and some of the terms with schools that we've 

worked with, that doesn't mean that it doesn't happen, 

you know, processing financial aid, verifications, and 

lots of changes. There's timing difference of when funds 

are drawn down in order to determine if it was done 

timely. I don't know. I guess accounts are too black and 

white. I need to know specifically, okay, what are the 

criteria that make it qualify as it should have been 

drawn down more clearly.

MR. NASSIRIAN: Can I just follow up, 

this is an important point, I'm not an auditor, don't 

know anything about this stuff, but my assumption is 

that you don't have to test every transaction. My 

assumption is you would test those transactions that 

that sort of sit proximate to the end of a fiscal year. 

My assumption is that to whatever extent you're 
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Committee Meetings - 01/21/22

attempting to catch gaming, you would do so during time 

periods when it could make a difference to this 

particular calculation. Right? I mean, a delay in 

drawing down funds from January, if you're doing a 

calendar year audit wouldn't make a difference. But if 

you're looking at November December, that could make a 

difference.

MR. MCCLINTOCK: It could, I guess the 

eligibility is determined on a student-by-student basis, 

and there are oftentimes drawdowns, including large 

rosters of students and depending on the delivery method 

of educational programs, not every student on a roster 

might be following the same thing. It's based on when 

they become eligible for the drawdown, so it would still 

take digging into a roster of drawdown and then looking 

at individual students applying whatever the guidance is 

to determine when was this student eligible to be drawn 

down. I would just specify, I think you're using the 

term loosely, I get it just compliance audits. To me, 

the compliance is often a Title IV reviewing the 

financial aid processing in 90/10 is actually part of 

the financial statement, audit, and process, but the 

purpose is the same. 

MR. ROBERTS: Greg, go ahead.

MR. MARTIN: Yeah, I don't want to 
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Committee Meetings - 01/21/22

make light of the discussion here. I find it very 

interesting and as a 90/10 warrior from way back, I do 

enjoy the discourse. And I think we've made the points 

here in the interest of getting through 90/10. We're now 

at six minutes after three. We have a hard stop for 

public comments. So as I said before, the Department is 

willing to take any comments related to this suggestion 

as to how we can do it, better. And I think at this 

point, we're going to need to move on to five if that's 

okay. Alright. So we are at five, revenue generated from 

institutional aid, and we made a slight change there. 

The institution may include the following institutional 

aid as a revenue. For loans made to a student and 

credited in full to the students account at the 

institution, just reiterating what these are bonafide, 

as evidenced by standard loan repayment agreements 

issued at intervals related to the student institution's 

enrollment periods, subject to regular loan repayments 

and collections by the institution and are separate from 

enrollment contracts. So this remains the same. We have 

eliminated language that is no longer relevant to loans 

made on or after July 1, 2008, but before July 1, 2012. 

So that was no longer relevant, so it has been removed. 

If we move down again, we've removed irrelevant language 

related to loans between specific periods which have now 
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Committee Meetings - 01/21/22

elapsed. And so let's move down to romanette, I believe 

that's four, no romanette two, for scholarships provided 

by the institution in the form of monetary aid, the 

amount disbursed to students during the fiscal year. The 

scholarship must be disbursed from an established 

restricted account and may be included as revenue only 

to the extent that the funds in that account represent 

designated funds from an outside source that is 

unrelated to the institution, its owners, or affiliate 

or income earned on those funds. So what we are doing 

here is proposing to eliminate tuition discounts from 

the types of scholarships provided by the institution 

because tuition discounts are not generally associated 

with a cash transaction. And stop there and entertain 

the comments on five before we move on to six.

MR. HERBIN: Any questions or comments 

for the Department? Jaylon. 

MR. HERBIN: Okay, thank you. So, yes, 

certainly. This goes back to our topic earlier on, that 

we were discussing. Greg, I'm worried about closing the 

GI Bill loophole by leaving room for the counting of 

institutional loan revenue on the 10 side will simply 

create a new loophole related to privacy loans. And 

excuse me. This goes to numerate I number one, excuse 

me, underneath the section. And then also, the draft 
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Committee Meetings - 01/21/22

language is an improvement on current regulations. But 

the loan repayments do not reflect a willingness on the 

part of students to pay cash for a portion of their 

program, especially because schools sometimes use 

aggressive debt collection tactics such as transfer 

withholding. As I mentioned earlier yesterday, the CFPB 

announced that the new work they were doing to crack

down on these types of unscrupulous institutional 

lending practices. We believe that this will encourage 

predatory schools to push students into private loans 

and then strong arm them into repayment using aggressive 

debt collection tactics. Additionally, we would like to 

see language excluding not only annual payments from 

institutional loans, but also from loans issued by 

owners and/or affiliates, similar to the language we see 

elsewhere in the proposed regulations.

MR. MARTIN: Okay, we'll take that 

back, I think, you know, when we look at institutional 

loans, first of all, the Department's very concerned 

about a misuse of institutional loans, private loans,

and private loans in general. I do want to say that we 

do not think that all institution loans are bad. They 

are sometimes a necessary means of funding. This table 

we're only concerned with 90/10. Not the regulation of 

institutional loans, we're talking about what portion of 
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Committee Meetings - 01/21/22

those institutions can count towards it's not nonfederal 

revenue, and we currently restrict it to only the amount 

repaid on those loans. So there is already a fairly 

strict reporting set up there. As far as like those 

loans not indicating a student's willingness to pay for 

their education, I could see that point of view. 

However, you would have to make the same argument with 

respect to Title IV loans, that you know that too would 

be indicative of a student's unwillingness to pay for 

the education. 90/10 isn't about a student's willingness 

to pay for the entire education in cash. It's about our 

people willing to pay for some portion of it. So I think 

what we have indicates that, but we'll certainly take 

those concerns under consideration.

MR. HERBIN: I think that's really all 

we ask is that you can really just go back and look at 

this and look it from that perspective as well, because 

in that way we are, as I've been [inaudible] putting the 

student at the forefront of this [inaudible] as our 

focal point. But also, we want to make sure that we're 

not opening up another can of worms by opening up more 

loopholes that will ultimately add more terrible, 

predatory lending practices that we like to call it.

MR. MARTIN: Thank you.

MR. ROBERTS: Thank you. I did, 
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Committee Meetings - 01/21/22

Carney, I saw your hand up, but do you still want to 

speak or has your question been answered? 

MR. KING: No, it was addressed. Thank 

you.

MR. ROBERTS: Sounds good. Not seeing 

anything additional on five, revenue generated from 

institutional aid, do you want to go over the deletion 

of six or do you want to jump into number six, the funds 

excluded from revenues?

MR. MARTIN: There's not much to say 

about six, because again, it's deleted because we no 

longer have to worry about [inaudible] with respect to 

loans that were under the FFEL loan program on or after 

July 1, 2008, but before 2000 July 1, 2011, that's faded 

well into the past, so we're not too concerned with 

that.

MR. ROBERTS: Gotcha. Do you want to 

jump right to the new number six?

MR. MARTIN: How about we jump right 

to six if it's okay? So six is funds excluded from 

revenues? And let's take a look at that for the fiscal 

year. The institution does not include the amount of 

federal work study wages paid directly to the students. 

However, if the institution credits the student's 

account with FWS funds, those funds are included in 
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Committee Meetings - 01/21/22

revenue. That is not a change. The amount of funds 

received by the institution from a state under the LEAP, 

SLEAP, or GAP. Again, that hasn't changed. The amount of 

institutional funds used to match Title IV HEA program 

funds. And again, here we have the amount of Title IV 

HEA funds related to, refunded to students, or returned 

to the Secretary. And we don't have to worry about it 

ECASLA again, because that timeframe is no longer 

relevant. The amount the student is charged for books, 

supplies, equipment unless the institution includes that 

amount of books as tuition, fees or other institutional 

charges, or any amount from the proceeds of the 

factoring, or sale of accounts receivable or 

institutional loans, regardless of whether the loans 

were sold without recourse. So we are. This is an 

addition here under romanette six, you proposed to 

clarify that an institution may not include funds 

received from the factoring or sale of accounts 

receivable or institutional loans. Revenue that results 

from the sale of receivables is not derived from tuition 

fees or other institutional charges for students 

enrolled in programs eligible for federal education 

assistance and does not indicate a willingness on the 

part of students to pay cash for a portion of their 

program, as is the intent of, which is the intent of 
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Committee Meetings - 01/21/22

90/10. And so that ends A. So I'll stop there and open 

the floor for comment.

MR. ROBERTS: Thank you, Greg and 

Aaron. Barmak, you are first.

MR. NASSIRIAN: So two questions, one 

of them has to do with the new six romanette two, the 

reason you are only citing matching funds for Title IV 

is because you already exclude all tuition discounts in 

any matching arrangements. Am I right about that? In 

other words, tuition discounts are not real cash flow, 

so they don't count under any circumstances.

MR. MARTIN: Correct, but this is not. 

Remember, this is not the funds, the amount of 

institutional funds used to match Title IV HEA program 

funds, this is just saying that it cannot be that those 

are funds excluded from revenues. And that's not new. 

That's existing. It's always been the case.

MR. NASSIRIAN: No, I'm curious about, 

the reason I'm asking the question. The only ones that I 

can think of right off the top of my head are the 

campus-based work study matching funds, for example. 

That's real money. You're excluding that. But I just 

want to make sure, for example, Yellow Ribbon Program, 

where the institution does derive additional revenue 

from the VA in exchange for a matching discount. The 
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Committee Meetings - 01/21/22

discount doesn't count as part of the 10 percent because 

tuition discounts are not cash flows. Am I correct about 

that?

MR. MARTIN: Yes, we're not counting 

it. We're not.. We propose not to count any discount.

MR. NASSIRIAN: Okay, perfect.

MR. MARTIN: Okay, then you're right. 

The only matches I can think of, Barmak, currently are 

the campus-based matches, which would normally be, well, 

could be cash.

MR. NASSIRIAN: Got it. Second 

question having to do with romanette six, this has been 

looming in the back of my mind and I just don't know the 

answer, so I'm asking. What do you do with private label 

third party loans when there is an origination or 

business arrangement or credit enhancement involving the 

school? Do you treat those as institutional loans? 

MR. MARTIN: We, well, if it's by a 

related party, I'll get Steve to weigh in on this. That 

would be kind of the same as institutional loans if it's 

from an entity where there is a recourse associated with 

the loan, such that if the student doesn't pay back the 

loan, the institution has to pay recourse to the lender 

or wherever that lender is. Then we require that though 

the institution may count as revenue, of the loan, it 
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Committee Meetings - 01/21/22

must also subtract as revenue any amount that's paid as 

a matter of recourse, and I'll turn it over to Steve if 

he wants to elaborate.

MR. FINLEY: Yeah, I don't have 

anything to add to that.

MR. NASSIRIAN: That's a real problem 

because remember, the revenues could be booked in a 

given fiscal year, with the recourse coming due years 

later. ITT comes to mind, you know, it seems to me that 

you somewhere in this regulation, you absolutely need to 

clarify that that third party loans made by another 

entity with which the institution has either an 

origination or a business relationship or any kind of a 

recourse or credit enhancement arrangement will be 

treated as institutional loans because otherwise you 

kind of undo the whole cash basis analysis. You know, 

the lump sum of money seems to come in, but it's a ghost 

transaction because two years out, the lump sum of money 

would go out.

MR. ROBERTS: Thank you, Barmak, I 

just want to note, so Johnson and Jaylon, I see your 

hands, but Brad, in the chat, did say he would address 

Barmak's question. So if you're alright, is it okay if 

we jump to Brad? Okay, yeah, Brad, go ahead.

MR. ADAMS: I've got a longer-winded 
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Committee Meetings - 01/21/22

answer that I'll address this question in, so I'll just 

wait my turn.

MR. ROBERTS: Sounds good. Alright. 

Johnson, go ahead.

MR. TYLER: Thanks. You know, I just 

wanted to support the romanette six. I represented 

clients who've been sued on institutional debt, who's 

been sold to debt buyers. It's very attractive. I mean, 

it's just prospecting, basically. There's no guarantee 

of return. It doesn't have a lot of street value, but it 

definitely happens. And so to count those revenues, it 

just seems speculation. So, I appreciate that.

MR. ROBERTS: Thank you, Jaylon, go 

ahead.

MR. HERBIN: Yeah, just want to sort 

of go back to what Barmak was speaking on. I think we 

are happy to see that the sale of receivables, such as 

institutional loans, will not count as revenue. But it 

is important to reiterate, however, that this provision 

effectiveness is negated by allowing schools to count 

institutional loans as revenue. Additionally, the term 

institutional loans should be clarified to also include 

owners and affiliates as well.

MR. MARTIN: Thank you. I do want to 

clarify, and maybe everybody already knows that with 
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Committee Meetings - 01/21/22

institutional loans, we can only count the amount that's 

repaid on those loans. So, if an institution is giving 

students loans, it never, they have to be true loan 

instruments, you know, with expectation of repayment and 

promissory note. And so if it's only the extent to which 

they repay which forces them to be true loans, but 

you're suggesting that we disallow revenue from any 

institutional loans? Okay.

MR. HERBIN: Yeah. Correct. So I think 

what we really would like to do is that and just specify 

that language a little bit, adding in the owners or 

affiliates to [inaudible].

MR. MARTIN: Okay, thank you. We'll 

take that back.

MR. ROBERTS: Thank you, Brad, go 

ahead.

MR. ADAMS: Okay, this may be my 

favorite discussion point on 90/10, my last [inaudible] 

comment and it is around number six here, wish I had a 

whiteboard. I can teach my accounting class virtually 

here. So how does an account receivable or an 

institutional loan end up on the balance sheet? Very 

simple. Debit accounts receivable or loan receivable. 

Credit tuition free revenue. How can the Department 

propose that this fund source be excluded when the cash 
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Committee Meetings - 01/21/22

is directly associated with the tuition revenue? So how 

can you count the revenue in the denominator but exclude 

the cash from the AR in the numerator? This goes against 

a basic, clear accounting [inaudible]. Also, the AR and 

institutional loans are clearly not a federal source. 

Why are institutional loans that pay during the year any 

different? Cash is cash. Let me give a little insight to 

this committee because I'm not sure people understand 

why an institution might want to sell an institutional 

loan. It may not be why you think. It may not be to hit 

the 10. That's not what I've seen. As part of basic 

accounting, when a receivable or loan is put on the 

books, a corresponding reserve for bad debts may not 

realize this, but that bad debt expense is not a tax 

eligible expense until it's realized. That means the 

loan has to come off the books to be used against your 

taxes. Loans with recourse do not come off your books do 

not count as a tax eligible expense. That is an 

important difference. But loans that are sold without 

recourse are. Many proprietary schools sell AR and loans 

in order to offset their federal tax exposure, which is 

a completely legal thing to do with, via the IRS. The 

Department asking all schools to now pay more in taxes 

than they normally would have by excluding this 

provision. Maybe we need to loop in the IRS and ask them 
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Committee Meetings - 01/21/22

that question. I firmly believe that institutions should 

focus on what they do best, which is providing a quality 

education to students. Servicing of loans is better left 

off the businesses that do that for a living. Thank you.

MR. MARTIN: Well, I would respond 

that. First of all, you know, going back to the spirit 

of 90/10 is that there's a willingness on the part of 

students to pay at least some cash for a portion of 

their program, not the entirety of the program, but some 

cash for that. With, you know, the difference between 

the loan, the institutional loan and the sale of the 

receivable is a direct relationship between the loan and 

the student paying tuition and fees in as much as the 

student borrows the loan to pay for expenses at the 

institution. That's certainly the way it works with 

Title IV loans and with other types of loans. The sale 

of a receivable is a secondary source of revenue that is 

just. You know, and I'm not saying that there might have 

not, we're not suggesting that it might not be 

legitimate reasons why a school might want to sell 

receivables, but in many cases, these receivables 

represent bad debt that the institution has very little 

hope of ever recovering as real revenues, so they'll 

wound up selling it for minimal amounts on the dollar 

and in some cases, just to and I will agree with you 
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Committee Meetings - 01/21/22

that not in every case this is done to gain 90/10 or to 

cover 90/10. But I wouldn't call it gaming because 

currently it's allowable. But we certainly see the 

practice. And what we were trying to get at here is that 

that 10 percent indicates or relates to a willingness on 

the part of students to pay for a portion of their 

education. I don't know if Steve has anything to add, 

but I'll give him an opportunity.

MR. FINLEY: I don't have anything to 

add, I mean, the point is when the accounts receivable 

is sold and it's not just institutional loans, it's 

accounts receivable as well. The person purchasing those 

to try to make collections on them is not paying the

institution for the classes that were provided for that 

for those dollars. And that's why it doesn't, we would 

not count for 90/10 under this proposal.

MR. ADAMS: Steve, may I respond? So 

my question is then why is the revenue counting? The 

receivable was put on the books because there was an 

associated revenue, so you're going to count the 

revenue- [interposing]

MR. FINLEY: Sorry. As long as the 

institution is collecting those payments from the people 

that took those classes from the students, it does 

count. It doesn't count as soon as those things are sold 
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Committee Meetings - 01/21/22

to an outside party because that outside party is not 

paying for the education.

MR. ADAMS: So, Steve, I want to say 

this is a proposed change, so again, that is the way it 

works today. But there's two things that Greg said I 

want to comment on. He said number one, that the 

receivable when sold was not tied to the revenue. That 

is not accurate. Number two, he said, they get minimal 

dollars returned on the receivables. That's not true in 

all instances. And so I'm not sure what data you have on 

that, but that's not an accurate statement, but I'll 

move on this. But revenue and cash, if you're going to 

count it on one side, you've got to count it on the 

other. Thank you.

MR. ROBERTS: Thank you. Sam, go 

ahead.

MS. VEEDER: Hi, this is more of a 

question, and I'm wondering if the Department has put 

any thought into how students will be assisted if 

schools lose eligibility in 90/10. How do we how would 

the Department step in and protect students in that 

case? And should we be adding something here to address 

that?

MR. MARTIN: If a school closed, if a 

school ceased to offer instruction as a result and 
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Committee Meetings - 01/21/22

became ineligible as a result of two years of failure in 

90/10, students would be eligible for the same benefits 

that they would get in any case, where an institution 

would lose eligibility. I understand the point. You 

know, I think it's always a very difficult situation 

because you know, what we're involved in here is any 

time that a regulatory requirement or, you know,

automatically results in that, such as what would happen 

here with failure of 90/10 or where the Department takes 

action against the school. It does, unfortunately, you 

know, put students in a situation where, you know, the 

school that they're going to is no longer offering 

instruction. We don't have anything specific to students 

where an institution loses eligibility for 90/10 due to 

90/10. I will say that it has happened fairly 

infrequently over the past, at least since 90/10 went 

to, since 85/15 became 90/10. There have been very few 

instances I don't know the exact number and maybe Steve 

does, but so far, under the existing rules, there have 

not been a lot of institutions actually lose eligibility 

as a result of 90/10, so there's not much precedent for 

it.

MR. ROBERTS: Okay, thank you. Barmak.

MR. NASSIRIAN: I want to support the 

inclusion of this language and respond to Brad a little 
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Committee Meetings - 01/21/22

bit, Brad, the problem with this notion of including 

sale of receivables is that the institution would then 

be double dipping under the rules. You can't have the 

net present value of the receivable booked as revenue at 

the same time as you get to count all the cash receipts 

from previous cohorts of borrowers that you may be 

collecting on. So, you know, if we're going to go to a 

cash basis of accounting, you're going to have to limit 

the extent to which institution institutions can receive 

lump sum net present value receipts for future 

receivables that should be booked because they're all 

commingled now together cohort after cohort. You know, I 

understand the unfairness. You know, an alternative 

would be to allow the sale of receivables and then 

exclude previous cohorts. But you can't have both. You 

can't count all the previous payments and the net 

present value of the of the loans you happen to sell in 

a lump sum transaction.

MR. ROBERTS: Thank you, Barmak. 

Johnson, I see your hand, I just want to welcome Kelli 

back to the table on behalf of private nonprofit 

institutions, but Johnson go ahead.

MR. TYLER: I'll try to make this 

quick, but I've seen it with my clients. The 90/10 is 

premised on the idea that people are putting their own 
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money, their own skin into the game. When you stop 

making your payments on your promissory note, it's 

usually because you don't feel like there was any value 

in what you got, and you feel like you're ripped off. 

And that's why those payments, when they continue to 

show that people really do think they're getting 

something of value and they keep doing it. So when it 

just turns into a debt, it can't be collected and sold 

on the market. I don't think that reflects what the 

purpose of the 90/10 is, to try to measure people 

putting skin in the game.

MR. ROBERTS: Brad, I see your hand 

and your comment, but is it okay if Dave weighs in very 

briefly? Okay? Yeah, Dave, go ahead.

MR. MCCLINTOCK: And Greg or Steve, I 

might need your assistance just to clarify, I think 

something to what Barmak said. So there was a period of 

time when schools could use a net present value of loans 

and count that present value for their 90/10 

calculation. But I think that was ended five or six 

years ago, I think. I just want to make sure that I'm 

understanding it correctly, so it's stricken from the 

issue paper, but that's because it's so long ago that 

nobody has those. Those loans aren't left. Is that

correct?
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MR. FINLEY: Yeah, that's correct, 

Dave.

MR. MCCLINTOCK: Okay.

MR. ROBERTS: Brad, still feel free to 

comment, if you like.

MR. ADAMS: It'd be great. Before I 

do, since this would be my last comment, I just want to 

thank the Department for the job they did this week. I 

think it's done an amazing job and keeping us on track 

to get through all these issues, possibly early, I think 

is an amazing task. So thank you all. And just to 

address Barmak's question or comment. If you wait 10 

years on your portfolio and sell it all at once, I 

understand your point there, sir. But if you are 

dissolving your loan and receivable portfolio annually, 

it actually matches better to the revenues booked in 

that year from a matching principal perspective. I think 

you can see both sides of that where if you're doing it 

frequently, it actually works well in terms of the cash 

matching the revenue.

MR. ROBERTS: Alright. Greg, I'm not 

seeing any of our hands. Is there anything else the 

committee would like to add on section six. Otherwise, 

Greg, I'll have you tee up what you'd like the 

temperature check, oh Barmak, sorry, I see your hand. I 
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spoke way too soon.

MR. NASSIRIAN: I just want to remind 

the Department that they really need to add language on 

third-party private label loans here without it. All of 

this is meaningless because you're essentially creating 

another mechanism for potential gaming.

MR. MARTIN: I'm sorry, Barmak, you 

said third-party related loans? 

MR. NASSIRIAN: Yeah, third-party 

private label loans where there is an origination 

business relationship or other form of credit 

enhancement arrangements with the institution. Those 

are, somewhere you ought to declare that those will be 

treated the same way as institutional loans. You know, 

my unemployed Cousin Vinny may be available to make 

loans, right? I mean, you know, andMR. MARTIN: If he is, I might need 

some money. I mean, he's not going to strong arm me too 

much when I don't pay.

MR. ROBERTS: [Audio] temperature 

check [inaudible] how they'd like to break down. There 

was a comment a bit earlier about how folks might want 

to break this up, but I'll defer to the Department on 

what's most helpful.

MR. MARTIN: Well, we had a lot in 
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section, we just covered all of A which is pretty much 

what we covered so far. We did break the discussion up 

into various subparagraphs because there was a lot there 

so we can take a temperature check on all we've covered 

through A because B is reserved. So we're going to do 

that, and C is sanctions and won't take long. But before 

we do that, let me just go. We as well just do it all 

holistically because as one in one group, because all we 

have left are sanctions and there's not much there. So 

just let me cover sanctions briefly and then we'll go 

for a temperature check, and we can do it on the 

entirety paper of what's in 668.28. Sanctions is in C,

and we have not changed much here. You can see if an 

institution does not derive at least 10 percent of its 

revenue from sources other than federal funds. So we've 

recognizing the statutory change. I'm not going to read 

all the language there because it has not changed. We 

added, four under C, which says it is liable for any 

Title IV program funds it disperses after the fiscal 

year it becomes ineligible to participate in the Title 

IV HEA program under (c)(1) of this section and 

excluding any funds, the institution was eligible to 

disburse under 668.26. 668.26 is the regulation that 

apply to an institution's participation in the Title IV 

programs rather. So this is just codifying current 
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Committee Meetings - 01/21/22

practice and clarifying it in the regulations, so if we 

need to discuss that point, we can certainly do that. 

But other than that, I would move for a temperature 

check.

MR. ROBERTS: I do see at least one 

hand, Greg. 

MR. MARTIN: Do we have, let's see, 

3:37. I think we have time to entertain them.

MR. ROBERTS: Yeah, we do have a 

little bit of time, but Carney, please take us away.

MR. KING: Yeah, I just want 

clarification about the two consecutive fiscal years I 

know we addressed fiscal years earlier, but I'm 

concerned that like, I don't know when it kicks in that 

they're not deriving at least 10 percent because my 

concern would be if the semester, you know, fall 

semester kicks off the school year in mid-October, is 

that not a full consecutive year then? So they might 

basically have a third additional year to be out of 

compliance before they start seeing sanctions?

MR. MARTIN: No, it's driven by fiscal 

year because it's the 90/10 and I'm going to ask Dave to 

step in and correct me if I'm not getting this right. 

But the auditor puts it as a footnote to the financial 

statements if the institution has failed 90/10, but the 
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institution is required to notify us within 45 days 

irrespective of that. But the audits and it's all key to 

the institution's fiscal year here. So in other words, 

to answer your question, it's by fiscal year, not when 

semesters occur, or terms occur. So no, there'd be no 

way to extend it to an additional fiscal year. But I'll 

ask Dave to comment about exactly what the auditors do 

with respect to a 90/10 termination.

MR. MCCLINTOCK: Well, unfortunately, 

I can't talk about that because I've worked with a 

school that had a 90/10 termination, but just two, it is 

limited to a two-year period, so most companies have a 

12/31 fiscal year. And so I think as written, it talks 

about beginning January 1, 2023. So it would be two 

years at the end of that two-year period, it doesn't. It 

would be regardless of terms that were in process or 

anything else at the end of that fiscal year that would 

end the two-year period. Does that make sense, Carney?

MR. KING: You're saying 24 

consecutive months of not deriving 90 percent and 

they're looking at sanctions or do they have to wait 

until the following like fiscal year ends?

MR. MCCLINTOCK: The, I can answer 

this or you can, Greg. [Interposing] we measure it 

annually. So after the first year, you would be 
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evaluated if you get more than 10 percent or not. If the 

answer is no, then as currently written, you would start 

the second year and at the end of that second year, you 

also did not derive at least 10 percent-. 

MR. KING: Okay.

MR. MCCLINTOCK: At that point, you 

would, you would fail.

MR. MARTIN: Yeah, that's absolutely 

correct. It's to two distinct fiscal years. So when you 

don't, you don't view the period as 24 months, view it 

as one fiscal year. There's either a pass or fail, 

second fiscal year pass or fail. So two failures would 

mean a loss of eligibility.

MR. KING: Okay, thank you.

MR. MCCLINTOCK: Sure.

MR. KING: Also, I just was curious 

the Secretary has to be notified if they don't meet the 

fiscal year. But are there requirements to notify the 

students that are affected specifically people using a 

GI Bill or anything like that?

MR. MARTIN: I don't know that we have 

specific requirements related to 90/10, but I see Steve 

has his hand up, so I'll defer to Steve.

MR. FINLEY: Well, so when you fail, 

when an institution fails 90/10 for two consecutive 
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years, it loses eligibility with the very next day, 

right? So there are procedures in place where 

accrediting agencies and states and students are all 

notified about institutions that lose eligibility. So 

that happens separate from the 90/10 issue. It's 

actually triggered by the loss of institutional 

eligibility.

MR. ROBERTS: I mean, I would like to 

see like a maybe after the first year requiring that 

they let students know that, you know, they're in danger 

at least of losing funds so they can plan ahead.

MR. MARTIN: Thank you. We'll take 

that back.

MR. ROBERTS: Thank you. With that, 

Greg, is the Department ready for a temperature check on 

the entirety of issue paper seven on the 90/10 rule?

MR. MARTIN: I think so.

MR. ROBERTS: Alright, so ending the 

hour Friday the right way with a temperature check, 

everyone could just hold their thumbs middle of their 

screen, nice and clearly. Alright. Seeing one thumb 

down. Brad, more than welcome to come off of mute if you 

want to add anything else to the Department's 

consideration into week two.

MR. ADAMS: TGIF. Good job. 
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MR. ROBERTS: Yeah. Alright, thank 

you, guys, so much for all your hard work today. With 

that, Greg, I know that we're about 20 minutes out from 

public comment. So if folks have a sign in link for 

that, I would welcome them to sign on a little bit early 

just so we can get set up for that period of our 

afternoon. But Greg, is there anything that the 

Department would like to close out week one with?

MR. MARTIN: Yes, I'll think I'll read 

some of my personal poetry, no, I will not do that, but 

I would, just want to say to everybody that it's been a 

pleasure working with you this week. I'm really 

impressed with the level of professionalism and the 

knowledge evidenced by everybody on this on this panel. 

It's been my privilege to serve as the federal 

negotiator, and I look forward to working with all of 

you in the upcoming two weeks. I do look forward to 

taking a break from it for a couple of days, but over 

the weekend, but certainly look forward to coming back 

and working with all of you as we as we move forward to 

try to get the best reg, the best package we can for, 

for students and for institutions and for the for the 

taxpayer. That's about all I have to say. I don't know, 

and I'll turn it back over to the facilitators to 

determine what we do between now and four o'clock.
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MR. ROBERTS: But I see, I will turn 

it over to Cindy momentarily, but I do want to just note 

that Johnson, you've got your hand up, please.

MR. TYLER: Well, I want to thank 

everyone on the panel for this robust discussion the 

last week. It's a lot more exhausting than I thought it 

would be just in terms of brain power and sustaining. 

But I do have a substantive question here. It's come up 

a few times in looking at the proposed regulations. The 

issue of transcript withholding which is something 

that's really central to the work I do. People may not 

be familiar with this, but if you owe an institution 

money because your federal aid didn't come through or 

often because people drop out of school due to life 

events that happen, you incur a tuition debt and that 

really stops your education from going forward. You 

basically can't go anywhere because you can't get your 

transcript and you can't take out new loans. And we've 

been studying this in New York, and data shows that 9 

out of 10 people who this impacts are people of color, 

and that doesn't make complete sense when you just think 

of assets. These debts are often pretty low. But people 

of color just don't have acquired due to institutional 

rates, and they haven't acquired the funds or assets to 

pay off something for a rainy day like a $2000 debt, and 
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that basically ends their educational trajectory at a 

young age. They can file for bankruptcy, but that's 

really the only legal way to deal with the debt other 

than paying the entire thing off, which is often 

unaccountable. So I'm just wondering whether the 

Department of Education would entertain adding something 

to this negotiated rulemaking. Secretary Cardona has 

already talked about this and how he thinks it's a 

racial justice issue, but it's left up largely to 

states, and it seems like it could be a condition 

related to Title IV funding, and that is within the 

purview of the negotiated rulemaking that's going on 

right now.

MR. MARTIN: I would say anything we 

would add would have to be under the issues that we've 

discussed so far, we're not adding additional issues to 

the table, but it could fit into what we're doing. I'm 

not precluding that. There are, as we're all aware. I 

believe that is correct. There are equity issues 

involved. There are potentially some legal issues as to 

Department's authority there. We have thought about it,

and we are very concerned about the fact that there are 

students who don't get transcripts and or the continuing 

of their education is limited by that. I don't want to 

make any promises on the part of the Department for that 
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and to say any more than that, we do feel it's a 

problem. However, if you want to suggest that to us, 

feel free to do that, I will take it back. I will 

discuss with senior leadership, and we'll see, you know 

what we might be able to do there, but again, not making 

any promises one way or the other, but we will entertain 

it. 

MR. MARTIN: Anne.

DR. KRESS: I just certainly echo 

Johnson's concerns about sort of the stranded credits, 

but really want to underscore that this is right now, it 

varies dramatically based on state. So in Virginia, for 

example, there's been some legislation that's being 

introduced in the current session around stranded 

credits because as a Virginia higher education 

institution where actually a state agency treated just 

as though we were the Department of Motor Vehicles, for 

example. And so we're subject to all of the laws of the 

state, including some fairly strict regulations around 

the bad debts that are owed to state agencies. So I 

think that would be one thing I would put out there is 

we want to be very mindful of differences across various 

states, and I know that this has come up as a federal 

issue as well.

MR. MARTIN: Thank you. 
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MR. ROBERTS: Yael.

MS. SHAVIT: I want to echo Johnson's 

comment and say as well that I do think that there's 

room for this in the context of the issues on the table, 

particularly potentially in the context of program 

participation agreements. So hopefully we can do 

something meaningful for students there because this is 

a major issue that our offices see constantly.

MR. MARTIN: Thank you.

MR. ROBERTS: Jamie.

MS. STUDLEY: I agree that this is a 

critical issue, and it would be wonderful if the 

Department could think of some creative and bold 

solutions. I speak on this more as a person who, as an 

ED employee and independently worked with Beyond 12 and 

[inaudible] when they counseled students from a large 

institution that closed. Given the state of technology, 

it might be possible at the point of closure to do 

things like universal transcript distribution by a 

closed closing institution. Let's just leap ahead. I 

will share with you the [inaudible] guidelines for what 

an institution should do a teach out in terms of 

availability of transcripts, but this may be a moment 

that we can go beyond.

MR. MARTIN: Okay, thank you very 
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much.

MR. ROBERTS: And Barmak.

MR. NASSIRIAN: Yeah, I also share the 

sentiments that have been expressed around this. There 

are a couple of creative things this committee could do 

under its existing jurisdiction and on the basis of the 

agenda at hand. Certainly and I believe it was suggested 

earlier with regard to institutions that are either at 

risk of closure, on provisional certification or 

otherwise subject to some authority of the Department to 

preclude those institutions from having holds on 

transcripts and to mandate that they make arrangements 

while they're still alive with a state agency to serve 

as a repository for transcript. In addition, I want to 

suggest what was it like six or seven years ago, a 

public institution that I won't name ended up disenrolling 30 percent of its students because it had 

allowed multiple years of enrollment with debts just, 

you know, with unpaid bills. So I would say that no 

institution should be allowed to withhold even for 

purposes of collection of debts any more than the last 

term of attendance. If you allow the student to enroll 

again and again without having paid their bills, that's 

on you. That's a form of financial irresponsibility and 

you certainly shouldn't be able to withhold the 
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transcript. You know, I don't know of any other 

arrangement where the student already paid for 

everything else. Just because one term's tuition may 

have a balance on the student account should not allow 

the institution to basically take the entirety of the 

transcript hostage. So we could always sort of come up 

with a creative solution around that. Even with 

institutions that don't have any other adverse 

conditions.

MR. MARTIN: Thank you.

MR. ROBERTS: Thank all of you. Not 

seeing any more hands. I am more than happy to turn it 

over to the FMCS lead facilitator, Cindy, who I know has 

a few remarks that should carry us to public comment. 

Cindy, please thank you.

MS. JEFFRIES: I'm not so sure I can 

talk for nine minutes, but I'll say what I have to say. 

We, too, from FMCS. I want to thank and commend each and 

every one of you for your hard work this week and the 

dedication that you are exhibiting to this process. We 

also greatly appreciate all the kind feedback that we've 

received from a number of you directly to FMCS and 

vocally to the Department. So that is greatly 

appreciated. Just a few housekeeping items as we prepare 

for this break between sessions, a number of you have 
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stated that you will submit text on various issues that 

have been discussed for the Department to consider them 

between sessions so that they can really give it the 

time and effort to consider that and draft any amended 

text. And in the case of GE, the initial text, their 

goal, the Department's goal is to send out the amended 

text a week before the sessions, okay, so that you have 

the ability to look them over. Okay? That being said, 

they need to have your proposals to them before that. So 

you know it takes them time to prepare the text as it 

does you to write your proposals to them. So we ask that 

you send that text to them as soon as you have it, so it 

gives them ample time to give it the due consideration 

it deserves. Okay? Just a reminder, as we progress into 

the second week and move closer to the actual consensus 

taking process. Just a reminder on consensus. Okay? This 

is an issue-by-issue consensus process. So there will 

not be packaging for consensus and there will not be a 

consensus taken on the overall rule as a whole. We will 

stick to the issue by issue. Dissents on the consensus 

process per protocol should be based on serious 

reservations. And if you have those serious reservations 

and you are thumbs down, just know that you will be 

asked to state what changes you would need to get you to 

one of the two consensus levels, either here or here. 
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That is all that I have to say. In addition, I forgot I 

did forget to remind you that your proposals, your 

proposed text that you have or any information request, 

please send them directly to me and I will forward them 

on behalf of you to the Department. If you want anything 

also disseminated to the committee as a whole, if you 

don't send it yourself and you're expecting me to send 

your proposals and things, you need to tell me that you 

want me to do that. Okay? We encourage you to work 

together during this week. If you are so inclined to 

meet and discuss and see, you know, sometimes a lot of 

times collaboration is a pathway to agreement. So we do 

encourage you to do that if FMCS can be of assistance to 

you in any manner, any time during this process, 

including the time between breaks, please feel free to 

reach out to us. And we still have five minutes. Does 

anybody need to stretch their legs to just a couple of 

minutes or we do have two people in the waiting room at 

some point we may have lags, anyway, waiting for people 

to sign in. Again, I'm going to ask the public 

commenters that have time slots to please sign in so 

that we can make the best use of the time. Feel free to 

go ahead and sign in, even if you have a later time 

slot.

MR. ROBERTS: If I can just provide a 
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few clarifying notes to the public commenters. So when 

you do log in and we've been asking, but if you are 

listening to the live stream, it does create a bit of an 

echo with you still have it open once you're in the Zoom 

meeting. So if you wouldn't mind pausing that before 

admittance and just FMCS, you'll have three minutes to 

speak and FMCS will give you just an audible warning 

when you have 30 seconds left and the idea there is not 

to interrupt the flow of your comment. It's just to let 

you know that we do try to fill the time as robustly as 

possible. So that's the only reason we do that. And I'm 

seeing Brad's comments. If the Department has an answer 

to the data request or the turnaround time, feel free to 

provide it. But I'm personally not able to answer that, 

Brad, regarding response to data requests.

MR. ADAMS: The request is if we could 

get them as they're available and not wait until the 

very end.

MR. MARTIN: I appreciate it. I'll 

check on that.

MS. JEFFRIES: Preference committee, 

do you want three minutes to stretch recognizing we 

don't want you to leave, or do you want to jump right in 

with starting with the two people that have signed in 

already?
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Committee Meetings - 01/21/22

MR. MARTIN: I think we could go with 

the people who signed in.

MS. JEFFRIES: Alright. Brady and 

Kevin, I'm going to turn it back over to you.

MR. ROBERTS: Kevin who are we 

admitting first? 

MR. WAGNER: We're going to be 

admitting Gabriel Flores representing Title IV Access to 

core ELL Instructional Coach, The Los Angeles Unified 

School District, mouthful. Will let him in.

MR. ROBERTS: Mr. Flores, good 

afternoon. Can you hear us, Mr. Flores? 

MR. FLORES: Yes, I could.

MR. ROBERTS: Good afternoon. You have 

three minutes for public comment beginning when you 

start speaking.

MR. FLORES: Alright, thank you so 

much for having me this afternoon. Thank you for this 

opportunity to speak. Thanks especially to all of you 

for your public service. This is hard work and I'm 

grateful and thankful for your efforts. My hope is that 

the Biden administration and the Education Department, 

along with the U.S. Congress, will find a way to bring 

appropriate levels of accountability to all schools, not 

simply the private and for-profit colleges and 
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Committee Meetings - 01/21/22

universities. Now here's why I feel this way. I live in 

Los Angeles, California. I have worked for the Los 

Angeles Unified School District for more than 23 years. 

I completed my undergraduate teaching credential and 

master's degree at Cal State University Northridge. I 

earned a graduate certificate from Walden University, a 

school administration credential at National University, 

and I completed my doctoral program at University of 

Phoenix. My dissertation investigated teacher attitudes 

toward a more balanced multicultural education through 

the implementation of LGBT themed children's literature 

in classrooms. I am a published researcher, university 

faculty member, presenter at national conferences and a 

transformational leader within my school district. I am 

asking that this rulemaking committee and its members 

please take great care with the way it speaks of certain 

schools and programs, the quality of the education I 

received at all of my alma maters, public, private, forprofit nonprofit is noteworthy. I hope you'll reinforce 

that. I do not subscribe to the notion that a nonprofit 

institution is somehow automatically providing a higher 

quality education. Not at all. I received an exemplary 

education at my for-profit schools that I attended. The 

coursework was meaningful, rigorous, relevant, and 

immediately applicable to my profession. I believe that 
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Committee Meetings - 01/21/22

the aspiring college students need to find programs that 

match wherever they are at in life. That's what I have 

done. I find it disturbing when regulators exhibit a 

bias toward one school over another. When you speak of 

for-profits, please be sure to acknowledge 

accreditation. This debate should not focus solely on 

money or how much a graduate earns. I work in public 

education at LAUSD. I'm grateful for what I earn in my 

occupation, but to evaluate the quality of all my 

training based solely on my earned wages. Well, that 

would be a mistake. Take great care, please, as you 

write gainful employment standards and other rules. 

Understand that my wage is based on my chosen profession 

and where I live. Let us not create a new form of 

discrimination toward alumni who are creating positive 

social change and contributing to their society. Just 

because you may not believe that they should have 

attended a different college or university, do not speak 

ill of my hard work and determination because you may 

not agree where I completed my degree program. [Audio] 

traditional student working adult with the University of 

Phoenix. When I attended staff worked very hard to 

ensure I succeeded and completed my program. Please take 

great care to recognize our hardworking Americans who 

keep aspiring toward higher education and new learning. 
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Committee Meetings - 01/21/22

That's what we need, not a system that prioritizes 

school type over another. Stop discriminating and 

undermining people's education. My education. Creating 

more meaningful, positive educational change for all 

Americans. I know that's what you're working to do. But 

please keep in mind that all of us who have already 

graduated are applying what we have learned in the 

workplace. I know the committee has good intentions. 

This is important work. The policy making process-. 

MR. WAGNER: Your time is up. Thank 

you.

MR. ROBERTS: Thank you for your 

comment, Mr. Flores.

MR. FLORES: Thank you.

MR. ROBERTS: Alright. Kevin, who are 

we hearing from next?

MR. WAGNER: Let's see, here we have 

Dr. Mary Ann Markey representing themselves.

MR. ROBERTS: Good afternoon, Dr. 

Markey, can you hear me?

DR. MARKEY: Yes, I can.

MR. ROBERTS: Great. We can hear you. 

Video is great as well. You have three minutes for 

public comment, beginning whenever you start speaking.

DR. MARKEY: Very, good. Thank you. 
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Committee Meetings - 01/21/22

Good afternoon. My name is Dr. Mary Ann Markey and I've 

been teaching for Grand Canyon University since 2010, 

along with several other nonprofit and for-profit 

institutions while facilitating the majority of my 

classes online. I've noticed that some school 

administrations engage in practices that hinder 

students. For example, Grand Canyon requires professors 

to work 60 to 70 hours a week and reside in the Phoenix, 

Arizona, area to obtain full-time status, resulting in 

approximately 92 percent of faculty being classified as 

part-time employees. I, like others in my position, need 

to work at other universities to make ends meet on a 

part-time salary, which can impact the quality of 

instruction that students receive. Although I'm 

classified as part-time this semester, I have been 

teaching four courses, which requires reviewing over 700 

student discussion board posts and often multiple 

writing assignments, taking more than 40 hours of work 

each week. I want to give my students more 

individualized instruction, but the current system makes 

that impossible. If these schools invested more in their 

professors than in advisors and recruiters, it would 

lead to better outcomes for the students. As a 

professor, I'm trying to help all my students reach 

their professional goals. But Grand Canyon has told me 
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Committee Meetings - 01/21/22

that it's not a professor's job to advise students about 

any risks associated with pursuing a graduate level 

education. As a result, many students pursue extensive 

degrees that fail to provide a decent return on their 

investment. I teach capstone courses, which are the 

final courses required in a student's undergraduate 

degree plan. I asked my students to do a cost-benefit 

analysis to consider whether a masters or a Ph.D. Is 

necessary, but many of my students have already been 

convinced that they must have a more advanced or 

terminal degree. They're often shocked to learn the 

reality of the job market they're about to enter, in 

which an advanced degree may not benefit them and only 

result in greater debt. If the university's goal is to 

attract and retain students at any cost, that's 

unethical. I want them to attend because [Audio] I want 

them to attend because they'll receive a quality 

education. I don't want my students to walk away with 

excessive debt and an inability to function within their 

chosen career. Unfortunately, the growth of online 

schools sometimes puts us at a disadvantage by limiting 

access for students to build quality relationships with 

professors who truly care about their future. Someone 

needs to ensure that schools are investing in more longterm instructional teams and offering quality-
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MR. WAGNER: Your time is done. Thank 

you for your time.

DR. MARKEY: Thank you. Appreciate it.

MR. ROBERTS: Thank you for your 

comment. Kevin, who are we admitting next? 

MR. WAGNER: Sorry about that, I was 

muted. Let's see, we have Charles Riser Jr., 

representing, he's a co-founder of the Temple, a Paul 

Mitchell Partner School and the Temple from Annapolis, 

Maryland.

MR. ROBERTS: Mr. Reiser, can you hear 

me? 

MR. WAGNER: Here he comes.

MR. ROBERTS: I see Mr. Riser, you 

just got to turn on your audio. Kevin, do you want to 

admit the next speaker while we work on-. 

MR. WAGNER: Sure. Let's see. Let's 

do, we have Paris Lefttenant [phonetic], representing 

the Studio Academy of Beauty.

MR. ROBERTS: Thank you. And if you 

wouldn't mind just messaging Mr. Riser just to see if 

he's having audio troubles. Ms. Lefttenant, can you hear 

me? It looks like we're still having a few audio hiccups 

with our speakers. Kevin, why don't you admit more, and 

I can also send a message.
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MR. WAGNER: Sure. [Interposing] Sure. 

Next person will be Aaron Shenck, Executive Director of 

MAACS. Third time's a charm.

MR. ROBERTS: Good afternoon, can you 

hear us?

MR. SHENCK: Yes.

MR. ROBERTS: Excellent. Would you 

mind pausing your live stream in the background? We're 

just getting a bit of an echo. [Background talking] 

Aaron, would you mind, I think you still have the live 

stream on in the background, would you mind turning it 

off because we're getting feedback.

MR. SHENCK: I'll tell you what, can 

you come back to meMR. ROBERTS: Sure, let me mute you 

real quick. Paris, are you, I think, I have your audio 

as connected. Are you able to hear us?

MS. LEFTTENANT: Yeah, can you hear 

me?

MR. ROBERTS: We can. If you're 

comfortable, feel free to turn on your video, otherwise 

you have three minutes for public comment beginning 

whenever you start speaking. There you go, you just got 

to come off of mute and you're good to go.

MS. LEFTTENANT: Hi, my name is Paris 
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Lefttenant. I'm a esthetician graduate from the Studio 

Academy of Beauty in Chandler, Arizona. I know a lot of 

you often here may think that for-profit schools are 

bad, but I really enjoyed my experience from beginning 

to the end. They were very helpful with not only my 

schooling but helping me get a successful job in the 

industry. So when I heard about this meeting, they let 

me know about it and told me that if I enjoyed my 

experience, I should come on here and make a statement 

because they weren't only helpful with getting me 

through my schooling but getting me into a successful 

job in the industry. And I just wanted people to have 

the same chance that I did to enjoy their schooling as 

well. Thank you.

MR. ROBERTS: Thank you for your 

public comment.

MR. WAGNER: And I'll readmit, Aaron, 

see if he got everything squared away.

MR. ROBERTS: Sounds good. Alright, 

Mr. Shenck, welcome back.

MR. SHENCK: Thank you. Can you hear 

me? Everything good? 

MR. ROBERTS: Yeah, sounds great. You 

have three minutes for public comment, beginning 

whenever you start speaking.
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MR. SHENCK: Well, thank you very 

much. My name is Aaron Shenck. I'm the director of the 

Mid-Atlantic Association of Career Schools, which 

represents about 100 technical colleges and career 

schools in several states. Our institutions offer 

diverse programs. Some examples are welding, 

construction, auto mechanics, aviation maintenance, you 

know, culinary arts, I.T., cosmetology, nursing, and 

many, many more. Our graduates literally build your 

homes, keep your electricity on, fix your cars, keep 

your planes in the air, and many other essential jobs. 

Many of our students are ones that prefer not to tend to 

liberal arts. Or maybe they prefer a shorter-term 

program. They want to get in the workforce quicker, or 

they just want a hands-on career. Our membership 

includes both for-profit and nonprofit schools. However, 

a vast number of postsecondary current technical schools 

are considered for-profit under their tax [inaudible]. 

Sometimes certain groups or media looks at for-profit, 

and it looks [inaudible] kind of same apples on a tree. 

Nothing further could be [inaudible]. I have personally 

visited over 100 campuses of Title IV eligible forprofit schools. What I've seen with my own eyes does not 

reflect the perception somehow. The diversity of the 

sector, the high level of education and student 
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outcomes, the employer satisfaction and so many other 

positives in the sector have blown me away on my visits. 

That said, I do not question the previous [inaudible] 

negative experience that is their personal story, and I 

trust they're accurate. [Inaudible] question that some 

schools have let some students down, particularly those 

who have closed their doors early. However, these cases 

are not the norm and do not reflect the majority. We 

continue to try and help tell our story [audio] do that, 

I would like to make [audio] every member of this 

committee. My Board of directors meets next week, 

January 2 [audio] leaders of both many for-profits and 

nonprofits, and they represent the diverse field of 

trade. We offer any committee member one at a time to 

meet with our board. We'd be happy to share any 

information on our sector. We'd be happy to hear any 

criticisms you have or any questions you may have on 

specific issues [audio] not available that date, [audio] 

welcome [audio] The schools represented by my board 

[audio] for many years, including one of them [audio] by 

Forbes magazine as the number one trade school in the 

country. They take their students, employers, and 

communities very seriously and would love to have a 

conversation with any member of this committee. If any 

of you are interested in accepting this offer, my email 
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address is Aaron, A-a-r-o-n at M-A-A-C-S dot U-S. Again, 

that's Aaron, A-a-r-o-n at M-A-A-C-S dot U-S. Thank you 

very much for the time.

MR. ROBERTS: Thank you, Mr. Shenck, 

for your comment.

MR. WAGNER: Is Mr. Riser ready to go? 

He's already in.

MR. ROBERTS: So you just got to come 

off of mute. 

MR. RISER: I am off mute. Can you 

hear me okay? 

MR. ROBERTS: We can hear you great. 

Perfect. You have three minutes for public comment, 

beginning whenever you start speaking.

MR. RISER: Alright, thank you. Good 

afternoon, my name is Charles Riser. 20 ago, I cofounded two career colleges with my wife, Sharon. Our 

schools enroll approximately 150 students a year, and 

since founding, we have graduated close to 2,000 

students. My mom has been a hairdresser all of my life. 

The versatility of her career choice allowed my family 

to have the additional money to supplement my father's 

income while giving my mom the freedom to stay home and 

raise my siblings and myself. After studying computer 

science in college, I made a career change with my 
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parent's approval and became a hairdresser myself. I 

have seen firsthand how solid training and a hands-on

vocational career can be as rewarding as a degree from a 

traditional four- or five-year institution. College 

enrollments across the United States continue to drop as 

students look for less costly alternatives that will 

allow them to enter the workplace faster with less debt 

than they would get from a traditional institution. 

Personally, I support the idea that the investment of 

taxpayers’ dollars into a student's education needs to 

see a solid return on investment. I am suggesting that 

we focus on the fact that a student's income directly 

out of school is much different from their earnings 

potential later on in their careers. The cosmetology 

industry, much like many other industries, requires time 

and experience to gain a higher income. One of the 

reasons we have Income Based Repayment programs is to 

allow graduates to increase their debt payments slowly 

to match the income levels as they grow in their 

careers. The government already acknowledges that people 

make less income initially as they grow and come out of 

college. Additionally, it would be helpful if we were 

able to establish GE metrics that account for unreported 

income as the variance in our industry 

disproportionately impacts the numbers for our 
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graduates' income. The IRS has shown that the average of

10 percent of tips in the cosmetology industry go 

unrecognized. And while our schools recognize this 

should not happen and we do our part by adjusting our 

curriculum to educate our students on their financial 

responsibilities, the reality is that our income in the 

industry is unreported. Finally, some have suggested 

that community colleges can fill the needs for career 

and certificate-based education like our schools offer. 

However, during the last round of gainful employment, 

most of our local community colleges reached out to our 

campus locations because they were exploring removing 

their certificate-based programs precisely because they 

didn't feel they would be able to comply with gainful 

employment regulations. This only harmed student access 

to vocational programs by reducing the amount of 

programs available to our students. I wanted to thank 

you very much for the opportunity to talk today, and I 

sincerely look forward to the outcome of these 

negotiations. Thank you.

MR. ROBERTS: Thank you for your 

comment. Alright, Kevin, I think we are ready for our 

next speaker.

MR. WAGNER: Jenna Pitocco 

representing themselves.
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MR. ROBERTS: Good afternoon, Jenna, 

are you able to enable your audio? Good afternoon. Ms. 

Dowd, are you able to hear us?

MS. DOWD: Yes.

MR. ROBERTS: You have three minutes 

for public comment beginning whenever you start 

speaking.

MS. DOWD: Thank you. My name is 

Cheryl Dowd. I'm the senior director for the WCET State 

Authorization Network. We're a membership organization 

of more than 800 institutions nationwide, desiring to 

provide student protections through meeting state and 

federal compliance requirements for out-of-state 

activities of the institutions. We appreciate the 

Department giving me the opportunity to speak today 

regarding proposed language for 668.14(b)(32), which 

addresses institutions programs that lead to 

professional licensure or certification. We completely 

agree with the need to develop processes to support 

students to make informed decisions regarding programs 

leading to professional licensure certification. 

However, we wish to raise a few concerns about the 

proposed language in our interest in the development of 

regulations for which institutions can clearly comply to 

protect students. We believe the proposed language is 
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Committee Meetings - 01/21/22

directing that in each state for which institutions have 

state approval, complying with 600.9, noting that 

600.9(c) does include distance education, that the 

institutions must ensure that the programmatic 

accreditation is obtained if required, and ensure that 

the program satisfies educational requirements in the 

state. So I have four points to that effect. First, 

starting with the term, ensure. What does the compliance 

look like? What are the parameters to the term ensure? 

Second point, to require that the institution curriculum 

must meet state educational prerequisites, I urge the 

consideration that there be input to this committee from 

state licensing boards to address how state licensing 

boards can collaborate with institutions to support 

research so that the institutions can find, review and 

assess whether the institution's curriculum meets state 

educational requirements. As we know, requirements vary 

per state. So when we consider these requirements, the 

development of a curriculum to meet educational 

requirements for all states where the institutions meet 

state institutional approval per 600.9 may be 

impossible. Examples include perhaps teacher education, 

for which states may require a state history or state 

culture course pertaining to the state or, for example, 

experiential learning requirements which vary state by 
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state. How should the institution address that 

curriculum piece for the number of hours and perhaps 

classifications? And the fourth point, per the 

discussion this morning among the regulators, excuse me, 

a bunch regarding the negotiators about institutions not 

offering programs where the curriculum does not meet 

educational requirements, we're wondering if there may 

be a need for consideration for exceptions for certain 

groups of people who may wish to pursue programs in a 

particular state but had no interest in remaining in 

that state to obtain a license. Such groups could 

consider, you may want to consider are military students 

and their dependents who are located in a particular 

state while participating in a program [audio], but 

intend to pursue a license in another state. Another 

example could be students desiring the training from a 

specific institution but desiring to seek a license in a 

state where there are workforce needs. I thank you very 

much for considering these concerns raised as you 

develop a working regulation for which institutions can 

comply to protect students. Thanks very much.

MR. ROBERTS: Thank you, Ms. Dowd, for 

your comment. Alright, Kevin, I think we are ready for 

our next speaker.

MR. WAGNER: Alright, we have Victor 
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Inzunza representing Swords to Plowshares.

MR. ROBERTS: Mr. Inzunza, can you 

hear us? Good afternoon, Mr. Inzunza, can you hear us?

MR. INZUNZA: Yes.

MR. ROBERTS: Great. Good afternoon. 

You have three minutes for public comment, beginning 

whenever you start speaking.

MR. INZUNZA: Thank you. So what 

follows is simply the statement from Swords to 

Plowshares on the 90/10 loophole. So good afternoon to 

the officials and staff. Department of Education. My 

name is Victor Inzunza. I'm a Marine Corps veteran. I 

serve as a policy analyst at Swords to Plowshares. Our 

agency was established in 1974 to heal the wounds of 

war, restore dignity, hope and self-sufficiency to all 

veterans in need, and prevent and end homelessness and 

poverty among veterans. We offer employment and job 

training, supportive housing programs, permanent housing 

placement, counseling and case management and legal 

services. One of the most significant life changing 

opportunities for veterans is their time in college made 

possible by the benefits earned during their time and 

service. The policy requirements for Swords to 

Plowshares has spent over five years researching and 

advocating on behalf of military connected students. We 
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Committee Meetings - 01/21/22

have developed partnerships with students and leaders 

across the country to determine why institutional 

support systems matter. Institutions must have 

integrity, and they must make a commitment to support 

the students who come through their doors to provide 

quality education and a reputable degree. Our work with 

military connected students has revealed inconsistencies 

and support systems, leading many to seek outside 

resources in their communities, for example, in many of 

our recent studies, we found that students often 

struggle with financial issues, causing housing 

instability and food insecurity. The reality is that our 

military communities already face multiple challenges in 

their efforts to assimilate back into society. Predatory 

colleges exacerbate this unfortunate situation and can 

derail their futures entirely. Our agency administers VA 

supportive services for veterans and families, or SSVF, 

funds that help veterans on the verge of financial 

disaster and homelessness. Student veterans come to us 

for help. Meanwhile, the 90/10 loophole allows predatory 

colleges to rob veteran students of their educational 

benefits and deny them the promise of future careers, 

which require a college degree. Today, we ask the 

Department of Education to ensure strong implementation 

of the new law to close the 90/10 loophole. As you know, 
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the 90/10 loophole resulted in the targeting [Audio] 

Okay, great. Thank you. By aggressive and deceptive 

colleges. Countless service members, veterans, family 

members and survivors were seen as nothing more than 

dollar signs in uniform and had their lives ruined 

because of this loophole. We thank bipartisan members of 

Congress for listening to us and finally closing the 

90/10 loophole. Thank you.

MR. ROBERTS: Thank you for your 

comment, Mr. Inzunza.

MR. INZUNZA: Thank you.

MR. ROBERTS: Alright, Kevin, I think 

we are ready for our next speaker. I think you're muted.

MR. WAGNER: Yeah, I already announced 

Jenna, but it was actually Cheryl Dowd who did the 

speaking, so we are going to hear from the actual Jenna. 

Jenna Pitocco, I'm letting, representing themselves.

MR. ROBERTS: Good afternoon, Ms. 

Pitocco, can you hear us?

MS. PITOCCO: Hi, yeah, can you hear 

me?

MR. ROBERTS: We can. Yes, you have 

three minutes for public comment, beginning whenever you 

start speaking.

MS. PITOCCO: Alright, thank you. My 
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name is Jenna Pitocco, and I've been a cosmetologist for 

10 years. My education started at Duquesne University in 

Pittsburgh, Pennsylvania. I was studying communications 

and PR. I'm not a student who can learn from books and 

lectures, so I found myself really fighting to keep my 

head above the water in classes. And after admitting I 

was miserable in this traditional learning environment, 

I dropped out after completing my junior year of 

college. After doing my research, I enrolled into a Paul 

Mitchell cosmetology school for the first time in my 

life. School was fun. I loved learning and the training 

really connected with me. After getting my license, I 

started my career like 99 percent of the cosmetologists 

do, which is as an apprentice making minimum wage. That 

was nine years ago. Building my book took many years and 

required a lot of extra days at the salon to build as 

quickly as I could. I'm now on my own and extremely 

successful and also have my own salon in New York City. 

Doing what I love and what I'm successful at meant 

sacrificing provided health care, paid time off and paid 

maternity leave. This never made me question do I 

actually want to do this? I recognized how majority of 

people fail to even find a passion in life, especially 

one that creates a salary. I knew it would take time and 

a lot of effort to make money and reach a salary that 
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Committee Meetings - 01/21/22

was realistic for affording a life that wasn't paycheck 

to paycheck. People who find a passion sacrifice the 

ease of success because they truly love what they do. I 

think it is unfair that the committee here is putting 

vocations and education of our trades into gainful 

employment metrics that are so out of touch with the 

reality of career growth, especially for this industry. 

That's all.

MR. ROBERTS: Great, thank you. We 

appreciate your public comment. Thank you.

MS. PITOCCO: Sure. Thank you.

MR. ROBERTS: And Kevin, who is our 

final commenter for today, and in fact, this week?

MR. WAGNER: Last but not least, we 

have Juan Fernandez representing themselves.

MR. ROBERTS: Good afternoon, Mr. 

Fernandez, can you hear us? It looks like he needs to 

enable his audio. Oh, there we go. Can you hear us?

MR. FERNANDEZ: Absolutely.

MR. ROBERTS: Great. You have three 

minutes for public comment, beginning whenever you start 

speaking.

MR. FERNANDEZ: Excellent. My name is 

Juan Fernandez, not John K., but that's okay. That is 

really irrelevant. What really matters is the three 
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Committee Meetings - 01/21/22

minutes. Thank you for the opportunity to speak to you 

this afternoon and thank you all for your public 

service. The work you do is very important. Service to 

our country has been part of a family makeup. My brother 

is a retired Air Force guy, and I am a 30-year Army 

veteran. I used my GI Bill funds to work on a degree at 

the University of Phoenix. I started in 2004 when I was 

assigned to Southern Command in Miami. Managing work, 

family and in school was a challenge and the UOP, or 

University of Phoenix, had a nontraditional longdistance program, which at that time solves many of the 

problems that employed students face, especially those 

in the armed services. I was able to find a flexible 

option later at the University of Phoenix to work on my 

doctorate degree. [Audio] policy argument to downgrade 

what I accomplish at the University of Phoenix. We 

veterans know how to choose a school based on what we 

need, and we work hard to finish our coursework and earn 

our degrees, and the instruction quality was obvious. In 

fact, the application of lessons from a leadership class 

that I took before departing to serving in Iraq was 

instrumental in the success of the course staff 

[inaudible] I led from 2006 and 2007, actually under the 

leadership of General Odierno, who passed recently. The 

university was accredited. Accredited schools should be 
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Committee Meetings - 01/21/22

held to the same rules all. And then the most important 

thing is that through it all, the support I receive at 

the University of Phoenix made it possible for me to 

succeed in my post-graduate courses. Please, my request 

is that you engage more students with stories like mine. 

I know that there are some other students that will 

present you the counterpoint, but my point is that the 

university was fun, was engaged [Audio] We need 

consistency in the rules so that we can all advance in 

our careers. Thank you very much for allowing me to 

speak today. I yield the rest of my time.

MR. ROBERTS: Thank you very much and

thank you for your public comment. Alright, so with 

that, I believe we are at time. Thank you to all of our 

public commenters and thank you to all the work that 

this committee has accomplished this week. As always, if 

FMCS can be of service in between sessions, don't 

hesitate to reach out and we look forward to continued 

engagement with this committee. Thank you all very much.
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Appendix

Department of Education

Office of Postsecondary Education

Zoom Chat Transcript

Institutional and Programmatic Eligibility Committee 

Session 1, Day 4, Afternoon, January 21, 2022

From Anne Kress (P) Comm Colleges to Everyone:

Don’t know if you want to announce that I am back at 

the table for community colleges.

From Jamie Studley (P) Accrediting agencies to Everyone:

in e(1), suggest considering adding something to 

require in this situation that schools arrange a transcript 

availability process, beyond the specifics now listed on 

holds and records retention. Will try to provide language

From Anne Kress (P) Comm Colleges to Everyone:

+1 Jamie and +1 Yael on records—this is a very 

critical issue for students seeking to enroll in CCs post 

institution closure. A key student protection issue.

From Jamie Studley (P) Accrediting agencies to Everyone:

Now that I hear Yael +1 Yael's comment --my suggestion

is directly related to her remarks. I can work with her.

From Johnson Tyler, Brooklyn Legal Services to Everyone:

+1 for Ernest, Yael and Debbie. 9 out of 10 students 

who cannot access SUNY transcripts (a public) are people of 

color. Transcript withholding is super destructive b/c it 

ends ability to enroll in any institution forever baring a 

filing for bankruptcy or repayment of the entire debt that 

often is caused by financial aid being clawed back or not 

awarded.
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Committee Meetings - 01/21/22

From Ernest Ezeugo (P), Students/Student Loan Borrowers 

to Everyone:

+1 Debbie's push for clarification/definition on 

strong records retention plans.

From Jessica Ranucci (A)- Legal Aid to Everyone:

Are we on to subsection (f)?

From Jamie Studley (P) Accrediting agencies to Everyone:

+1 to Debbie etc. -- to clarify, in addition to 

retention I'm suggesting that for schools in this situation 

there be an option for the Sec to require that they have a 

mechanism in place for processing transcript requests (so 

beyond retaining records, they also have capacity or 

service to respond timely to students' requests for 

transcripts)

From Jessica Ranucci (A)- Legal Aid to Everyone:

+1 to Jamie and Debbie- record retention and 

transcripts are a huge problem at closing schools

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

my issue on marketing point 8 is the word alleged.

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

marketing compliance is extremely important.

From Jessica Ranucci (A)- Legal Aid to Everyone:

Johnson is going to come back to the table

From Johnson Tyler, Brooklyn Legal Services to Everyone:

I'm going to switch in on F with Jessica

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:
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Committee Meetings - 01/21/22

As stated, but for this committee I like that 1-3 are 

measurable items to achieve. The concern is the following 

language " in addition to any other conditions that the 

Secretary may deem appropriate

From Johnson Tyler, Brooklyn Legal Services to Everyone:

I'm switching out and Jessica is coming back

From Carolyn Fast (P) Consumer Advocates/Civil Rights 

Organizations to Everyone:

+1 to Jessica's point on the need for disclosures re: 

professional licensure requirements

From Carolyn Fast (P) Consumer Advocates/Civil Rights 

Organizations to Everyone:

Jaylon Herbin is going to coming to Table for 90/10

From Jessica Ranucci (A)- Legal Aid to Everyone:

Johnson is coming back again for 90/10. Sorry for all 

the back-and-forth announcements

From Ernest Ezeugo (P), Students/Student Loan Borrowers 

to Everyone:

Carney King will be coming to the table to represent 

students/student loan borrowers for 90/10.

From Laura Rasar King (A) Accrediting Agencies to 

Everyone:

Jamie Studley is back for Issue #7

From Jamie Studley (P) Accrediting agencies to Everyone:

+ 1 to taking another look at keeping disclosures --

may be needed even with stronger reqts elsewhere

From Kelli Perry (P) - Private, Nonprofit Institutions of 

Higher Ed to Everyone:

Emmanual will be coming to the table for this issue.
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Committee Meetings - 01/21/22

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

I apologize. I did not catch where we stopped

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

are we going through 1 or are we on 2 as well?

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

I want to put this in the chat that not all VSOs 

believe the 90/10 rule is a good proxy for educational 

quality: https://veteranseducationproject.org/wpcontent/uploads/2021/02/Veterans-Education-ProjectResearch-Study.pdf

From Cindy FMCS Facilitator to Everyone:

Brad to answer your question you are on a 1 only at 

this time.

From Adam Looney (Advisor) to Everyone:

Regarding private loans, I thought there were specific 

rules about how to account for private loans that 

potentially limited the scope for abuse?

From Barmak Nassirian (A) Servicemembers & Vets to 

Everyone:

The organization cited by Brad is an outlier within 

the VSO/MSO community, as evidence by the fact that 28 

well-established well-known VSO/MSOs endorsed our 

nomination, while no one fully understand the organization 

in question's membership or source of funding

From Carney King (A) Students/Student Loan Borrowers to 

Everyone:

https://vetsedsuccess.org/law-enforcement-actionsagainst-predatory-colleges/
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Committee Meetings - 01/21/22

From Carney King (A) Students/Student Loan Borrowers to 

Everyone:

Most VSO’s are in favor of protecting veterans. Many 

track predatory colleges.

From Barmak Nassirian (A) Servicemembers & Vets to 

Everyone:

Brad is INCORRECT in claiming that the housing 

allowance should be excluded, as evidenced in the statutory 

text: inserting ‘‘Federal funds that are disbursed or 

delivered to or on behalf of a student to be used to attend 

such institution (referred to in this paragraph and 

subsection

(d) as ‘Federal education assistance funds’)’’ 

(Students are getting the housing allowance to be used only 

if they attend the institutions.)

From Barmak Nassirian (A) Servicemembers & Vets to 

Everyone:

Exclusion of the housing allowance is not supported by 

the statute

From Jaylon Herbin (A) Consumer Advocates Civil Rights & 

to Everyone:

To follow up with @Adam Looney I was referring to 

being concerned about institutional loans under the 

proposed 668.28(a)(5)(i)

From Jaylon Herbin (A) Consumer Advocates Civil Rights & 

to Everyone:

We are concerned with the proposed language related to 

the annual payments received by the institutions on the 

institutional loans in 668.28(a)(5)(I) but we can return to 

this when we get to that section.

From Barmak Nassirian (A) Servicemembers & Vets to 

Everyone:
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Committee Meetings - 01/21/22

Third-party private loans should be treated as 

institutional loans if there are any origination or 

business relationships between the school and the lender. 

including institutional credit enhancement or buy-back 

agreements

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

Greg is correct. We have no ability to steer students 

away from their available funding.

From Adam Looney (Advisor) to Everyone:

Yes, I hear your concern. I thought that the potential 

for abuse may also be addressed by where those loans live 

in Appendix C's waterfall and the fact that the calculation 

includes only the NPV of the loan.

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

there is still no proof that those housing funds were 

ever used at the institution

From Carney King (A) Students/Student Loan Borrowers to 

Everyone:

To be clear, the GI Bill includes MHA, or Monthly 

Housing Allowance, and not BAH.

From Travis (P) Servicemembers & veterans to Everyone:

Barmak will be coming back to the table for 

servicemembers and veterans

From Carney King (A) Students/Student Loan Borrowers to 

Everyone:

Also concerned with reference to fiscal year

From Yael Shavit (A) -- State AGs to Everyone:

+1 to Barmak
148

Committee Meetings - 01/21/22

From Jamie Studley (P) Accrediting agencies to Everyone:

I wonder if the Dept has considered a way to avert 

this danger that does not require the actual drawdown -- by 

imputing the revenue for a certain period to the relevant 

fiscal for purposes of calculating 90/10?

From Marvin Smith (P) 4 Year Publics to Everyone:

+1 to Jamie question

From Debbie Cochrane (P), State Agencies to Everyone:

Perhaps the rule could count funds that were available 

to be drawn down, but not actually drawn down.

From Jamie Studley (P) Accrediting agencies to Everyone:

+1 -- I believe Debbie and I are making similar 

suggestions

From Anne Kress (P) Comm Colleges to Everyone:

+1 @Debbie — this seems like a good path

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

I will withhold my question on 3 - iii until after the 

break.

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

or I can raise my hand if you want to knock it out.

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

Anne can go in front of me

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

I am indifferent
149

Committee Meetings - 01/21/22

From Jaylon Herbin (A) Consumer Advocates Civil Rights & 

to Everyone:

+1 Barmak

From Beverly (Primary/MSIs) to Everyone:

I am leaving the table, and Ashley will join the table 

for the remainder of the afternoon.

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

can we vote on section 4 separate than 5?

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

to be clear only the cash paid on those loans while 

they are in school count to the 10

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

sorry I meant to say only cash paid. in school is not 

a factor

From Carney King (A) Students/Student Loan Borrowers to 

Everyone:

Thank you for clarifying, Barmak

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

Barmak. I will address your question

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

recourse or non-recourse is an important difference.

From Yael Shavit (A) -- State AGs to Everyone:

+1 Barmak
150

Committee Meetings - 01/21/22

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

students can be sued for default whether or not they 

are sold. Makes no difference if the loan is in default.

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

may I make a brief response to bBarmak

From Kelli Perry (P) - Private, Nonprofit Institutions of 

Higher Ed to Everyone:

I will be returning to the table.

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

he may answer my question

From Jaylon Herbin (A) Consumer Advocates Civil Rights & 

to Everyone:

+1 Barmak

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

24 months plus 45 days I believe

From Barmak Nassirian (A) Servicemembers & Vets to 

Everyone:

+1 on Carney's point about disclosure of failing 90/10 

to current and prospective students

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

+1 Greg

From Dave McClintock (Advisor) auditor to Everyone:

+1 Greg and Johnson
151

Committee Meetings - 01/21/22

From Barmak Nassirian (A) Servicemembers & Vets to 

Everyone:

Thanks to all the colleagues involved in this effort, 

particularly the staff of the Department and FMCS

From Emmanual Guillory (A)-PNPs to Everyone:

+1 Barmak

From Ernest Ezeugo (P), Students/Student Loan Borrowers 

to Everyone:

+1 Johnson's comments here

From Jaylon Herbin (A) Consumer Advocates Civil Rights & 

to Everyone:

+1 Johnson's comments

From Carolyn Fast (P) Consumer Advocates/Civil Rights 

Organizations to Everyone:

+1 Johnson's comments on transcript withholding

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

+1 Barmak

From Carney King (A) Students/Student Loan Borrowers to 

Everyone:

Ernest will be coming back to the table for 

students/student loan borrowers

From Jamie Studley (P) Accrediting agencies to Everyone:

Yes to Barmak: we urge pre-closure plans to preserve 

and ideally arrange resource for transcript distribution

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

Do we have an estimate turnaround time on red lines 
152

Committee Meetings - 01/21/22

for week 2? Will it be a week before the session like last 

time?

From Bradley Adams - (P - Proprietary Institutions) to 

Everyone:

can we get responses on data requests made this week 

on a rolling basis?