Negotiated Rulemaking Program Integrity and Institutional Quality – 2/5/24

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 DEPARTMENT OF EDUCATION

 OFFICE OF POSTSECONDARY EDUCATION

 NEGOTIATED RULEMAKING PROGRAM INTEGRITY 

AND INSTITUTIONAL QUALITY 

 SESSION 2, DAY 1, MORNING

FEBRUARY 5, 2024

On the 5th day of February, 2024, the

following meeting was held virtually, from 10:00 a.m.

to 12:00 p.m.
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P R O C E E D I N G S

MS. JEFFRIES: Good morning and 

welcome to session two, day one of the negotiated 

rulemaking on Program Integrity and Institutional 

Quality. I am Commissioner Cindy Jeffries, and I'll be 

facilitating the group this morning. It's my distinct 

pleasure to welcome all of you. And with that, unless 

there's any opening remarks at this point from the 

Department, we're going to move on to the roll call for 

record of the nonfederal negotiators. Seeing nothing. 

Let's go ahead and take our roll call. So, for business 

officers from institutions of higher education primarily 

is Joe Weglarz. Joe, are you present? Perhaps he'll join 

us in a bit. The alternate is Dom Wright.

MR. CHASE: Dom Chase, present.

MS. JEFFRIES: I don't know why this 

keeps putting that. I am so sorry, Dom. For some reason, 

my system likes that other name. Civil rights 

organization and consumer advocates, primary Carolyn 

Fast.

MS. FAST: Good morning.

MS. JEFFRIES: Good morning. And the 

alternate is Magin Sanchez.

MR. SANCHEZ: Good morning, everyone.

MS. JEFFRIES: Good morning. Financial 
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aid administrators, primary JoEllen Price, who was absent 

this morning but plans to attend this afternoon. So, in 

her place will be alternate, Zack Goodwin.

MR. GOODWIN: Good morning and happy 

Monday everyone.

MS. JEFFRIES: Good morning. 

Historically Black Colleges and Universities, tribal 

colleges and universities and minority serving 

institutions, institutions of higher education eligible 

to receive financial assistance under Title III, parts A 

and F, and Title V of the HEA, the primary is Charles 

Prince.

DR. PRINCE: President.

MS. JEFFRIES: Good morning. And the 

alternative is the D'Angelo Sands.

MR. SANDS: Present.

MS. JEFFRIES: Good morning. 

Institutional accrediting agencies recognized by the 

Secretary; primary is Jamie Studley.

MS. STUDLEY: Good morning.

MS. JEFFRIES: Good morning. And the 

alternate is Michale McComas.

MR. MCCOMIS: Good morning.

MS. JEFFRIES: Good morning. Legal 

assistance organizations, primary is Robin Smith. Robin, 
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are you with us?

MS. LAING: Robin won't be joining 

today's session.

MS. JEFFRIES: Okay, great. Thank you. 

So, the alternate Sophie Laing will be sitting in in her 

place. Sophie, welcome.

MS. LAING: Good morning.

MS. JEFFRIES: Private nonprofit 

institutions of higher education, the primary is Erika 

Linden, who is also absent this morning but plans to 

attend this afternoon. So, in her place at the table will 

be the alternate, Scott Dolan.

MR. DOLAN: Good morning.

MS. JEFFRIES: Good morning. 

Programmatic accrediting agencies recognized by the 

Secretary to include state agencies recognized for 

approval of nurse education, the primary is Dr. Laura 

Rasar King.

DR. KING: Good morning.

MS. JEFFRIES: Good morning. And the 

alternate is Amy Ackerson. 

MS. ACKERSON: Good morning.

MS. JEFFRIES: Good morning. 

Proprietary institutions of higher education, the primary 

is Jillian Klein.
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MS. KLEIN: Hi, everybody.

MS. JEFFRIES: And the alternate is 

David Cohen.

MR. COHEN: Good morning.

MS. JEFFRIES: Welcome, both of you. 

Public four-year institutions of higher education, the 

primary is Jason Lorgan.

MR. LORGAN: Good morning.

MS. JEFFRIES: And the alternate is 

Alyssa Dobson.

MS. DOBSON: Good morning.

MS. JEFFRIES: Good morning, both of 

you. Public two-year institutions of higher education, 

the primary is Jo Alice Blondin.

MS. BLONDIN: Hi there.

MS. JEFFRIES: And the alternate is 

Michael Cioce.

MR. CIOCE: Good morning.

MS. JEFFRIES: Good morning, both of 

you. State attorneys general is Diana Hooley.

MS. HOOLEY: Good morning.

MS. JEFFRIES: And the alternate is 

vacant. Good morning, Diana. State officials, including 

state higher education executive officers, state 

authorizing agencies and state regulators of institutions 
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of higher education. For primary we have John Ware.

MR. WARE: Good morning.

MS. JEFFRIES: Good morning. And 

alternate Robert Anderson.

MR. ANDERSON: Good morning, everyone.

MS. JEFFRIES: Good morning. Students 

or borrowers, including currently enrolled borrowers or 

groups representing them, primary is Jessica Morales. 

Jesse, are you with us?

MS. K. SMITH: She was here. I'll just 

check and see if she's having any issues.

MS. JEFFRIES: We'll move on to the 

alternate for that group is Emmett Blaney.

MR. BLANEY: Good morning.

MS. JEFFRIES: Good morning. U.S. 

military service members, veterans or groups representing 

them, the primary is Barmak Nassirian.

MR. NASSIRIAN: Good morning.

MS. JEFFRIES: Good morning. And the 

alternate is Ashlynne Haycock-Lohmann.

MS. HAYCOCK-LOHMANN: Good morning.

MS. JEFFRIES: Good morning. And next 

we have our Federal negotiator, Greg Martin.

MR. MARTIN: Good morning, everyone.

MS. JEFFRIES: Good morning. Alright. 
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Did I miss anyone in the group? If not, we'll move on to 

the non-voting participants from the Department. From the 

Office of General Counsel, we have Ms. Denise Morelli, 

for issues other than accreditation.

MS. MORELLI: Good morning.

MS. JEFFRIES: Good morning. Ms. Donna 

Mangold for accreditation from the Federal student aid 

office of policy implementation and oversight.

MS. MANGOLD: Good morning.

MS. JEFFRIES: Good morning. Mr. David 

Musser from the office of postsecondary education 

accreditation group, David?

MR. MUSSER: A couple of changes to 

the offices. I'm from the office of Federal student aid. 

Donna is from the office of general counsel.

MS. JEFFRIES: Oh, I must have had 

that backwards on the first one. I apologize for that.

MR. MUSSER: Good morning.

MS. JEFFRIES: Good morning. Mr. 

Herman Bounds.

MR. BOUNDS: Good morning. Good 

morning.

MS. JEFFRIES: Anyone else from the 

Department? Okay. So, thank you Department. I want to 

make a note that the Department has not included a TRIO 
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Subcommittee report out for session two, as the 

Subcommittee is not at a point of making a 

recommendation. They are actively considering options and 

would like to further their discussions on a final 

recommendation in their second session, which is this 

Friday, February 9th. You as committee members are 

welcome to watch the session on the public link. We will 

include a readout from the Subcommittee before consensus 

is taken by this committee during session three. Lastly, 

I want to introduce roll call. The rest of the FMCS 

facilitation team, Brady Roberts.

MR. ROBERTS: Good morning, everyone.

MS. JEFFRIES: John Weathers.

MR. WEATHERS: Good morning, everyone.

MS. JEFFRIES: Krystil Smith.

MS. K. SMITH: Good morning.

MS. JEFFRIES: And Kevin Wagner.

MR. WAGNER: Good morning.

MS. K. SMITH: And Cindy, Jessica 

Morales is on. She's having a little bit of issues with 

her audio, but she is on right now.

MS. JEFFRIES: Okay, great. Welcome, 

Jessica. At the end of each day this week the main 

committee meets with the exception of the final session 

day, we will reserve time for public comment. Next, we'll 
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move on to the next agenda item. And I want to make note 

that during this session this week, each issue paper will 

be reviewed and discussed. We will be using what we call 

temperature checks on each issue paper. Temperature 

checks are not consensus and are utilized to get a 

reading on where the committee currently stands and the 

opportunity for those who are in dissent on an issue to 

add any additional comments other than what has already 

been stated as to what they would need to move them 

towards consensus. So, we will be conducting temperature

checks today at the end of each paper. So, with that, 

unless there's any additional comments. Laura?

DR. KING: Thank you. I just had a 

clarifying question if that's okay. I just wondered if 

you could clarify the role of the proposals that come via 

email in between sessions as well as the chat? It seemswe're getting an overwhelming number of written comments 

in between sessions, and it seems different than other 

negotiated rulemakings that I've been a part of in the 

past. So, I just wanted to get a sense of what- to 

clarify the purpose of those and what we're expected, 

intended to do with them. And then also clarify the role 

of the chat that we use during the meeting.

MS. JEFFRIES: Okay. On the first 

portion of that Laura, I'm- the only thing that I'm aware 
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of that you're receiving are the proposals that are being 

sent and or supporting documents that are being sent by 

various negotiators. Sending them to us, wanting them 

sent to the Department. And in transparency, we send 

everything that we send to you or to the Department, to 

everyone. So, I'm not sure if you're getting stuff 

outside of what an FMCS team member is sending. So, what 

you're receiving is, you know, documents or documents 

from various negotiators that are submitting either a 

proposal to the Department on one of the issue papers or 

supporting documents. And some of those, I think these 

are all on the website, but some of those maybe, are you 

referring to, like, the letters of support, the 

documentation letters, things like that?

DR. KING: I think I'm just more 

interested in knowing how they're being used. Because 

when we're sent those things, there's no opportunity to, 

I mean, I guess you could submit a counter proposal or 

something, but there's no opportunity to discuss. So how 

are they being used? It's an overwhelming amount of them.

MS. JEFFRIES: Yeah, there were quite 

a few. This topic generates a lot of ideas and 

suggestions. When the negotiators want them sent to the 

Department, the Department uses them in between the 

sessions to review and consider if any of those changes 
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might be able to be incorporated in the round of 

regulatory text that they're preparing for the following 

session. Which is always the standard case. Now, Greg, I 

don't know if you want to add anything about what happens 

on your end when you receive those proposals.

MR. MARTIN: Sure, I can address that. 

So, it is true that the number of proposals can seem 

overwhelming. There can be quite a few of them. This 

particular negotiated rulemaking session is no different 

than any other with respect to how we treat them. Cindy 

went over the protocols for them. We make certain that 

everybody sees what's been proposed. So, we do receive 

several proposals that come into us. We review every one 

of those as they come in. As far as the, you know, 

addressing the question of what as a negotiator you 

should be looking at, obviously you should, to the extent 

you have time, be looking at those proposals. What 

happens to those proposals? Well, we do review them at 

the Department and anything from those proposals that we 

have decided to include in our own proposal that is 

expressed to you in the issue papers and in the proposed 

regulatory text will be there. So, we did get several 

proposals from the first round of negotiated rulemaking. 

You can see that we have issue papers for what was round 

two of this negotiation and anything that we took from 
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those proposals to include in our text will be reflected 

in that proposed text. So obviously we didn't take 

everything that was proposed. We analyzed them and looked 

at what we could and could not what we believe recently 

put in there. When we get to those sections, I'll 

indicate where those changes are made. And at that time, 

any negotiator, whether it's the person who proposed it 

or other negotiators can provide their opinions as to 

what they think about those changes. Whether either in 

support or whether they object and if they want to 

propose alternative text. They can do that. So,

everything that we- the only- I'll say this, the only 

thing that will actually ever be voted on for consensus 

is what the Department ultimately proposes. And that's 

always going to be reflected in the papers that we give 

you. So, although there may have been a lot of proposals 

given to us, what we took of that or what we're going to 

discuss today, is included in these papers. So, I just 

want to point that out. There's nothing happening that 

the negotiators will not have an opportunity to discuss 

because it will be in here. So either you can say, yes, I 

support that, I don't support that. Or for those who 

proposed it, if they want to ask why, you know, we didn't 

include other aspects of the proposal. That's all on the 

table. As far as the chat goes, we do entertain questions 
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in the chat. We also accept data requests. People can, 

you know, put forward data requests in the chat. So, it's 

used for that purpose. I also know it has- it's just- and 

it's also a forum for anybody on the committee to comment 

as they choose. But I want to make it very clear that 

nothing is being proposed to us that isn't disclosed to 

everybody. And I think that keys back to Cindy's point 

that, when those proposals come in that they are going to 

share them with everybody in the interest of full 

disclosure. So, it can seem like a lot. It's a lot to us. 

We had a lot to review in the intervening few weeks 

between the first session and this session. But just know 

that everything that we have included will be reflected 

in the text we're going to look at today. And you'll have 

an opportunity to discuss all of it as we go through each 

section. I hope that answers your question.

MS. JEFFRIES: Thanks, Greg. Okay. 

Seeing no other hands, I think we're going to move on to 

the first issue paper, which is cash management, and I 

will turn that over to Greg.

MR. MARTIN: That's me, I almost 

forgot. Yeah, that's- I'm on board. So. Right. She's 

right. We're going to be looking at cash management as 

our first issue paper and I want to say a little bit 

about, Vanessa's bringing that up, before we get into it, 
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I'll say a little bit about the papers. What you have in 

front of you here and the process this week. As Cynthia 

noted, we will be going through each topic in the same 

order that we did, as we did rather the first round of 

negotiations. We will walk through each issue paper in 

order. And discussing each section as we go through. 

Taking temperature checks at the completion of each of 

those, or the conclusion of each of those sections after 

everybody has said what they want to say about those. So,

I think the format we're going to use will be very much 

the same as last time. Before we go further, I want to 

make one overall announcement. And this is not so much 

for negotiators as it is for those who may be following 

these proceedings via the live stream. We have had, over 

the past couple of weeks, a number of requests come in to 

me and other Department employees, requests for meetings 

from members of the community about issues that are being 

discussed at these negotiations. And I want to make clear 

that while these negotiations are going on, the only 

venue for discussion of these issues is at these 

proceedings. So, in order to be negotiating in good 

faith, it has to be the case that we do not entertain 

requests for meetings, any other types of discussions, 

outside of these proceedings. For those individuals who 

may want to express their point of view that you have two 
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avenues for that. The first would be to contact one of 

the members of the committee. Remember that this process, 

the way it works, is that the Department selects 

representatives from various constituencies. And those 

individuals who are at the table today represent those 

constituencies. So, you may contact any one of those 

people with suggestions you may have. The other avenue 

for you to express your opinion is through public 

comment. But I cannot respond to requests for other phone 

conversations or email discussions about anything going 

on during these negotiations. So, I just want to point 

that out as we move forward into issue paper one, cash 

management. I also want to say that as we go through the 

week, you'll see the same negotiators. I remain the 

Department's lead negotiator and I'm the voting member 

for the Department. However, I will be discussing cash 

management. I will be leading the discussion on state 

authorization. When we get to R2T4 that will be David 

Musser, a colleague from FSA. He will also lead the 

discussion on distance education. And, finally, with 

accreditation, that will be Mr. Herman Bounds from our 

accreditation group who will lead that discussion. So 

just letting you know how the week will progress. If we 

look at- before we get into issue paper one, cash 

management, there is a side note there, a note to the 
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committee. I just want to go over this with everybody. 

That the changes made between session one and two are 

indicated with the yellow highlighting, black text with a 

strikethrough and highlight is current reg text that the 

Department is proposing to delete for session two. Blue 

text is any new language the Department proposed during 

session one and two. Blue text with a strike through it 

is language that the Department proposed in session one 

and is rescinding or amending for session two. And 

finally black text with a strike through it is current 

reg that the Department is proposing to delete. So, it 

gets a little confusing as we move forward, obviously, 

because we have a lot of things going on. You had 

original reg text that we may propose to change. And 

then, obviously we made some revisions to that based on 

proposals we've received. Also, other things the 

Department has considered. I'll try to go through that. 

As we go through each section, what I'll try to do is go 

over some of the proposals that were made. A little bit 

about what I had accepted. I can also talk a little bit 

about some of the data requests that were made. We havesome of them we are still in the process of complying 

with and we have not yet been able to fulfill those 

requests yet. But that's an ongoing process. And if I 

miss something because it's an awful lot, please feel 
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free to ask as we go through. So, with that, I think what 

we'll do is move into 668.162, reimbursement payment 

method. A couple of notes here before we actually discuss 

that section, is that we did add new part five to 

establish a 180 day time frame within which institutions 

are subject to heightened cash management, and receiving 

funds under the reimbursement payment method must submit 

their final HCM2 requests. And if we look at that 

language there, primarily what we did differently iflet's look first at 162. You can see the language there 

that we've had. An institution that loses eligibility 

while on reimbursement payment method must submit its 

requests for funds within 180 days of the date of loss of 

eligibility. Institutions must comply with any additional 

reporting requirements or procedures specified by the 

Secretary in relation to that submission- to submission 

of their final request for funds after loss of 

eligibility. Failure to submit the final request for 

funds within the specified 180 day time frame may result 

in forfeiture of the requested funds. You will see here 

that we- that this section was added for reimbursement. 

The reimbursement method. Previously, we only had made 

reference to heightened cash management. It is the case 

that when we place schools on something other than 

advance pay, it's normally heightened cash management. We 
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don't often use reimbursement. There's an additional 

level of documentation schools have to supply if they're 

placed on reimbursement. So, in the vast majority of 

cases, we place schools on heightened cash management. 

But reimbursement still does remain an option. So, we 

determined that we needed to revise those regulations and 

include the same language, pretty much the same language, 

for reimbursement payment method as there is for 

heightened cash management. And we already discussed that 

in the previous session, session one there's not a lot 

being changed here. Essentially, again, just adding the 

reimbursement payment method. I think we already 

discussed the Department's reasons for proposing this 

language. It's when a school loses eligibility we need to 

get these requests in as quickly as possible so that we 

can process them. It's a matter of our own procedures, 

sorting the funds properly, program integrity and also 

fairness to students in getting any monies out the 

students that they are deserving of. So, I will open the 

floor again for discussion of this if anybody has 

anything they would like to say before we move to a 

consensus, I'm sorry, not consensus, we move to a 

temperature check on this particular topic. So, with that 

we'll open the floor.

MS. JEFFRIES: Alright. Thank you, 
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Greg. Any questions or comments on that section 668.162?

MR. NASSIRIAN: Just a question, if I 

may?

MS. JEFFRIES: Sure.

MR. NASSIRIAN: Yeah. I remember we 

spoke, during the first round about the about my concern 

that institutions not be allowed to bill students. 

Institutions that that forfeit the funds because they are 

past the six month- because they're past 180 day period 

that they should not be allowed to bill students. And I 

was assured that that was the case. I asked that that 

point be somehow syncopated in this text. Is the 

forfeiture language intended to do that or is the 

Department certain that there is no likelihood that 

institutions could turn around and bill students?

MR. MARTIN: Yeah. We don't- we 

obviously, you know, don't want institutions, you know, 

billing students where they're unable to collect from the 

Department. There is, maybe Denise can respond to this, 

there is an issue of once these schools are no longer 

eligible, we have a limited amount of tools in our at our 

disposal to control what they do. As far as, if a school 

that's no longer participating, determined to not submit 

the request in a timely manner for this and bill students 

as to what action we could take. I'm not sure what that 
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would be. Denise, do you have any comments you want to 

make on that?

MR. MUSSER: Can I make a note?

MR. MARTIN: Oh, go ahead, David. 

Yeah, go ahead.

MR. MUSSER: So last time, I think 

Barmak, we discussed, a provision that was published as 

part of new regulations in the fall last year, that 

prohibits institutions from taking any negative action 

against a student when that institution has made an error 

with respect to the administration of their aid. And I 

think the situation that you described would clearly be 

one of- would be considered an error that would fall 

under that provision, which would prevent them legally 

from assessing a charge to the student for the amount 

that the school did not receive as a result of the late 

request. So that as of July 1st, 2024, will prevent 

schools from doing that in any event, and including, if 

we were to publish these rules, if they failed to have 

their request in timely. Now, I don't want to speak to 

how we could cross reference that. Although it could be 

something that the Department explains in the preamble as 

well if that is not immediately clear, which I don't 

think it is yet in the text. So, we can certainly think 

about how to communicate that connection when we draft 
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the final rule.

MR. MARTIN: That's a good point. 

Thanks, Dave. We can certainly take that back. And it may 

be possible, Barmak, for us to cross reference that in 

the [inaudible]. Would you be- would you- is that what 

you would be suggesting that we do?

MR. NASSIRIAN: Yeah. First of all, I 

appreciate the explanation. My only concern is that that 

rule may no longer have any legal application to an 

institution that is no longer a participating 

institution. So, to whatever extent, and I don't have a 

solution here, but to whatever extent the Department can 

somehow tighten the requirements so that it sort of 

applies prospectively. Because the student- because the 

potential liability was incurred at a time when the 

school was participating. That would be welcome. I'm just 

worried that past the point of departure, you may have no 

control over the institution's behavior.

MR. MARTIN: That's a great- that's an 

excellent point. And it's true. After school does cease 

to participate, there is a limited amount of control we 

have. However, I will say that schools that cease 

participation in our programs are required to provide a 

closeout audit to us. In any period of time for which 

this institution participates must be audited so they 
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have to do that. Obviously, anything that comes of that, 

if the institution chooses simply not to comply, some do, 

you're right, there's not a lot we can do. However, it 

does, as Dave said, it is a legal requirement that's out 

there if students want to take action on their own, if 

there's some kind of a class action. There's also- it 

also when schools fail to live up to their obligations, 

has ramifications for trying to come back into the 

programs, things like that. So, there are some- I agree 

wholeheartedly with you that it's limited, but there are 

some hooks that we have that we can apply. I don't know 

what else beyond that. David, do you want to go further 

than that?

MR. MUSSER: Well, I think I agree 

with everything you said, Greg. But the only other thing 

I would say is if you remember Barmak, in the earlier 

session, we pointed out that this is setting a time limit 

on when the school submits its request. But we also 

provided some flexibility for the Secretary to approve 

the request or part of the request. If even if the school 

is late on this. So, if- they actually do have an 

incentive to, number one, ultimately report this and 

number two, to report it accurately and to comply with 

all of our requirements, because if they don't, we may 

still end up withholding the funds from them that they 
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feel that they're entitled to. Now, once you get to the 

point where the school is out of our programs, they know 

they're not going to get any more of our money. And 

there's really nothing else that the Department has in 

terms of leverage, it does become extremely difficult for 

us to compel them to do anything in particularly outside 

of a court setting. If Denise has any other thoughts, I'm 

interested, but there is at least that part of it that 

encourages them to get, number one, get the request in on 

time, but number two, comply with all of our requirements 

if they want us to allow them to get any of that money at 

the end of the process.

MS. JEFFRIES: Okay. Thank you.

MR. MARTIN: I would also add, I think 

it's obviously a possibility schools won't comply with 

this or request the money. In most cases, I think that 

schools do want the money. You know, I mean, they're 

strapped, one of the reasons they closed maybe, they are 

going to request the funds. And ultimately, they usually 

always do. The purpose here is to get them to do that in 

a timely manner. I think Denise indicated before that 

she's seen it go as long as a year, two years, that's 

just absurd. And we're hoping that, you know, with this 

rule, it lights a fire under these schools to make the 

requests in a much more timely way. So that's really 
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where we're going here.

MS. JEFFRIES: Barmak?

MR. NASSIRIAN: So very quickly. First 

of all, I appreciate the explanation and I realize there 

are limitations to what the Department can do beyond a 

certain point. It would perhaps give me a little bit more 

assurance if at the very end of that sentence, the 

Department could consider adding some language to the 

effect of, I mean, you know, the forfeiture of the 

requested funds, which the institution shall be 

prohibited from attempting to collect from students. At 

least- at the very least, it creates a kind of rule that 

somebody can point to very specifically. You know, I'm 

not sure whether it has an enforcement difference in 

terms of the ability of the Department, but it may enable 

students who may be targeted, you know, sometimes by a 

receiver. It's not even the institution. Somebody's very, 

very, diligently attempting to collect on behalf of 

creditors could go after students and the Department 

would be unable to do much. It would be nice to have some 

explicit language, but I understand the explanation and I 

appreciate it. Thank you.

MR. MARTIN: We'll take that back, 

Barmak. We will consider whether we can put that language 

in there. So, we'll certainly make a note of that and see 
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what we can do for the next round. I'm totally with you 

on the not wanting to see students harmed in that way. 

It's certainly- the Department certainly takes that 

position as well. So, we'll see what we can do there. 

Thank you.

MS. JEFFRIES: Alright. Thank you. I'm 

not seeing any more hands, so let's quickly review the 

process for the temperature checks. A thumbs up means you 

are 100% on board and can support that language in- and 

we're talking about 668.162 at this point. A sideways 

thumb means you're not quite at that 100% part, but you 

are at least 70% in favor of it and would not object to 

it. A thumbs down means you object to the language. If 

you are a thumbs down, we will ask you to explain what 

your concerns are. We ask that you limit those comments 

during that period to things that hadn't already been 

expressed as well and offer some type of explanation and 

or concept language of what would help move you to a 

consensus on that piece. Any questions? Okay with that, 

let's go ahead and take our temperature check on 668.162 

reimbursement payment methods. Can I see your thumbs, 

please? Okay. Jesse, I can't see yours.

MS. MORELLI: I'm so sorry. I'm 

breaking in and out, so.

MS. JEFFRIES: Okay. Alright. It looks 
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like we don't have any thumbs down on that. Correct? 

Alright. So, your temperature check on that is complete. 

Greg, do you want to move to the next section?

MR. MARTIN: Sure. And I want to thank 

everybody for the discussion of that topic and providing 

an indication of support in that temperature check. The 

next thing we're going to go to is the discussion of 

668.164. This is crediting a student's ledger account. We 

have a couple of issues in here. Before we get into the 

actual discussion of 668.164, we'll go over a few of the 

things we did in this section. So first, I would 

apologize for the sirens in the background. I live very 

close to the road. The first thing we did was edit room 

and board to food and housing. This is simply a pro forma 

change to conform the more antiquated terms of room and 

board to the more modern term of food and housing that is 

used in the Simplification Act. So that's where we are 

going. So, every time we have we use the terms room and 

board, we will now be moving to food and housing. A 

little bit difficult for some of us who've been around a 

while and are used to room and board. But I think it does 

make more sense, it's certainly more descriptive. Under 

meal plans, we added clarifying language to specify that 

the funds allocated for cash value meal plans. That's 

flex dollars are what institutions must return, not the 
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portion of a meal plan that's associated with a given 

number of meals. We also added language that says an 

institution is not to return a balance that is less than 

$1, which conforms to our general guidance for credit 

balance, in terms of credit balances to students. We 

added language clarifying that an institution to carry 

over that- that institution rather needs authorization to 

carry over a remaining balance through an academic year 

so that the student can use the funds in the next 

semester. We were asked to do that in the last round, and 

we were also asked whether or not institutions could 

apply any unused meal plan funds for any unpaid allowable 

charges. The student has again, that would be with the 

student's authorization. So, we incorporated both of 

those aspects. Under textbooks, we removed the provision 

allowing institutions to automatically include the cost 

of books and supplies as part of tuition and fees for 

instances in which materials are only available through 

the institution. So that was removed. We moved the 

provision related to including costs and tuition and fees 

for health and safety reasons in 164 (c)(1) romanette 

(1)(a). We added language in 164 (c) romanette (2) to 

clarify that institutions can credit student ledger 

accounts with Title IV funds to pay for books and 

supplies, provided the institution discloses those costs 
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prior to any authorization being signed and the student 

chooses to purchase books and supplies, and the 

institution makes those books and supplies available to 

students at or below market rates. And I will stop there 

and we're going to get into those actual sections in 164. 

And we'll be looking at the actual changes now in the 

regulation. And we'll start with crediting a student's 

ledger account in 164 (c). So, I'll wait for that to come 

up on the screen. And we have it there. So, we'll start 

there. And I think what I'll do is try to break this up a 

little bit so that we have discussion as we go and not 

necessarily wait till the end when it's just too much for 

people to remember. So, try to 164- there's a lot in 164, 

right? So, I'll try to break that up as we go through. 

So, we can see here that crediting student's ledger 

account. We start with, an institution may credit a 

student's ledger account with Title IV, HEA program funds 

to pay for allowable charges associated with the current 

payment period and we give what those allowable charges 

are. And you can see there that we have changed room and 

board to food and housing. Just a conforming change. And 

then other changes here, an institution may only include 

costs of books and supplies as part of tuition and fees 

if the institution demonstrates that there is a 

compelling health or safety reason to do so. So, to make 
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everybody aware that that now is the only reason for 

which an institution can include the cost of books and 

supplies in tuition and fees. Moving down to (B). We made 

a change there, so, whereas previously you can see it 

was, any Title IV HEA program funds that's been stricken. 

So, any funds allocated for cash value meal plans for 

recipients of Title IV, HEA program funds must be fully 

utilized for the benefit of the respective student. And

you can see there any remaining balance at the end of the 

payment period must be returned to the student as soon as 

possible, but no later than 14 days after the end of the 

payment period. And some added text there for a de 

minimis amount. A school is not required to pay the 

remaining balance that is less than $1. With the 

student's authorization, under 668.165 (b)(1) romanette 2 

(B), an institution may retain the unused cash value meal 

plan funds through the earlier of the end of the academic 

year or 14 days after the end of the payment period in 

which the student ceases enrollment or apply unused meal 

plan funds to unpaid allowable charges. So, most of what 

I just talked about there was with respect to the meal 

plan. So, what I'd like to do now is open the discussion 

to what we propose with respect to the meal plans, and 

then maybe we'll deal with books and supplies later. So,

I'd like right now to limit the discussion to meal plans 
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and open the floor.

MS. JEFFRIES: Okay, first of all, I 

want to announce that Magin Sanchez, civil rights 

consumer advocacy groups, is going to be joining the 

conversation for a comment in this. So, with that, 

Barmak, you had your hand up, you put it down. Okay. 

Jason Lorgan.

MR. LORGAN: Thank you. So first, I'd 

like to start by thanking the Department for taking some 

of our recommendations to allow the funds to roll for an 

academic year with student authorization. But I wanted to 

bring up a point that - and while this conforms well to 

the way my own institution does this, and speaking to 

other public four-year institutions, I have learned that 

there are institutions whose entire meal plans are flex 

dollars, so it's 100% flex dollars. And so, those are for 

their housing students. And so, there's a considerable 

amount of concern that these mandatory meal plans now 

become optional. And I want to make a point about why 

that's such a concern. Right. So typically, states do not 

provide funding for things other than classrooms and 

laboratories. So, things like dining facilities. Right. 

And so, the way that we go and get a bond to build a 

dining facility, is to show just like an individual would 

show that they have income verification to get a 
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mortgage, we have to show that we have a stable source of 

income to support the bond. And so, there's considerable 

concern that these 100% flex dollar meal plans that are 

available at some public institutions will basically 

become optional and it will pose challenges towards 

paying off the bonds that were assigned with that fee in 

mind. Thank you.

MS. JEFFRIES: Thank you, Jason. Magin 

Sanchez.

MR. SANCHEZ: Again, I want to thank 

the Department for their proposals, particularly on the 

flex dollars. I think ultimately this is the student's 

money, and I think ultimately the students should have 

the right to be able to use their money as need be. I 

think in particular, I'm still a bit concerned about the 

focus on just the flex dollars, not necessarily on the 

meal swipes. I was reading a New York Times article 

recently, it's a couple of years old at this point, but 

they were looking at NYU in particular, and they did a 

survey about 523 students. And what they found was, I 

think the number is 45,399 swipes were left over. And if, 

you know, let's estimate, you know, between $5 to $12 a 

swipe at retail value. Right. So, we're talking about per 

student, the cost of those unused swipes is around $120 

to as much as almost $1,000. So, this is a sizable chunk 
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of money, right, that these students are losing if they 

don't have- if these swipes are so gobbled up right by 

the institution. And so, I think it's really important 

that the Department still considers including these meal 

swipes as part of the money that the students are 

refunded. In particular, at the very least, if not the 

full retail value, at least the cost value of these 

swipes to the institution. This is a sizable amount of 

money for students, not just from the flex perspective, 

but also on the swipes perspective. That can make a big 

difference in being able to be able to afford, you know, 

not just, you know, your general education expenses, but 

living expenses as well, and can make a really big 

difference for these lower income students. Thank you.

MS. JEFFRIES: Thank you, Magin. Next 

is Dom Chase.

MR. CHASE: Thank you. A couple of 

points about the language. I won't reiterate previous 

points, but I do think this language will have some 

unintended consequences of either reduction in this 

service, the availability of this service to students on 

a large scale, or it will have to be subsidized by other 

revenue sources like tuition. So could drive up the costs 

of other things related to, not related to this in order 

to support, food service operations. So, this is one of 
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those that it's not the same as a profitable business and 

selecting location. It is constrained by the geography of 

the campus itself in order to offer this service. So, in 

order for it to be revenue greater than expenses, 

participation is important or it will result in potential 

closures or a subsidy of some other kind. Thank you.

MS. JEFFRIES: Thank you, Dom. Jillian 

Klein.

MS. KLEIN: Good morning, everybody. I 

just have a question. I don't have a dog in this fight at 

all. I don't- we don't have any of this at our 

institution, but I'd just like to hear from the 

Department, if you can clarify, because I think what I'm 

reading in terms of the change between the last session 

and this session and correct me if I'm wrong, but it 

reads as though now this language would apply to any 

dollars that a Title IV student puts towards a meal plan. 

Is that right? As opposed- because I think in the first 

session, I read this as being specific to Title IV 

dollars. But now as I read what you've given us this 

session, it reads like any recipients of Title IV, even 

if they're not using Title IV dollars to pay for their 

meal plan would be subject to this. And I'd just like to 

understand that change and also just the Department's 

authority to make that change. Thanks.
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MR. MARTIN: Yeah, I can address that. 

So, if we go back and look at the language. So, you're 

right, Jillian, that the original language was any- once 

we reread that, it's stricken out here, but any Title IV 

HEA funds allocated for cash value meal plans for- so 

that's been taken out. So, it now reads, any funds 

allocated for cash value meal plans for recipients of 

Title IV funds. So, our authority to do this case to the 

fact that these are students who have received Title IV 

funds. The reason for the change is- sort of aligns with 

what we did with credit balances. At a certain point, it 

becomes, if students received funds from different 

sources, we don't have any order of posting rules 

associated with Title IV funds. So, where a student has 

received Title IV funds and other funds, it becomes 

nearly impossible to determine which funds paid for what. 

They sort of lose their identity at that point. So, if 

and what we did here was to make clear that these are for 

recipients of Title IV HEA funds. So, for a student who 

didn't receive any Title IV HEA funds, this would not be 

applicable at all. So, in the only instance in which you 

can guarantee that no Title IV funds -or what for this 

would probably be where a student was not a recipient. 

So, in order to not have to be parsing, well, was it 

Title IV funds that paid for it or was it funds from 
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another source. If the student did receive Title IV funds 

within the rules applicable. So that's our rationale for 

it.

MS. KLEIN: But presumably. So,

thanks. Sorry just to follow up. Presumably, so the 

Department already is assuming, and I understand this 

obviously having done R2T4s forever, right? Like where a 

student gets a small amount of Title IV, the Department 

presumes that it's covering tuition, which is why we do 

an R2T4 that includes Title IV funds and R2T4 

calculation. And that student may not have used any Title 

IV dollars to pay for, what are we calling it, food and 

housing?

MR. MARTIN: Food and housing. We have 

to get used to that.

MS. KLEIN: So I don't know, I just 

raise the question because I'm confused I think about, 

how the Department- and I understand you tried to answer 

my question, but I'll just restate that I'm confused 

about how the Department believes that they have 

authority over this, when there can be clear cases where 

the Department is assuming that Title IV dollars are 

paying tuition, we're calculating R2T4 based on those 

dollars falling in a tuition bucket. And then the 

Department is sort of stating that they have this 
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authority. So, I just would push on the Department a bit 

on that. Thanks.

MR. MARTIN: Thank you.

MS. JEFFRIES: Thank you both. Zach 

Goodwin.

MR. GOODWIN: Thank you. I'm sorry 

that I have not entirely thought this through yet because 

I literally thought of it two minutes ago. But I do- this 

is not something we do at our institution. I also don't 

have a lot of skin in the game here, in the sense that we 

don't do a lot of flex dollar programs for dining. But I 

do know many institutions who do allow their students who 

may have paid for such plans to donate the plans to 

someone else if they are not going to use them. But there 

might be another student in need, and this is now fairly 

commonplace for institutions to do this. And I'm curious 

if any thought might have been given to that kind of 

scenario and to whom the credit balance would belong in 

those cases. Because there is not necessarily an actual 

account transaction occurring. So, the Title IV funds 

would be credited to the initial recipient of the funds. 

I mean, it's not like they're moving the funds to someone 

else's account, for example. So, it's all happening 

behind the scenes.

MR. MARTIN: You know, Zach, we never 
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considered that. That does not come up in any of our 

discussions and I never even realized that was a 

possibility at schools, at certain schools. It's an 

interesting thing. It's sort of like, I don't know where 

I work at the Department and you can donate unused, you 

can donate your, you know, unused annual leave at the end 

of the year for people who are ill or have circumstances 

and certainly, you know, certainly that would be 

something. I don't have any problem with this idea. I 

think it's actually a very humanitarian good thing to do 

for people who have funds they can do this. I don't- I 

would say that much as we allow the school to care to do 

other things with the student authorization, I would 

think that we would be okay with offering that allowing 

such a thing with, of course, with that student's 

authorization. I will take it back and make certain that 

I'm not speaking out of turn, and I think that's a goodI think the Department's, you know, obviously about 

anything we can do to promote humanitarian uses of funds 

and, you know, where people who don't need that money and 

would rather just donate it, that's a fantastic thing. I 

don't think we want to get in the way of how we 

facilitate that, whether it's just a matter of guidance 

to say yes, that generally fits under here and would be 

allowed or whether we need to put it- and perhaps what we 
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can do, Zach, is put it in the preamble discussion that 

would be something that we would find acceptable as a 

student authorization with respect to this. So, I can say

that. So, what I will do is say that I don't believe the 

Department has any objections at this point. How we 

incorporate it, I don't know, I think I would probably 

right now be in favor of using the maybe the preamble. 

But I noticed that my colleague David has something he 

wants to say, so I will invite him to speak.

MR. MUSSER: Yeah, actually, you said 

it, I think, Greg. I believe at least looking at the 

language as it's currently written that we could consider 

funds that were transferred to another individual to have 

been used under the way that this is written. And we 

could probably clarify that in the preamble, but we willI think we'll look at it and see and make sure that 

that's a potential use.

MR. GOODWIN: Thank you so much.

MR. MARTIN: Thank you, Dave.

MS. JEFFRIES: Thank you. I want to 

note that Carolyn Fast has come back to the table for 

civil rights organizations and consumer advocates. Next 

up is DC.

DR. PRINCE: Thanks. Just a time 

check. How much longer do we have on this topic before we 
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need to move on?

MS. JEFFRIES: Well, we have a couple 

more hands and then we will then take a temperature 

check.

DR. PRINCE: Just want to make sure. 

So, the question I have is particularly on the message 

of, no institution may retain unused meal plan funds less

than a dollar, right? This, I think this is an arbitrary 

number that may have been put out there, whether it's 

from the negotiation or from the Department. And my 

question, my first question is, is there an opportunity 

in our revisions to increase that dollar amount for what 

can be retained without a student's authorization?

MR. MARTIN: Well, I, let's be honest, 

any time you're talking about a de minimis amount, which 

is basically what this is, there's a certain degree of 

deciding upon a, let's not use the word arbitrary, but 

there is, I just used it, there's a certain amount of, 

you know, what is appropriate. I think here the reasoning 

here is that much as with the credit balance, that a 

school should return the entirety of the credit balance 

to the student. It's not the same thing as where a 

student owes an overpayment and we're building in a 

building a tolerance. This isn't tolerance. This is 

student- we're talking here about student money. Again, I 
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sound like a broken record with that, but I think it's 

very important that we're talking about money which 

belongs to students. So, if we say, you know, $10, 

somebody else might say $20, somebody might argue $15. 

So, what we did was just keyed to our guidance on 

returning credit balances which we've instructed schools 

that- so that they don't have to worry about, you know, 

it's really about not worrying about cents that you can 

simply return the dollar amount over, you know, over a 

dollar. And just giving schools from administrative 

purposes, you're not returning, you know, $0.68 to a 

student. That's really all it's about. And that's why we 

settled on $1. It does key to the current practice. So 

that's our rationale for it. I mean, certainly if people 

have other things they want to suggest, we would take a 

look at it. I can say that we would be probably 

disinclined at this moment to go in any direction that 

would involve students not getting everything that 

they're owed back.

DR. PRINCE: No and thank you for 

that. I definitely understand. I don't think we- I just 

want to be clear, I don't think we always share the same 

definition of it's the student's money. So, excuse me if 

I don't agree with at least that piece. I'm trying to 

understand, you know, this particular process. But then 
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the other question becomes for us is how for me and the 

group that I've talked to about this, is how is this 

consistent with the other regulations that the Department 

has? Because one thing that I noticed in other 

discussions is that that dollar amount, whether it's 

authorization or it can be returned, is very flexible. 

And so, you're saying a dollar here. But if I remember 

correctly, there were other regulations where that 

regulation was either $50 or $25. There was a higher 

threshold. And so where is the level of consistency? And 

I question that level of consistency because I've seen it 

different in different places. And so, I'm wondering is 

the Department going to review its consistency and the 

use of this in other regulations?

MR. MARTIN: Yeah. So first of all, I 

mean, I think as I tried to and maybe didn't do such a 

good job before, this is different than those $50 $100 

amounts. Those are largely tied to statutory provisions. 

And they deal with- what's the word I'm looking for? They 

are tolerances for students being liable to return money. 

So obviously that's a whole different area. What we're 

talking about is what students have to return to the 

Department in cases where there was an overpayment, for 

instance, or if there's no repayment as a result of R2T4. 

Yes, there are built in tolerances there. That's money 
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that comes back to the Department. Here, this is simply a 

de minimis amount. And there's a discussion in volume 

four of the handbook, on this as it relates to credit 

balances. And really, since this is a credit balance, 

this is kind of a- this really is very similar to a 

credit balance. You've got unused actual cash on an 

account, and it involves Title IV funds. So, we're sort 

of applying the same principles which is that we believe 

the entirety of it ought to be returned. So, what we're 

really saying here is the entirety has to be returned. 

It's just we're applying a de minimis amount for 

administrative and procedural reasons. I don't know if I 

have any better explanation of it than that, but I invite 

my colleagues, David or Denise, to opine if they have 

more they want to add.

DR. PRINCE: Thank you.

MS. JEFFRIES: Alright. Thank you. 

Emmett Blaney.

MR. BLANEY: Thanks. Yeah. I would 

just like to echo, first, that it feels like we're all 

feeling amenable to the humanitarian use of funds as far 

as the meal donation programs. And I think that my 

understanding is allowing students to donate unused flex 

dollars would also not inhibit their ability to then be 

refunded, either after they donated a portion of those 
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flex dollars or if they chose not to donate. It also is a 

humanitarian use of funds to return the funding to the 

student who needs it. So, I want to make sure that both 

of those things are viewed as humanitarian. And then also 

my other understanding is that this would not make a meal 

plan optional. As was said before, I feel that and 

correct me, I guess, if I'm wrong, but you could still 

have a mandatory meal program that would just then, at 

the end of the program, require refunding the student's 

money. So, I just wanted to respond to those two things.

MR. MARTIN: Yeah, a couple of things. 

First of all, with respect to the donation, I think the 

way I had and the way David Musser described, I think 

it's very good way, if we can view it as that donation 

actually involves the funds having been used- so that 

funds are used. If it was a partial situation where part 

of it was donated, then the remaining portion would have 

to be refunded to the students to whom those funds 

belong. So, I think that's the way it would work under 

the way David sort of explained it. I don't want to put 

words in his mouth. I think that's what would happen. 

With respect to what schools can require, we're not 

getting- we're not in any way regulating what types of 

meal plan schools can require if they want to do all of 

it, if they want it to be 100% flex. That's up to them. 
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If they want to do the swipes, that's up to them as well. 

So, the Department's not in any way regulating schools 

with respect to what meal plans they have or require.

MR. BLANEY: Awesome. Thank you so 

much.

MS. JEFFRIES: Okay. Thank you. Next, 

we have David Cohen, who has come to the table for 

proprietary students as the alternate.

MR. COHEN: I just, thank you. Look, 

everybody is interested in consumer protection, and I 

agree with that. We want students to have, you know, a 

good experience and to get a fair return on their dollar. 

I think students really like flex plans. I think flex 

plans are a relatively recent innovation in meal plans. 

But I think that allowing students to opt out, which I 

really do believe this would allow, is going to force 

colleges to rethink flex plans. Instead, I think that 

they will go for the swipe plans instead, because 

colleges aren't restaurants, they have to run food plans 

all the time. I was on campus last night, we had five 

students in the dining hall, but sometimes there could be 

a hundred students in the dining hall, so you don't 

really know. But you have to be prepared and so allow 

students to opt out will definitely make colleges rethink 

whether the flex plan is really workable. And so, I think 
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at the end of the day, we're trying to be consumer 

centric. But I think at the end of the day, you're not 

going to achieve that. I think you'll find that colleges 

will say, you know what? We can't afford to take the 

risk, we can't afford to do it at times when there's lack 

of demand, so we're going to implement a swipe plan. And 

that doesn't really serve students very well. So, I think 

that this could really, really hurt that. In terms of 

consumer, you know, sentiment and I agree with it, but 

not every student chooses to live on campus. At our 

campus, if a student doesn't like the meal plan or they 

don't like the housing charges, they move off campus, you 

know, but making them, you know, change the meal plan, I 

really think it's a big mistake. The alternative would 

be, of course, that colleges would just say, look, you 

know, 10% of students are not really using the meal plan. 

We have to make these refunds, but we still have fixed 

costs. So, what happens? It's inflationary. I really 

think it's the Government putting their hand on something 

that will cause prices to go up, and ultimately a 

reduction in the quality of service that students are 

entitled to. And so, I think that, you know, we should 

let the marketplace decide on this. If the students don't 

want the meal plan, they move off campus. It happens all 

the time. But I think that requiring the colleges to make 
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the mandatory meal plan on the flex plan option.

MR. WEATHERS: 30 seconds remain.

MR. COHEN: Thank you. I think we'll 

find that colleges will just move in a different 

direction. And I don't think you'll achieve the 

objectives that you are really seeking. Thank you.

MR. MARTIN: I do want to clarify, you 

know, everybody has opinions about this and all very 

valid. But what the Department is doing here is not 

requiring schools to do anything with their meal plans. I 

mean, we're not, you know, whether a school allows an 

opt-in or opt-out is entirely up to the school. The 

entire function of this regulation, where it's limited 

to, is simply acknowledging that with a flex plan, there 

is cash value, actual cash value is actual cash is on an 

account. That cash if it's inclusive of Title IV funds, 

if it's not used and schools are sweeping it, then they 

are taking back cash which is, as I said before, is 

student money. If schools choose to, as a result of the 

rule not offer that that is their prerogative to do that. 

If they want to give students a chance to opt in or opt 

out of any meal plan they've got, that's also their 

prerogative. I just want to make it clear that the 

Department, irrespective of how anybody feels about this 

proposal, is not dictating to institutions what types of 
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meal plans they're to offer.

MS. JEFFRIES: Okay. Thank you. Next 

up is, Magin Sanchez, civil rights organizations. Who is 

back at the table in place of Carolyn Fast. Magin?

MR. SANCHEZ: Thank you. And 100% 

agree with David's point in terms of, specifically in 

terms of the concern that schools might turn towards 

swipe-only plans and flex dollars. I think that's, again, 

why it's so important to include returning at least the 

cost value of these swipes to students to avoid a 

loophole in that sense, that institutions may take part 

in. But on another note, in terms of the humanitarian, 

you know, the idea of the donations of flex or 

[inaudible] or what have you. I know, you know, 

personally speaking as someone who on both sides of the 

coin in terms of, you know, food banks, in terms of 

someone who during the pandemic, when my parents were 

laid off, had to go to a food bank for food. And about a 

year later, when I was in student council as a vice 

president of student council, I ran a food bank there, I 

oversaw one. I do want to say, on that note, it's a bit, 

you know, from the dignity of the person, a bit difficult 

to hope and pray, right, that someone will be willing to 

give their [inaudible] for you so you're able to receive 

that food or necessity covered. I think the most basic 
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humanitarian thing that we can do is return the money for 

these students, particularly for these low-income 

students, right. You know, it's great, for over 200 

campuses already have some type of swipe donation swipe 

system in place. It's great that institutions do that, 

right. But I think that doesn't solve the problem, right. 

The problem is, you know, these are decent amounts of 

money, right, that these students that go and use- that 

these students could use for basic necessities, and they 

shouldn't be relying on maybe someone donate swipes or 

whatnot.

MS. JEFFRIES: Okay. Thank you. 

Denise.

MS. MORELLI: I just wanted to note to 

everybody, again, in terms of the authority for the 

Department, you know, we're exercising our authority over 

the Title IV funds. And I want to remind everybody that 

in addition to tuition and fees, the students are 

entitled to funds for living expenses. And as Greg 

pointed out, we don't have any dictating on when the 

funds are applied. So, in order to make this 

comprehensive and apply to all students, we want to make 

sure that we were covering that where it is a, you know, 

living expense money. They might be getting money from 

other sources. So, in order to make sure that and not 
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require schools to completely track, this is exactly 

Title IV, and this is the other funds. We wanted to make 

sure it was comprehensive enough so that if the student 

received Title IV aid, that they had the benefit of this 

provision.

MS. JEFFRIES: Okay. Thank you. David?

MR. MUSSER: And just one final point. 

Just following up on what Denise said. You know, one of 

the reasons that the Department is focusing on cash value 

meal plans is that, in our view, there is another method 

that is often viable for schools to obtain cash for 

meals. And that's simply using a credit card or a debit 

card or cash itself. Which in our view reduces the 

potential economic impact to institutions of no longer 

sweeping the funds that are in cash value meal plans. 

Now, that does not quite work. That same logic would not 

necessarily apply to meal plans that rely on vouchers, 

that rely on a certain number of meals per semester, etc. 

It isn't really a 1-to-1 equivalency. So that is part of 

the reason that we continue to focus on cash value meal 

plans and not voucher plans.

MS. JEFFRIES: Thanks, Dave. Zach 

Goodwin?

MR. GOODWIN: Thank you. I'll be 

quick. And as much as I, really support the donation 
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idea, I actually would really support the Department's 

standpoint here in the sense that if you're an 

institution who has a swipe plan, that is not in any way 

to prevent you from donating swipes, and a lot of schools 

do that. It just doesn't have an equivalent cash value. 

And it might be very challenging to get into this realm 

of saying, okay, you bought a plan that was 14 swipes a 

week or whatever it is, let's say, 14, and then you get 

to the end of the semester and there are 12 swipes left 

over and having a cash value of those swipes and giving 

it back to the student because your dining services had 

to make those meals, whether someone came to eat them or 

not. What's a little different with a cash value 

situation is that this is actual cash. The student can 

take often to a number of different places, not just a 

dining hall. That's why it's flexible. So, it puts the 

school in an odd position to be able to do that. But 

those meal plan swipes could certainly still be donated 

to others and frequently are.

MS. JEFFRIES: Okay. Thank you, Zach. 

Seeing no other hands. Greg, are you ready to take a 

temperature check on 668.164 (c)?

MR. MARTIN: Sure.

MS. JEFFRIES: Okay. Do we have a show 

of thumbs on that section, and that Section only 668.164 
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(c), creating a student's ledger account?

MR. MARTIN: I want to make one 

clarification. This is only- we're only doing this as it 

applies to the meal plan, to the Department’s proposal on 

the meal plan. Let's make that clear.

MS. JEFFRIES: Okay. Thank you. Okay. 

Thumbs. Not seeing any thumbs, oops, one thumb down. Dom 

Chase. Anything, outside of what you've already stated or 

some contextual language that you could share and or put 

in the chat that would move you closer?

MR. CHASE: Yeah. Aside from the 

institutional decisions, I think I'm worried about the 

student behavior impacts from this in terms of forgoing 

meals for the duration of the term. I think a compromise 

in the middle ground that helps support the ongoing 

viability of these operations and also achieves a return 

of unused funds to students, would be allowing them to

roll over during the full undergraduate academic career 

and then be returned once upon graduation or separation 

from the institution in another way.

MS. JEFFRIES: Would you- could you 

kindly put that concept in the chat so that it's not lost 

sight of for consideration in between sessions? 

Appreciate that. Alright, Greg, back to you.

MR. MARTIN: Thank you, Cindy, and I 
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want to thank everybody for that good discussion we had 

on this topic of meal plans. Next, I want to take up

books and supplies. So, let's look at the relevant areas 

of 668.164 (c) there. So, I'll wait for that to come back 

on the screen. And again, let's start with (a), a lot to 

discuss here, but we'll just start while we're viewing 

(a) again. An institution may only include costs of books 

and supplies as part of tuition and fees if the 

institution demonstrates there is a compelling health or 

safety reason to do so. And we see here that we continue 

with books and if we go down to romanette 2, again, we're 

talking about allowable charges are, and then in 

romanette 2, the amount incurred by the student for the 

payment period for purchasing books, supplies, and other 

related goods and services provided by the institution 

for which the institution of chains the students or 

parents authorization under 668.165 (b) that remember 

that all of our authorizations are contained in 165, not 

in 164. Provided that for each payment period, the 

institution individually discloses the cost of such 

books, supplies, and other educational related goods and 

services to the student prior to any authorization being 

signed and the student or parent chooses to purchase 

those materials provided by the institution. And (b) the 

institution makes those books and supplies available to 
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students at or below competitive market rates. And so 

that is where we, in consideration of proposals and what 

was said at the last negotiation session, where the 

Department has come back on with respect to books and 

supplies. So, with that, I will open the floor for

discussion.

MS. JEFFRIES: Thanks, Greg. Jillian 

Klein.

MS. KLEIN: Thanks. I think just to 

get started, I have two questions. Just on the drafting. 

One is, can you, be more specific about the cadence of 

the required authorization and the cadence of the 

required disclosure? I see what I think I understand is 

that the disclosure is by payment period, but I don't see 

something specific about the cadence on the 

authorization. So, can you answer that? And then I have a 

second question.

MR. MARTIN: Sure. So, what we have 

here is that- so let's read that again. For each payment 

period, the student- the individual- the institution 

individually discloses the cost of books and supplies to 

the student prior to the institution- prior to 

authorization being signed and the student or parent 

chooses to purchase those materials. So, we'll get into 

the authorization. But the authorization for this would 
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be required with each payment period, because that's when 

the schools, I'm sorry, that's when the institute- the 

students would be opting to purchase those books and 

supplies through the institution.

MS. KLEIN: So, by term it would be 

the disclosure and?

MR. MARTIN: Right. Yes, yes.

MS. KLEIN: I'd say it's not super 

clear in here. So just as a feedback to the drafter. My 

second question is can you talk about- I noticed the 

deletion of the provision that had allowed institutions 

to take advantage of this flexibility if the suppliesbooks or supplies were not available elsewhere. And I 

just am wondering if you can talk about why you removed 

that? And then depending on your answer, I might have a 

comment on that.

MR. MARTIN: Yes. So, in looking at 

that we, you know, we determined that the only exclusion 

here should be for health and safety purposes. That we 

don't- we believe that with the current availability of 

materials, books, etc., you know, via the web, via other 

measures, other means, that it's not really a 

consideration that those supplies are simply not 

available anywhere else. Obviously, the school obtains 

them from a source that that source would- there are 
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sources available for students to do that. It was a 

proposal that we received that we eliminate that 

particular, call it flexibility, and we- our position is 

that we do believe that it would be that materials would 

be available through some other source. Obviously, if the 

student- if a school, you know, our position here is if a 

student- if a school is offering these supplies and it 

really is at the best price available, that students will 

certainly opt to receive it from the school. But, in as 

many instances as possible that there should be the 

option for the student to go elsewhere if the student 

chooses to do that without being compelled by it being 

linked to tuition and fees to have to pay for those books 

and supplies as part of paying for tuition fees.

MS. KLEIN: Yeah. So, I'm happy to 

provide an example from my own institution, Capella, 

which is a competency-based education institution. The 

way that we create our programs is building our courses 

from the competency up. And often that means that it isit does not make sense from our perspective for students 

to buy a full book when we are only pointing potentially 

to like one chapter in that book. And so, I think a reallife example. And by the way, I don't think this is 

specific just to CD institutions, but obviously resonates 

for us, where we try and make it as cost effective for 
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students as possible by taking individual chapters out of 

specific books and bundling them together to provide them 

to students at a cost that's much lower than what it 

would be if the student bought individual- all those like 

six individual books, right? So, it's like the example of 

the eight hot dogs and 12 hot dog buns. Like, it doesn't 

make sense for the student to buy 12 hot dog buns if we 

can provide it to them in a way that is just aggregating 

from the portions of the content that we have used to 

design our CD programs or other programs. So, I don't 

know if that is an example that you all thought through, 

but I think this happens a lot in institutions that are 

building programs, that are really aligned to sort of 

competencies or skills where institutions want to make 

sure that they aren't forcing students- or students 

aren't in a position where they're having to buy 

materials that they don't otherwise need. So, I would 

encourage you to put it back in. I'm happy to share some 

language. I think it belongs under the first part of 

this, where you talk about scuba equipment, and happy to 

provide whatever you need. Thanks.

MR. MARTIN: And I think people always 

go back to the scuba when they go remember from these 

procedures, scuba equipment. Which I've never- I did, you 

know, it's funny, I did try at one time, I'm not a very 
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good I don't feel really comfortable under water, but my 

uncle had it and I went underwater to try to breathe with 

that apparatus. And then they told me that if you don't 

breathe properly with it, if you like, hold your breath. 

It's really bad something could happen to you. So, I just 

forego it. At that point it was no more scuba for me, so 

I never got beyond the pool aspect of scuba equipment. 

Any scuba equipment is dangerous in my hands. So, but to 

the point, yeah, and I want to make it clear that what 

you're- what you're talking about, Jillian, we don'twe're not proposing to disallow. Certainly, schools can 

include these materials if they want to and offer them to 

students. The only difference here is that it can't be 

done, whereas in the current rules, it can be done rather 

automatically unless a student exercises an opt-out. What 

we're doing here is saying you can certainly do that. And 

we encourage schools to offer to students, you know, 

materials, books and supplies that are, you know, the 

best option for students monetarily and educationally. 

It's just that in this case, what we're saying is you 

have to have the students, you know, authorization to do 

that. The student has to opt into that process. We 

believe that if what the school is offering is good and 

at the best price, the students will do that, but that 

they deserve the option to choose to do that and not have 
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it done automatically. And that's really what this rule 

is about.

MS. JEFFRIES: Okay. Thank you. Dave 

Musser, you had your hand up. Now. Okay. Everything's 

covered? Okay, thanks. Zach Goodwin.

MR. GOODWIN: Thank you, Cindy. Moving 

on a little bit to the stipulation that we can no longer 

be including, except for health and safety reasons, the 

cost of books and supplies and tuition and fees. This 

does appear possibly to conflict with the Department's 

Q&A for prison education programs. Do you mind me reading 

something?

MS. JEFFRIES: Go ahead. You have 

three minutes, so.

MR. GOODWIN: Okay. Fortunately, it's 

only a couple of sentences. This is under the [inaudible] 

Q&A number nine. To avoid situations where allowable 

costs are not included in the cost of attendance, schools 

must include books, materials, equipment, and supplies as 

part of institutional charges, and neither provide those 

materials directly to the individual or include the cost 

of books and supplies in the individual's tuition and 

fees. And this was largely, I think, to avoid incurring 

credit balances on behalf of these students. Sorry, that 

was it.
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MS. JEFFRIES: Okay. Alright. Great. 

Thank you. Jason Lorgan.

MR. MUSSER: Sorry. Cindy, could I 

respond to Zach?

MS. JEFFRIES: Sure. I'm sorry. Yeah.

MR. MUSSER: No worries. So, Zach, I 

think that is a good point that we will think about. 

However, the Department's definition for institutional 

charges includes books and supplies that are charged to 

students for which they have no real and reasonable 

opportunity to obtain elsewhere. So, if the school 

charged for books and supplies, and obviously the student 

in these cases does not have an opportunity to retain 

those things elsewhere, or at least in the vast majority 

of cases that I'm familiar with. So, the Q&A would still 

permit the student- the school to do it in that way. It 

would require an authorization by the student, which I do 

think we want to look at. I'm not sure that that was our 

intent. Because it seems a little odd to require them to 

take that extra step for prison education programs, but I 

do appreciate the comment.

MS. JEFFRIES: Thanks, Dave. Alright. 

Now Jason Lorgan.

MR. LORGAN: Thank you. So, again, I'd 

like to start by thanking the Department for taking one 
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of our recommendations to increase disclosure 

requirements. But in talking to other public four-year 

institutions, there seems to be a lot of confusion about 

what some of this language means. So, I'd like to ask a 

few questions about it. So first, you know, typically, 

financial aid students are allowed to charge books and 

supplies to their student account primarily because they 

don't have access to credit cards, as some other students 

may. And so, it's an attempt to even the playing field 

and make sure that everything is equal. So, I wanted to 

ask a question about that. So, can a student still go 

into the bookstore and charge books and supplies to their 

campus account or not? And if they can charge supplies 

because I totally understand the disclosure of individual 

book prices based on a student's schedule. But does that 

require us to disclose the price of every notebook, of 

every pen, of every thumb drive, of every supply that a 

student might choose to purchase? And I'll pause for an 

answer.

MR. MARTIN: So let me address that 

and I'll invite Dave to maybe offer some of his own 

thoughts if he has more. We're not changing that process. 

I mean, you're talking about the very common situation, 

especially, you know, two and four-year institutions, 

both public and private, where there's a bookstore, the 
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school allows a student to go into the bookstore, 

purchase books and supplies, and goes on the students 

account and can Title IV cover that. Yes. That falls 

under general authorizations, which we've had for, I 

think, since 1994, maybe even before that. Where a 

student- you get a general authorization from a student 

to use Title IV funds to pay for charges other than 

tuition and fees, and room and board if it's offered by 

the institution and that particular authorization can be 

maintained throughout the student's entire matriculation 

unless the student chooses to rescind it at some point in 

time. So, we're not changing anything with respect to 

that. Remember, it's different than what we're talking 

about here. In those cases, the students- the 

authorization is not an authorization required except up 

front, but it's every time the student goes to purchase 

the books, the student is taking the- student is choosing 

to go in. Okay, I need this book for biology 101. And to 

use the way it was when I was in school, you actually 

purchased a big book. You go into the store, and I 

purchase that book. That's a positive action on my part 

to do, right? I picked the book, I take it to the 

counter, I charge it. I've given my authorization to 

school that can use Title IV funds to pay for that. We're 

not proposing to change that in any way or add any 
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additional, anything additional there. What's happening 

here is we're talking about programs where currently, you 

know, the institution saying, you know, for example, 

you're taking biology 101 again, to select something that 

was never any good at. But there's a, you know, let's 

just say that the course materials, including any 

electronic book and maybe the homework is also bundled 

into that. Right? So currently it's a charge that when 

you take biology 101, it's part of the tuition fee 

charge, which is not the case in the student walks in to 

buy books. Right. So, it's part of the tuition fee 

charge. And what we're saying now is that the school can 

still do that. They can still offer that bundled package, 

you know, that you get the tuition, the key to the book 

and to the homework. Except the only thing being now is 

that, with these rules, the student would have to 

actually provide their authorization for you to do that. 

So, I think that it's actually two separate things we're 

talking about here. And I don't know. David, do you have 

anything else you want to add about that is a 

clarification or?

MR. MUSSER: I think that covers it. 

The intent here. And you said Greg, you said included 

intuition. It would have to be broken out as a books and 

supplies charge in under this approach. But so long as 
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the school disclosed the amounts of the charges for the 

books and the student agreed to pay that amount, in each 

term, the school could then charge their account 

directly, and the student could obtain the books that 

way. And I agree with Greg about everything that he said 

regarding the bookstore purchases. Essentially, the 

bookstore is providing the student with the charges for 

the books that they're obtaining. And the student is 

making an affirmative choice to purchase the books in 

those cases. So at least, you know, at first glance that 

is fulfilling the spirit of this. I think we were really 

focusing on cases where the school was providing bundles 

or fund- the books directly to the students without that 

interaction with directly with a bookstore and the book 

prices that the student would have in a traditional 

experience.

MR. LORGAN: Okay. Thank you. That's 

helpful. My second question is so and I think I 

understand it better based on the first answer, but in 

terms of individually disclosing the cost of. So that is 

simply the items that you just described that we're going 

to include on the tuition and fee bill. So, things that 

are- that students are going to authorize us. So those 

are the only things we have to disclose. Is that correct?

MR. MARTIN: Yeah. That's correct. To 
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go back to the proposed rule again. For each payment 

period, the institution individually discloses the cost 

of such books, supplies, education related goods and 

services to the student prior to that authorization. 

Let's go back to the point Dave made. There's that 

affirmative, it's not really an authorization, but it's 

implicit when a student goes to the bookstore, I see they 

cost the book, I know what the cost of the book is, I 

choose to buy. Here it's included, currently, schools are 

included in that as part of tuition and fees. We're no 

longer allowing it to be treated that way. It has to be 

broken out. But it can still be- the material can still 

be offered in that manner. Which is to say the school 

just provides it, but because the student is not going to 

a bookstore to affirmatively choose this, you need to 

disclose what those costs are going to be. And that's 

what this is about.

MS. JEFFRIES: Currently, we have 1-2-

3-4-5-6 more hands up on this topic. And then I think, in 

lieu of time, because we have a significant amount of 

this text to go through yet throughout the rest of the 

day, I'd like to do the temperature check at that point. 

So, the last speaker on this would be Scott Dolan. Next 

up though, we have Dom Chase.

MR. CHASE: Thank you. I think it's 
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important to kind of talk about why the language was 

changed previously to allow for these programs. And 

really the primary too was the cost and ensuring that the 

course materials were available on the first day of 

class. And I think prior to that, we have to think about 

what will happen under this type of language. And really 

there will be- the behavior should return to previous 

before this language, which means a lot of students will 

wait until that first week of class or even beyond. Some, 

many, many students on a large scale don't even enroll 

particularly at the community college I represent until 

very close to that first week of class or that first week 

of class. And so very similar to the Affordable Care Act 

in 2010. I'd like to draw a comparison about the 

individual responsibility provision that that ensured the 

large-scale participation in the program. The 

participation is important to drive down the cost for 

each individual. And it's simply the more volume we drive 

through, the per unit cost should go down. But the 

participation is important. And I think I'm highly 

concerned about, previously, many businesses popping up, 

that take advantage of students in these secondary 

markets where they offer certain dollars for course 

materials, perhaps in times of very significant need and 

it's simply buy low, sell high. You mark that up with a 
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significant margin and resell it to someone else. And 

that was a very significant contributing factor to course 

materials exceeding CPI for a very long period of time. 

So, if the intent was about transparency in changing the 

language, which as it was stated in the initial 

documents, I think the challenge with the way it was 

worded now is that some institutions have included this 

as part of tuition, but the opt-out does not result in 

any kind of monetary return to the student when they do. 

There is a process for opting out, but because it is part 

of tuition is zero. And I do think that's extremely 

concerning and not the intent that the Department had 

when they changed this language. But if the goal is 

transparency and for there to be a monetary refund if a 

student opts out, then the alternate proposal of a 

separate discrete fee requirement should achieve those 

objectives, which was proposed and still allow for these 

programs to drive the volume needed to benefit all and 

drive the per unit cost down. Thank you.

MS. JEFFRIES: Thank you, Dom. Barmak 

Nassirian. You are next.

MR. NASSIRIAN: Thank you. A couple of 

comments. First one, on romanette 1, with regard to 

health and safety supplies. Language is fine. The 

regulatory language is fine. It would help in the 
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preamble for the Department to clarify that this cannot 

be like brand specific requirements. It can't be just the 

only health and safety equipment I will accept will be 

the one that I myself sell. There should be pegged to 

specifications as opposed to brands or particular, you 

know, types. So that's one comment. On Jillian's comment 

about institutional attempts to drive the cost of 

textbooks down by selectively incorporating different 

chapters of various books. That's wonderful when it's 

done voluntarily and in the interest of the student. But 

we're not writing regulations for people who want to do 

the right thing voluntarily. We have to be mindful of the 

other possibility, which is institutions that may have an 

interest in maximizing revenues. And to the extent that 

institutions do offer compelling value compared to 

alternatives. You have to, you know, this mindset of in 

loco parentis that somehow these are kindergarten kids 

we're dealing with. These are adults in most cases. They 

make choices for themselves. And we have to respect the 

fact that this is their money and that they defer to that 

judgment. I appreciate the instinct to act in their best 

interest as a benevolent, sort of decision maker. But I 

think the best decision maker is the person whose money 

is being spent, this being the student. So, I think it's 

important to focus on providing value. Dom's comments 
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about secondary markets. The secondary market is de facto 

nonexistent at this point. With the move to digital, 

there is very little secondary market out there. The 

challenge we face with textbooks is the challenge of- we 

don't have consumer price sensitivity driving down costs. 

The faculty adopt the book, they decide what is required. 

The consumer really has a choice of at great risk not 

obtaining the book or looking for other alternatives. And 

the concern with institutions auto billing for this stuff 

is that, you know, one party to this transaction seems to 

hold all the cards. So, I strongly support the 

Department's language. It is the right approach. So, 

hopefully it'll retain the language and hang in there. 

Thank you.

MS. JEFFRIES: Thanks, Barmak. Next is 

Carolyn Fast.

MS. FAST: Yes, I also wanted to

indicate my strong support for the Department's proposal. 

And I just wanted to take a minute to just amplify the 

voice of one particular student who wrote about this in 

an [inaudible] for the Hill publication, which I will 

drop into the chat. This is a student named Katie Wagman 

who's at UCLA, and she talks about the need for an opt-in 

program. And she notes that, if the kinds of options that 

are being offered by schools are actually offering 
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savings to students, then students will certainly opt in 

and you will be able to get the benefit of participation 

and volume, which is important to be able to keep costs 

down. So, I think that student choice is very important 

here. And this is- what the Department has proposed will 

address this problem of students being charged. And in 

some cases, it seems overcharged through these programs 

that do not give them a choice about how they're going to 

get their materials. So, I wanted to offer her- amplify 

her voice and indicate support.

MS. JEFFRIES: Thank you, Carolyn. 

Next Emmett Blaney.

MR. BLANEY: Thanks. I'd also like to 

echo what Carolyn just mentioned with calling back to- I 

sent out a memo last session that had some pretty 

significant or pretty relevant stats for this issue. In 

that, 88% of students engage in cost avoidance strategies 

already. So, following off what Carolyn said, if going 

through an institution is really what is going to save 

students money, then 88% of them would still do it. So, I 

would just like to say that if it truly would save 

students money, we would be sticking with whatever option 

the institution is providing. We know that it's not 

saving students money. It's very clear. I also wanted to 

point out that 42% of publishers who had these contracts 
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with institutions limited how institutions could even 

disclose their partnership to students. So, it's like 

it's the cost. It's that almost half of them are 

preventing students from even knowing that there's a 

partnership between institutions and publishers. That's 

also an issue. So, I just want to respond by providing 

some more stats. And if you'd like to take another look 

at the memos that we sent out last session, I think 

they're pretty illuminating on the actual motivations of 

inclusive access programs.

MS. JEFFRIES: Thank you, Emmett. I 

appreciate it. Next, Jamie Studley.

MS. STUDLEY: I have some operational 

and technical questions. I understand the Department's 

and advocates motivation for making changes, but I'm 

trying to think about how an institution would actually 

do some of these. There's a different definition in 

little- romanette (1)(a) that says books and supplies, 

and then in (2)(a), it says, and other educationally 

related materials or whatever those words are. I'm 

picturing maybe this is slightly old fashioned. Most 

materials that are tailored by the professor instructor, 

are probably electronic. But if the school decides to 

provide at its own copying cost at no extra charge a 

unique package of materials for Barmak's class- 
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philosophy 101 class, which we're all registered for 

here, apparently, and you get a package of Xerox, what's 

the correct word, right, duplicated materials, this 

sounds as though I as a school would not be able to do 

that as part of the tuition charge. I wouldn't be able to 

fold in the production of something that only that 

professor can provide. It's not available anywhere else. 

If the point is making clear that people understand what 

tuition is- what they're really going to have to pay for 

this program, you would think that would serve that 

purpose. They know that they're going to enroll for that 

course, and this is what is covered and this is what is 

being given to them. They may even be told there's no 

other book charge. So, I just want you to think about 

whether that would stifle something that is not intended 

to be covered here. And then on the (2)(b), the 

institution makes those available at or below competitive 

market rates. I'm wondering whether institutions think 

that that would be a lot of work for them to determine, 

given that we have- that there is a requirement 

beforehand that the student has to opt in to purchase 

those if they want to. And that the determination about 

the competitive marketplace may be very hard for the 

institution to do. As those change, people can find 

discounted materials and so forth. I wonder whether 
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that's necessary in an environment in which there is 

disclosure and the student has to authorize whether they 

want to buy them through the institution. Just some 

practical issues.

MR. MARTIN: Okay, I'll try to deal 

with those. And, maybe David might have some comments as 

well. I with respect and, you know, you make a good point 

about using Barmak's social philosophy class, he had me 

with the Hegelian dialectic one last time. I had to go 

back to Google to brush up on that. It had been a long 

time. But, so, yes, there is the, I think you're saying 

is there's always the possibility that he, you know, just 

as a matter of course, maybe he chooses not to use a 

textbook. And he includes all of his assignments, 

whatever, maybe references to articles in something 

which, you know, students, an electronic key or 

something, students have access to that throughout the 

course. I don't think we have any problem with that. If 

it's and again, there's going to be a bit of a I think a 

judgment call there if it's if it truly is being offered 

at no expense, obviously when you pay tuition you for any 

course, you're paying for the instruction, you know, the 

presence of the professor or the facility being used, all 

of those things. And it might be that- I do recall even 

back in the dark ages when I was in school, it certainly 
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wasn't electronic, but sometimes professors did provide 

us with a packet of, you know, materials that they put 

together. Right. This would just be electronic. We're not 

trying to inhibit that. And there could be a fine line 

between what involves offering something essentially at 

no additional cost. And to what extent is that already 

built into tuition fees as opposed to there being 

additional costs. Obviously, when it comes to books and 

actual supplies, it's a little bit of an easier 

delineation than it would be a professor design 

materials. Right. But if it truly is no cost to it, I 

think the Department would be encouraging, you know, that 

type of thing where it would be offered that way. To your 

other point about the below market rates. I take your 

point that it can sometimes be difficult to determine, 

you know, is this below market rate? And again, there's 

some art to that, I suppose. What we're truly- I can tell 

you what we're truly trying to prevent here is markups. 

That is something I think we can really identify. And so,

it would definitely preclude the practice. And it is 

fairly common, I think, Denise Morelli could attest to 

that because she's seen it a lot where schools are 

providing the student with something that is, in fact, 

readily available through other means, and they are 

marking it up at a significant rate for the students. And 
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even though students may have an opt-out, there is, I 

think, for a lot of students when a school offers 

something, there's that, you know, the people in 

authority, which would be the school, are offering this 

and they just automatically accept it, as opposed to the 

school actually having to make certain that it is being 

offered at below market rates. So, I think that's thebut I do accept your point that that might not be always 

a completely scientific determination but that schools 

are obligated to look at that to examine whether they are 

offering it at below market rates. And not marking up 

those products. I invite my colleagues to say anything 

more if they want to at this point.

MS. JEFFRIES: Okay. Thank you. Okay. 

Scott Dolan.

MR. DOLAN: Yeah. Thanks. In our first 

session, I think, the Department shared that its primary 

concern was with the lack of disclosure, and the 

transparency about costs associated with equitable access 

models. And particularly, how disclosure and transparency 

limited students’ ability from being informed about 

whether they were being provided the most affordable 

option. Since session one, there have been numerous 

proposals that have recommended changes to the language 

that would address both the transparency concerns and the 
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disclosure concerns from the Department. So, I think it 

would be helpful to maybe take a step back and hear a 

little bit more about what exactly was lacking from those 

proposals. What is the primary concern here? Is it really 

disclosure and transparency? Or is it something else? Is 

it affordability? Let's have maybe a conversation there. 

Is it markup? Let's have maybe a bit of a conversation

there and talk about language that might address these 

issues rather than, where we are right now, which is 

eliminating the opportunity to offer equitable access 

programs which have, in many cases, proven to drive the 

cost, of course, materials down for students and give 

them access to that material on the first day, which we 

think is essential and have shown, is important to, 

supporting, student success. So, I think, you know, being 

clear about exactly where the concerns are might help 

negotiators better address the concerns that the 

Department might have.

MR. MARTIN: I can say that- in 

response to that, that certainly, transparency is a huge 

concern of ours. But in addition to that, we also havewhen you look at our regs it's obvious that it goes 

beyond that to a matter of student choice. And that's 

really what we're talking about here as well. That the 

equitable access model where it's included in tuition and 
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fees is an automatic, although the opt-out did exist, 

that there's an automatic aspect to that which is just 

simply charged. I will concede the point that in some 

cases, in many cases, maybe, that doing that can serve as 

a model for reducing costs perhaps. But it can also be 

the opposite. I mean, [inaudible] will not- I don't think 

the Department's ever going to see that, I certainly 

won't, that in every case when schools offer these, it's 

always the most altruistic best thing in the interest of 

the students. There are cases where bad actors have used 

this to inflate the cost of materials. This- we may not 

be able to address that entirely, but this proposal does 

grant that choice to students. And we think that in 

giving that in giving students that choice meaning that, 

schools can still offer these equitable access models. 

We're not stepping in and saying you can't do this 

anymore. We're simply saying that in order for you to do 

it no longer is considered tuition and fees. It's an 

additional charge. And you have to get the students to 

opt into that model. That's all we're saying here. So, it 

isn't just a matter, to be clear, it isn't just a matter 

of transparency. Although that's a huge concern. It does 

go beyond that choice.

MR. DOLAN: I guess much like Barmak, 

I agree that we're often dealing with adult consumers 
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here who make informed choices, and I think one of the 

choices they make is to choose an institution. And part 

of that would be factoring in the total cost of 

attendance, which as long as that's the closed on the 

front end, the student is making an informed choice about 

attending an institution that packages these things 

together. And I think even the more recent proposals are 

saying institutions are willing to take extra steps to 

remind students about how that's being charged, what the 

cost of that might be, and even disclosing that on a more

frequent basis. So, to me, it's- we talk a little bit out 

of both sides of our mouths here when we're talking about 

consumers and the power that they have to make informed 

choices. So, I think it's just, you know, I like the 

Department, I, and others here, consumer advocates, other 

constituencies, I would love to address the issue around 

affordability rather than punishing good actors, for 

well-intentioned and well-designed programs that have 

worked to the benefit of students, especially 

disadvantaged students. So some more consideration around 

some of the more recent proposals might be helpful as we 

move forward.

MS. JEFFRIES: Thank you, Scott. And 

the final speaker on this for this morning will be 

Michael Cioce.
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MR. CIOCE: Thank you, Cindy. And, 

thanks, Joe, for letting me speak on this. So, in an 

attempt to not repeat or duplicate stuff that's been 

submitted. I guess my question specifically on (a) for 

each payment period. We tend to treat everything else in 

an academic year, right? So, the FAFSA is good for the 

year. The expectation is that the majority of students 

are coming for the year. So why are we- and again, if a 

student comes fall, winter, spring, summer, those are 

theoretically four separate payment periods. So why are 

we deviating into payment period as opposed to some sort 

of academic year? That's question one. Question two, 

there's particularly in the two-year sector and I'll 

speak for my own, they're students that don't do their 

FAFSA until August 29th and let alone, ever respond to an 

email during sort of, you know, critical timelines. So 

that's another sort of reason, just from a population 

perspective, that multiple opt-ins and multiple opt-outs, 

I think, to the last comment on the transparency. No 

one's arguing and anything that I've put my name to is 

opposed to that. But it's something to think about 

because there's staffs downstream that have to be the 

ones to build this into all of the timelines. But then 

three, or my third question is on (b), institution makes 

those books or supplies available to all students at 
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below competitive market rates. I guess as defined by who 

and where, right? So where are we pointing back to as far 

as this is the market rate? Because lists can shift, 

pricing can be increased. I mean, if you try to buy a 

ticket for a Taylor Swift concert you can see that 

there's surge pricing. If you use Uber, there's surge 

pricing. So, I don't know who's going to be the keeper of 

pricing when it comes to what the definition of 

competitive means. I think the bundling comment is 

definitely that's where things get shady, right? But 

currently we listed out, and whether it's through your 

bookstore partner or through your ERP where students 

register, there's myriad ways for this stuff to be 

posted, I guess, in concept, but I'm curious as to where 

the competitive sort of chalkboard is going to be housed. 

Thank you.

MR. MARTIN: I'll try to- I see Dave 

has his hand up. I'll make a- I'll say a few comments and 

turn it over to him. First of all, the payment period 

aspect of this has to do with the fact that- has to do 

with the way in which these materials are generally being 

provided. So, if we're talking about a course which is in 

most cases going to be over the course of a semester, a 

term, a trimester, a quarter, right. So, it's the- that's 

the payment period aspect of it. So that if I'm taking, 
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you know, use the biology example again, 101 this 

semester and the materials being offered by the school as 

part of a bundle, you'd have to obtain my authorization 

to charge me for that course. And then come spring 

semester, I might be taking Chemistry 101, and it could 

be a similar situation. So that's why the per payment 

period aspect of this and at traditional schools, the 

payment period conforms to the terms. The other question 

about the practices of students getting the materials to 

students and some students not applying until later. I 

admit that often is the case. I can see the impetus to 

want to make certain students have all this material. But 

again, we see the necessity to give the students choice 

as an overriding factor there. And, the last question, I 

forgot what it was. Could you reiterate that just 

briefly, just to recap that?

MR. MUSSER: Greg, I think it was 

about.

MR. MARTIN: Thanks, Dave. Go ahead.

MR. MUSSER: Who is responsible for 

performing the analysis of market rates and sort of where 

is that expected to reside? And actually, if you want 

Greg, I can take it a little bit on that point.

MR. MARTIN: Yeah. Go ahead and 

address that.
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MR. MUSSER: Well, I want to addressfirst, I want to address that which actually I think is 

an extremely good point, especially as it pertains to one 

of the questions, I noticed in the chat about the 

Department's data on any potential compliance violations 

or other concerns that we have, about the current 

practices. When you talk about the evaluation of market 

rates, the Department has found that that is an extremely 

difficult provision to enforce. For some reasons that I 

think the negotiator was alluding to, it's difficult for 

the Department to point at an analysis and say this is a 

flawed analysis because X, Y, and Z. It could happen if 

the Department, state, or a student or a group was able 

to show that the school was sort of systematically 

charging more for the books and supplies that it was 

providing through tuition and fees, than it was for the 

books in and of themselves. But not only does the 

Department currently not have the information about what 

proportion of tuition that the tuition and fees actually 

comprise, but we also don't have a clear sense of what 

steps the school was actually taking in many cases. Even 

the most basic steps, the school could point to that and 

say, we did a market analysis, and the Department would 

be hard pressed to say this is inadequate because X, Y, 

or Z, given the difficulty and the insight that we don't 
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have into exactly how all of those things came together. 

So, I think when you talk about the market analysis, 

there's always going to be some discretion provided to 

schools when we talk about a market analysis, regarding 

what they do and how they do it. It would be near 

impossible for the Department to go in and actually say 

this market analysis was bad because you didn't do X, Y, 

or Z unless there was evidence that the full market 

analysis was overcharging students systematically and by 

probably by a significant amount. So that's really what 

the Department would be looking for if we were to find 

that a school had violated the provision under the 

proposed regulatory language here. And I would also say, 

we have noticed that some schools don't comply with the 

requirement for providing funds back to a student when 

they opt out. And that was something that one of the 

other negotiators noted earlier is that some schools are 

not doing that. The Department, as far as I know, doesn't 

have audit findings on this point because I don't know 

that auditors are looking closely for this. But we have 

gotten questions about it. We have answered schools that 

this is something that they need to do. We believe it is 

a point of confusion at many institutions. So hopefully 

that goes at least some way toward answering your 

question.
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MS. JEFFRIES: Great. Thank you, Dave. 

I appreciate it. I appreciate you all on this robust 

discussion on this Section. I think we'll go ahead and 

take the temperature check now. And then a couple closing 

remarks before lunch. So, I do want to note that Erika 

Linden has been able to join us now. And so, she is back 

at the table as primary. So welcome, Erika. So, let's go 

ahead and see a show of thumbs on the language in 668.164 

on books and supplies. Bear with me here a minute. So,

I'm showing a number of thumbs down. I'm showing Jason 

Lorgan, Jo Blondin, Jillian Klein, Dom Chase, and Erika 

Linden. Did I miss anyone on that?

MR. ROBERTS: I have DC as having his 

thumb down as well.

MS. JEFFRIES: Okay. His kind of 

blends in with this background. It gets in the trees I 

can't see it very well. Thank you for pointing that out. 

Okay. Alright. So, there were multiple people that have 

indicated dissent. Hopefully you've all had a chance to 

be clear on what your concerns are. And please put any 

contextual ideas, thoughts, proposals in the chat that 

would help you move towards consensus that hasn't already 

been stated during this discussion. Okay? Greg, you got 

something? Oh, I thought you were moving closer.

MR. MARTIN: No, no. I'm fine. I'm 
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just adjusting myself here.

MS. JEFFRIES: Okay, great. So, one 

announcement before we break for lunch is that there is a 

different link to sign in for the public viewing session 

this afternoon. Different than what was used this 

morning. So, we encourage the people who are utilizing 

the public viewing site to please go to the Department's 

website unless you've already received the link for this 

afternoon and make sure that you obtain that link. 

Because this one from this morning, it's my 

understanding, will no longer work. So, you need to log 

in on the new one. With that, we'll go ahead and break 

for lunch. We ask that you be back maybe about ten 

minutes before one so we can start promptly at one, 

because you have a significant amount of this issue paper 

to go through yet this afternoon. Okay? Have a great 

lunch.

 
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Zoom Chat Transcript 

Program Integrity and Institutional Quality- Session 2, Day 1, Morning, February 5, 2024 

*Chat was copied as presented, as a result minor typos or grammatical errors may be present. 

From P Jamie Studley, Institutional Accreditors to Everyone:

Where the Department has made changes in this round it would be very helpful for it to 

explain its reasoning for substantive changes made in this round (not just to dive into the 

new/yellow) language.

From P - Carolyn Fast, Civil Rights/Consumer to Everyone: 

Magin Sanchez, Civil Rights/Consumer, is going to be joining the conversation to comment.

From P, Jason Lorgan, Public 4-year to Everyone:

I agree with Zack. As a strategy to address basic needs, campuses do allow students to 

donate food funds to others and hopefully this can be preserved

From P, Jillian Klein, Proprietary Instit to Everyone:

My alternate, David Cohen, will come to the table to speak on this topic.

From P - Carolyn Fast, Civil Rights/Consumer to Everyone:

Magin Sanchez, Civil Rights/Consumer is returning to the conversation to comment.

From P, Jillian Klein, Proprietary Instit to Everyone:

Just want to emphasize again that Greg's response to David's comments was "if it includes 

Title IV funds," which is not what this language currently says.

From A, Emmett Blaney, Students/Borrowers to Everyone:

I agree with Magin. To avoid the loophole of schools switching to meal swipes plans to 

avoid returning students’ money, the proposal should apply to swipe plans as well.

From A, Sophie Laing, Legal Aid to Everyone:

Seconding Magin's point about expanding this swipes too, so that low income students can 

get their money back and use as they need

From P - Carolyn Fast, Civil Rights/Consumer to Everyone:

 Also agree with Magin's point about expanding this to swipes too.

From A, Emmett Blaney, Students/Borrowers to Everyone:

Replying to "Just want to emphasi..."

 

I believe this is because it a a sub-bullet under (c) (1) which specifies T IV. Someone else let 

me know if that’s incorrect!

From P, Jillian Klein, Proprietary Instit to Everyone:

Replying to "Just want to emphasi..."
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It specifies that the student is Title IV eligible, it definitely does not specify that the student 

is using Title IV to pay for his/her meal plan.

From A, Sophie Laing, Legal Aid to Everyone:

Replying to "Seconding Magin's po..."

 

*to swipes too

From A-Alyssa Dobson, 4yr Public to Everyone:

Agree strongly with Zack Goodwin's comments on swipes.

From (P) Barmak Nassirian, Veterans & Mil. to Everyone:

+1 on Magin and Emmett's points. The requirement should apply to swipe balances as well. 

Schools should not rely on charging students for services they don't receive to sustain their 

operations. Drop-out rates are known and calculable.

From A, Scott Dolan, Private Nonprofit IHEs to Everyone:

agreed with Zack here about the overhead associated with running food service and the 

difficulty of estimated cost per swipe

From P - Laura Rasar King, Specailzed Accreditation to Everyone:

I agree with Dom. I am concerned that students will not eat to get the money back. 

Unintended consequences.

From (A) Dom Chase - Business Officers to Everyone:

Institutions would be required to rollover any remaining funds to subsequent terms or 

years, returning any remaining funds when a student leaves undergraduate studies at an 

institution, either upon graduation or earlier if a student leaves an institution for any reason prior 

to graduation.

From (A) Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Agreed on the lack of clarity in terms of the frequency of authorization required for 

institutionally-provided books and fees. I was going to ask the same question Jillian posed.

From P - Laura Rasar King, Specailzed Accreditation to Everyone:

I agree with Dom. This language will mean that students will not have the resources on the 

first day of class. Some will not purchase books and supplies at all. This leads to challenges with 

student outcomes.

From P. Jo Blondin, Community Colleges to Everyone:

Reacted to "I agree with Dom. ..." with ���

From A, Scott Dolan, Private Nonprofit IHEs to Everyone:

Reacted to "I agree with Dom. Th..." with ���

From (A) Zack Goodwin (he/him), Financial Aid Administrators to Everyone:
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I think it's important to remember that for students who will have a credit balance (the 

definition of which is proposed to change) schools will still have to provide a means for obtaining 

books and supplies by day 7 of the payment period. However, I acknowledge this doesn't cover 

everyone, such as those who will not have a credit balance.

From P, Jason Lorgan, Public 4-year to Everyone:

Agree with Dom. Participation (having access to textbooks immediately) is the goal of opt 

out programs. This is similar to employers realizing how important retirement savings is for their 

employees and auto enrolling employees in their 401k or other retirement programs, with the 

ability to opt-out. Institutions want to encourage immediate access to content, and that is why we 

choose that as the default. The ability to opt out still gives students agency. Opting out is allowed 

at most institutions through the add/drop period, giving plenty of time to make their decision. 

From P, Jillian Klein, Proprietary Instit to Everyone:

Barmak, appreciate your comment but my question is also just an operational one, which 

his how exactly is a school supposed to show that a compilation is below market value when 

literally there is no place for the student to actually buy it. I'm struggling with even how that works 

in the current proposal.

From P - Carolyn Fast, Civil Rights/Consumer to Everyone:

Here is a link to the students' publication: https://thehill.com/opinion/education/4420447-

biden-can-limit-colleges-scheme-to-tack-textbook-costs-onto-tuition/

From P. Jo Blondin, Community Colleges to Everyone:

Michael Cioce, Community Colleges' Alternate, has a comment.

From P, Jillian Klein, Proprietary Instit to Everyone:

Jamie's Xerox example is similar/the same as my chapter example - these items literally 

cannot be purchased anywhere.

From (A) Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Reacted to "Jamie's Xerox exampl..." with ���

From A, Scott Dolan, Private Nonprofit IHEs to Everyone:

Reacted to "Jamie's Xerox exampl..." with ���

From P, Jason Lorgan, Public 4-year to Everyone:

Reacted to "Jamie's Xerox exampl..." with ���

From (A) Dom Chase - Business Officers to Everyone: 

Does the Department have data to support/show noncompliance and abuse of the current 

rules that can be shared?

From P Jamie Studley, Institutional Accreditors to Everyone:

My example is that the school provides duplicated pages in a printed package and the cost 

of that duplication was incorporated within overall tuition/instit operating costs. Wd the reg 

prohibit that?
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From A, Emmett Blaney, Students/Borrowers to Everyone:

Publishers manipulate the market rate.

From P Jamie Studley, Institutional Accreditors to Everyone:

and as to the reqt of market rate research-- would the school be in jeopardy of violating 

federal rules if someone found the materials available somewhere the school had missed at a lower 

price? 

From (P) Barmak Nassirian, Veterans & Mil. to Everyone:

I think Jamie's (and Jillian's) point about (1)(i)(A) can be addressed by clarifying that 

institutions should be able to incorporate the cost of books and supplies into tuition, but that 

specific books and supplies fees may not be auto-billed to students unless there is a compelling 

health or safety reason.

From (A) Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Reacted to "I think Jamie's (and..." with ���

From A, Emmett Blaney, Students/Borrowers to Everyone:

Again, bumping the second memo we sent during the first session. It cites data that shows 

that equitable savings programs do NOT save students money. And if it does save money, then we 

will all opt in.

From A, Scott Dolan, Private Nonprofit IHEs to Everyone:

i am stepping aside to allow my primary negotiator, Erika Linden, to step to the table

From P, Jillian Klein, Proprietary Instit to Everyone:

Reacted to "I think Jamie's (and..." with ���

From A, Scott Dolan, Private Nonprofit IHEs to Everyone:

apologies, i will stay on until the temperature check

From A, Emmett Blaney, Students/Borrowers to Everyone:

91% of schools do not disclose the COA accurately anyways.

From A, Emmett Blaney, Students/Borrowers to Everyone:

https://www.gao.gov/blog/what-financial-aid-offers-dont-tell-you-about-cost-college 

From (P) Barmak Nassirian, Veterans & Mil. to Everyone:

Disclosures are no substitute for meaningful guardrails against price-gouging by bad actors.

From A, Emmett Blaney, Students/Borrowers to Everyone:

Reacted to "Disclosures are no s..." with ���

From P - Carolyn Fast, Civil Rights/Consumer to Everyone:

Reacted to "Disclosures are no s..." with ���
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From A, Magin Sanchez, Civil Rights/Consumer to Everyone:

Reacted to "Disclosures are no s..." with ���

From A, Sophie Laing, Legal Aid to Everyone:

Reacted to "Disclosures are no s..." with ���

From Michael Cioce, 2 Year Colleges (A) to Everyone:

Reacted to "Disclosures are no s..." with ���

From Michael Cioce, 2 Year Colleges (A) to Everyone:

Reacted to "91% of schools do no..." with ���