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April 17, 2009

Honorable Joseph R. Biden, Jr.
President of the Senate
United States Senate
Washington, DC 20510

Dear Mr. President:

I am pleased to submit for your consideration the enclosed  legislative proposal, which would limit the application of the requirement to  delay the effective date of certain student aid regulations under Title IV of  the Higher Education Act of 1965 (20 U.S.C. 1001 et seq., the HEA)  to only those regulations that affect the calculation of grant, loan, or work  assistance under those programs.  I am  sending an identical letter to the Speaker of  the House of Representatives.

Currently, section 482(c) of the HEA (20 U.S.C. 1089(c)) provides  that regulations implementing the student aid programs under Title IV of the  HEA that are published on or before November 1 of a given year do not take  effect until July 1 of the next year—a delay of at least eight months after  promulgation.  If student aid regulations  are published after November 1 of a given year, section 482(c) provides that  the regulations do not take effect until July 1 of the second year after that  year—a delay of up to nearly 20 months after promulgation.

In marked contrast, the Administrative Procedure Act (APA)****requirements  that generally apply to government agencies provide that final regulations  normally take effect 30 days after they are promulgated, unless the agency  promulgating the regulations specifies a different effective date—usually a  later date, but it can be an earlier date in limited circumstances (5 U.S.C.  553(d)).

The enclosed amendment would limit the application of  section 482(c) of the HEA to regulations that affect the calculation of grant,  loan, or work assistance under the student aid programs.  Section 482(a) of the HEA sets out a  "Master Calendar" of deadlines by which the Secretary must perform  certain actions relating to the calculation of student aid, such as the  development of forms and the allocation of campus-based and Federal Pell Grant  funds, with a number of procedural steps assigned specific deadlines.  The delay in the effective date of  regulations in section 482(c) is logically related to the Master Calendar  requirements in section 482(a), and provides institutions of higher education  with sufficient advance notice of the rules that will apply to student aid  calculations for the upcoming award year, which begins on July 1.

However, the delayed effective date requirement also  constrains the Secretary in regulating the numerous other aspects of the  student aid programs for which more prompt action is needed, such as loan  collection and guaranty procedures, recognition of accrediting agencies,  institutional eligibility and certification, and compliance matters.  For  example, in 2007, delays in regulatory changes for the Federal Family Education  Loan Program relating to prohibited inducements and preferred lender lists  prevented the timely implementation of protections for students from improper  arrangements between lenders and schools, and of benefits to students from  receiving appropriate advice about borrowing.  There is no sound public policy justification  that warranted that delay, or the excessive delay that section 482(c) now causes  in the implementation of many Title IV regulations.

The delayed effective date requirement also prevents the  timely implementation of many substantive legislative changes to the student  aid programs that are enacted by Congress to carry out its intent on key policy  objectives.  In a recent example, the  Higher Education Opportunity Act (HEOA, P.L. 110-315) was signed into law on  August 14, 2008.  Without the enclosed  amendment, virtually all of the final regulations that will implement the HEOA  student aid program changes, which are currently being developed through the  required negotiated rulemaking process, will not take effect until July 1,  2010—nearly two years later.

In addition to delaying regulatory action, the delayed  effective date requirement unduly compresses the rulemaking process, and  consequently the opportunity for public comment.  The APA requires agencies to solicit public  comments on proposed regulations.  Due to  the Master Calendar requirements, the Department of Education normally seeks  comment for only 30 days, instead of the customary 60-day comment period.

While the legislative proposal would allow the Secretary to  act more quickly, it would also generally afford a greater opportunity to  provide additional time to carry out the APA’s notice-and-comment  procedures.  This in turn would allow for  a thorough analysis of regulatory options, meaningful public comments, and a  careful assessment and response to those comments.  By eliminating a constraint on****stakeholder  involvement, the proposal would help the Department advance the  Administration’s efforts to promote greater transparency, agency  accountability, and public engagement.

The enclosed amendment would enable the Secretary to provide  both a more rapid regulatory response and generally longer public comment  periods, consistent with the APA, on a variety of student aid program issues,  while preserving the existing regulatory schedule as it relates to the Master  Calendar and the calculation of student aid under that schedule.  Like other agencies, the Department would  retain the discretion to adopt a later effective date for regulations that  would require, or benefit from, a period of more than 30 days for  implementation.

The amendment would foster greater accountability in the student  aid programs through the timely application of needed regulatory revisions and  the opportunity for****more robust public involvement in the rulemaking  process, and enable the Secretary to implement key legislative changes more  quickly.  I urge prompt and favorable  consideration of the amendment.



| | Sincerely, 
| | -----------
| | /s/        
| | Arne Duncan

Enclosure

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Enclosure



DELAY OF EFFECTIVE DATE OF STUDENT AID REGULATIONS
  SEC.  ___.  (a)   LIMITATION OF DELAY TO REGULATIONS AFFECTING CALCULATION OF STUDENT  AID.—Section 482(c) of the Higher Education Act of 1965 (20 U.S.C. 1089(c)) is  amended—

(1)  in paragraph (1), by striking "the  programs under this title" and inserting "the calculation of grant,  loan, or work assistance to students or parents under the student aid programs  authorized by this title"; and

(2)  in paragraph (2)(A), by striking "the  programs under this title" and inserting "the calculation of grant,  loan, or work assistance to students or parents under the student aid programs  authorized by this title".

(b)  EFFECTIVE DATE.—The amendments made by  subsection (a) shall be effective on enactment.

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