Negotiated Rulemaking Program Integrity and Institutional Quality – 3/6/24

1

 

 

 

 

 DEPARTMENT OF EDUCATION

 OFFICE OF POSTSECONDARY EDUCATION

 NEGOTIATED RULEMAKING PROGRAM INTEGRITY 

AND INSTITUTIONAL QUALITY 

 SESSION 3, DAY 3, MORNING

MARCH 6, 2024

On the 6th day of March, 2024, the following 

meeting was held virtually, from 10:00 a.m. to 12:00 

p.m.
2

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

P R O C E E D I N G S

MR. ROBERTS: Good morning, everyone, 

and welcome back to session three, day three of this 2024 

Negotiated Rulemaking on Program Integrity and 

Institutional Quality hosted by the Department. My name 

is Brady Roberts with FMCS. As always, we have a lot to 

get to today. So we'll jump right into a brief roll call. 

So for our non-Federal negotiators, representing business 

officers from institutions of higher education, we are 

joined by Joe Weglarz.

MR. WEGLARZ: Morning.

MR. ROBERTS: Morning, Joe. And his 

alternate Dom Chase.

MR. CHASE: Present. Good morning.

MR. ROBERTS: Morning, Dom. 

Representing civil rights organizations and consumer 

advocates, we are joined by Carolyn Fast.

MS. FAST: Good morning.

MR. ROBERTS: Morning, Carolyn. And 

her alternate, Magin Sanchez.

MR. SANCHEZ: Hello.

MR. ROBERTS: Good morning. 

Representing financial aid administrators, we are joined 

by JoEllen Price.

MS. PRICE: Good morning.
3

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

MR. ROBERTS: Good morning, JoEllen. 

And her alternate, Zack Goodwin.

MR. GOODWIN: Good morning, everyone.

MR. ROBERTS: Representing HBCUs, 

TCUs, and MSIs, we are joined by Dr. Charles Price or 

Prince. Sorry, sorry DC.

MR. SANDS: He's on his way.

MR. ROBERTS: Okay, but we are also in 

the meantime, joined by his alternate, D'Angelo Sands.

MR. SANDS: Good morning.

MR. ROBERTS: Morning, D'Angelo. 

Representing institutional accrediting agencies 

recognized by the Secretary, we are joined by Jamie 

Studley.

MS. STUDLEY: Good morning and Michale 

might be a little late.

MR. ROBERTS: Okay. And we'll announce 

it once Michale McComas the alternate is able to join us. 

Representing legal assistance organizations, we are 

joined by Robyn Smith.

MS. R. SMITH: Hello.

MR. ROBERTS: Oh. Morning, Robyn. And 

her alternate, Sophie Laing.

MS. LAING: Good morning.

MR. ROBERTS: Morning, Sophie. 
4

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

Representing private, nonprofit institutions of higher 

education, we are joined by Erika Linden.

MS. LINDEN: Good morning, all.

MR. ROBERTS: Morning, Erika. And for 

alternate, Scott Dolan.

MR. DOLAN: Good morning, everybody.

MR. ROBERTS: Hey, Scott. Morning, 

Scott. Representing programmatic accrediting agencies 

recognized by the Secretary to include state agencies 

recognized for the approval of nurse education, we are 

joined by Dr. Laura Rasar King.

DR. KING: Good morning.

MR. ROBERTS: Good morning, Laura. And 

her alternate, Amy Ackerson.

MS. ACKERSON: Good morning.

MR. ROBERTS: Good morning. 

Representing proprietary institutions of higher 

education, we are joined by Jillian Klein.

MS. KLEIN: Morning.

MR. ROBERTS: Morning, Jillian. And 

her alternate, David Cohen.

MR. COHEN: Good morning.

MR. ROBERTS: Good morning, David. 

Representing public four-year institutions of higher 

education, we are joined by Jason Lorgan.
5

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

MR. LORGAN: Good morning.

MR. ROBERTS: Morning, Jason. And his 

alternate, Alyssa Dobson.

MS. DOBSON: Good morning, everyone.

MR. ROBERTS: Representing public twoyear institutions of higher education, we are joined by 

Jo Blondin.

MS. BLONDIN: Hi there.

MR. ROBERTS: Hi, Jo. And her 

alternate, Michael Cioce.

MR. CIOCE: Good morning.

MR. ROBERTS: Good morning. Joining us 

from the beach today representing state attorneys 

general, we are joined by Diana Hooley.

MS. HOOLEY: Good morning.

MR. ROBERTS: Good morning. And her 

alternate position is vacant right now for state AGs. 

Representing state officials, including state higher 

education executive officers, state authorizing agencies, 

and state regulators of institutions of higher education, 

we are joined by John Ware.

MR. WARE: Good morning.

MR. ROBERTS: Good morning. And his 

alternate, Rob Anderson.

MR. ANDERSON: Good morning.
6

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

MR. ROBERTS: Good morning, Rob. 

Representing students or borrowers, including currently 

enrolled borrowers or groups representing them, we are 

joined by Jesse Morales. Maybe still waiting to join us, 

but we are joined by her alternate, Emmett Blaney.

MR. BLANEY: Morning.

MR. ROBERTS: Morning, Emmett. Last 

but not least of our non-Federal negotiators, we are 

joined by the constituency group of U.S. military service 

members, veterans or groups representing them, 

represented primarily by Barmak Nassirian.

MR. NASSIRIAN: Good morning.

MR. ROBERTS: Good morning, Barmak. 

And his alternate, Ashlynne Haycock-Lohmann.

MS. HAYCOCK-LOHMANN: Good morning.

MR. ROBERTS: Morning. Negotiating on 

behalf of the Department, we are joined by Greg Martin.

MR. MARTIN: Morning.

MR. ROBERTS: Who is being supported 

by, I'm trying to see all the names on the screen right 

now. Denise Morelli, Donna Mangold, Herman Bounds, and 

Dave Musser.

MS. MORELLI: Good morning.

MS. MANGOLD: Good morning.

MR. ROBERTS: Morning to all of you. 
7

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

Also joining me from FMCS, we have Cindy Jeffries, 

Krystil Smith, and Kevin Wagner. Alrighty. I believe that 

the plan is to kick off where we left off yesterday, 

which is on cash management. But, Greg, any old business 

to update the committee on?

MR. MARTIN: Oh, no. We're going to 

start- we'll start with cash management this morning.

MR. ROBERTS: Great. I think we can 

pick up where we left off in the document. I know there 

were also, I think, three hands that were left raised 

yesterday. But you'll have to remember me the order in 

which they were. I think it was Scott, Jason, and maybe 

one other. Okay, great.

MR. MARTIN: So let's pull up thelet's go back to that part of the- I believe we were 

talking about crediting students' accounts, and we were 

talking about books and supplies, if I'm not mistaken, 

that's where we were. And so let's go back to that 164 

(c). We'll wait till we get that up on the screen before 

we take the questions because I believe the questions are 

in reference to that. There we go. Thank you, Vanessa. 

And I think with that language up there, Brady, you can 

take the questions.

MR. ROBERTS: Great. I guess we'll go 

right to you, Jason.
8

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

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

like to start by addressing many of the comments that we 

heard yesterday about if these programs are so great 

students will just opt-in. So I wanted to provide some 

context as to why institutions are so interested in optout. So my institution has experience with both an opt-in 

program and an opt-out program. We were opt-in prior to 

2020 and we've been opt-out since 2020. So prior to 2020, 

when we were opt-in, we did a large survey of our 

students, and students self-reported that only 22% had 

access to all of their required content. So it wasn't 

that in an opt-in model, it's not that they're choosing 

to go elsewhere, it's they're choosing to do without the 

material altogether. So that's what we're trying to solve 

for. In an opt-in model, we have found that students are 

not participating. The institution feels like that is the 

wrong decision for a student to make. And so we're trying 

to make the default that students have access to content. 

So since we went to an opt-out model, we've gone from 22% 

of students having access to all of their required 

content to 86% of students having all of their required 

content. So that difference is extremely dramatic. It's 

not theoretical. It's based on real experience at UC 

Davis. And so that was my first comment. And then I have 

a couple of questions for the Department. So my first 
9

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

question is, during the last session, a group of us 

negotiators, I believe it was nine of us, submitted 

alternate language to the Department that the Department

had stated that its primary concerns were transparency 

and disclosure. So we tried to, in good faith, beef up 

the transparency and disclosure requirements. And none of 

our recommendations were taken. So I'm wondering if the 

Department can explain why that's the case.

MR. MARTIN: Yeah. Well, transparency 

disclosure are certainly areas that we're interested in. 

Increased transparency and disclosure still doesn't get 

to the issue of student choice for disposition of their 

funds- of their money. So we believe that the current 

language does give students the opportunity to, you know, 

the real opportunity to seek those books or supplies or 

kits, whatever materials on the open market outside of 

what schools are providing, While I think that many or 

most schools are doing this in earnest there's also the 

potential for and we've seen that argued on the other 

side as well that both in public comment and comments 

from negotiators, that the current regulations do allow 

for schools to shall we say, act in ways that aren't 

necessarily in the best interests of students with 

arrangements, with publishers that are financially 

advantageous to institutions or financially advantageous 
10

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

to instructors. I'm not saying that's the motivation for 

all or even most, but it remains a possibility that is 

always there. And allowing students the opportunity to 

just say that they're going to go elsewhere as the 

default position, I think is the best protection for 

students. And again, if they want to take what the 

institution is offering, they've got the opportunity to 

do that. I'm not entirely unsympathetic to the point of 

view that you expressed that where there's an opt-out, 

the default position is the student has the materials I 

understand the desire to get students their materials. 

It's obviously best if students have what they need. But 

we still believe that should be a decision left to 

students.

MR. LORGAN: Okay, thank you. And then 

my next question is so the Department explained in the 

January and February sessions and Gregory reiterated

yesterday, that its proposals do not prevent schools from 

offering affordable access programs. So many schools, 

after years of planning, are in the middle of deploying 

or scaling up existing access programs for this summer 

and the next academic year. Is there any reason the 

Department can see why an institution should stop 

negotiating lower prices with publishers for their 

students to improve access for this summer in the coming 
11

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

year?

MR. MARTIN: No, I don't think that- I 

don't believe there's any reason why institutions should 

stop negotiating for lower prices. But I will say this 

much if a publisher is shaking down an institution to say 

that, you know, if you don't have this particular opt-in, 

opt-out- if you don't go opt-out, then you know, we're 

not going to give you that price. I find that to be 

somewhat disingenuous on the part of those offering 

materials. So, I mean if the position is that, well, if 

opt-out goes away and we move to this model that they're 

going to give- they're not going to give you a more 

preferred pricing structure. Then I view that as being on 

the publishers, not the Department. So we would certainly 

encourage and we absolutely are encouraging institutions 

to negotiate the lowest price with publishers and for 

publishers to offer the lowest price that they can 

without reference to whether there is opt-in or opt-out.

MR. LORGAN: Okay, thank you.

MR. ROBERTS: Thank you. Just very 

briefly, we have alternates Scott, Zack, and Sophie 

joining us at the table for this issue. And I see Scott's 

hand up next. So go ahead, Scott.

MR. GOODWIN: Well, I think Jason laid 

out some of my concerns around, you know, some good faith 
12

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

negotiations that we've entered into non-negotiators 

across multiple institutions trying to address the 

original concerns, which were around transparency and 

disclosure. We went even further to ensure that we could 

certify affordability and ensure that students would get 

tuition recovery if they chose. Opted out, made a choice 

to not participate in these programs. So I guess one 

quick question is opt-out not a choice that students 

have? Is that not a consumer choice as well? And are we 

clear that this is the main issue that we're talking 

about consumer choice, not transparency and disclosure, 

but consumer choice?

MR. MARTIN: All of those are, you 

know, I'm not going to say transparency and disclosure 

are not concerns of ours. They certainly are. They always 

are. But the student choice aspect is like yes, obviously 

opt-out is a choice but with opt-out, the default 

position is that you pay through tuition and fees. And 

with this model, students make a conscious decision to 

say, we want to take what the school is, you know, the 

exclusive access to schools offering or we choose to go 

purchase those materials elsewhere. So, I think it's 

clear that the greater amount- I'm not saying the opt-out 

is no choice. That does present a choice, but the model 

we have here is that the default position is the student 
13

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

is determining what he or she wants to do with their 

money. If the student wants to purchase from the school. 

They can do that. We're not prohibiting inclusive access 

models. We might be making it different. We might be 

making it such that it's not quite the same way you're 

doing it now, or as easy as you'd like it to be. But we 

feel this is a student protection issue. So it's 

necessary to go in that direction.

MR. DOLAN: I understand. I would like 

to actually see more of the evidence. We've now 

referenced public commenters providing evidence of- and 

what I've heard as publishers shaking down faculty or 

institutions in cahoots with publishers.

MR. MARTIN: The words you're using, I 

did not use in cahoots. I did not say that institutions 

were doing anything. I simply said that the possibility 

exists with the current model for that to happen. When I 

referenced public comment, I said that just as all of you 

on one side are making comments about how this will be 

disadvantageous to students, there are comments on the 

other side as well about the fact that it will be 

advantageous to students. So I'm not referencing evidence 

in that regard. So I just want to clarify my position.

MR. DOLAN: And none of us on the 

institutional higher Ed side have resorted to name-
14

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

calling or questioning the integrity of the people who 

are trying to move forward with models that are in 

support of students having access to their materials at 

more affordable rates. The public commenters have 

highlighted the importance of open educational resources, 

something that we at my institution do a whole lot of. 

The challenge is open educational resources do not exist 

to meet all the learning objectives of our programs, 

because providers of OER have focused mostly on highvalue gen Ed and other disciplines because of the costs 

associated with creating those materials. Alternative to 

that, the Department has done an excellent job of funding 

grants to develop OER. The reality is, we are not in a 

place where information is fully free and accessible. And 

I don't think we ever will be for a variety of reasons 

national security, intellectual property, a whole host of 

things around the content that our students need in order 

to meet the learning objectives. So the challenge we have 

in practice, in operation, is that we have to work with 

proprietary content providers to get information that our 

students need in order to learn the material and succeed 

in their degree programs. And that's the conversation 

that we need to have. And we need to have a more informed 

conversation about what choice entails. We have heard 

from UCF and students on an opt-in model, 70% of the 
15

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

folks on those opt-in models have participated. These 

models do work for students. We've heard on the opt-out 

side, 86% of students participate. What's the group that 

we're trying to solve for here? That middle ground 

between the 70% who opt-in and the 14% who opt out? My 

general concern is that we're shifting a model by a 

stroke of a pen that's going to incur a whole lot of 

costs and work to the disadvantage of students getting 

access to the content that they need in order to meet 

their learning objectives, which is all of our focus. You 

know, I saw a proposal from the other side that said 

students should have the opportunity.

MS. K. SMITH: Your time is up.

MR. DOLAN: Students should have the 

opportunity, not to.

MR. ROBERTS: Hold on Scott, you're 

more than welcome to requeue. But I want to make sure 

that we're- I saw Denise raise her hand a moment or two 

ago. Denise, did you want to weigh in?

MS. MORELLI: Well, I just wanted to 

point out that we have heard from students. And advocates 

can chime in if they have similar- gotten similar 

information, but that the opt-out is either hard to 

navigate, it's hidden, I think we talked about that 

before where it's buried in disclosures, and it's not as 
16

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

easy to do as I mean, at all the institutions, right? I 

mean, some of the institutions might make it very 

apparent and it is easy for their students to opt-out but 

we have gotten information from students during reviews 

and other places that it's not as easy as everyone makes 

it out to be at all institutions. The other thing I just 

want to keep pointing out is it is the students money. 

The Title IV funds are for the student to do with what 

they choose.

MR. ROBERTS: And as I said, you know, 

the time- people are more than welcome to requeue, we are 

trying to solicit as many perspectives as we can. So with 

that, Emmett, go right ahead.

MR. BLANEY: Thanks. Yeah, I've been 

trying to think of, like, a really clever metaphor. I'm 

sure Barmak probably has several floating around up 

there, and I can't really think of one, but it to me 

feels like if you went to the grocery store and they 

completely filled your cart with groceries, and then they 

say, oh, but you can take it all out. We've just stacked 

this whole thing with groceries, and you can opt-out 

every single time you go to the grocery store. And also 

you have to put it back where it came from and we're not 

going to tell you how to do that. Anyways. That's as 

close as I could get. That's not the same as being able 
17

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

to go into a grocery store and choose which groceries you 

buy and, you know, compare prices on name brand versus 

store brand, etc. Anyways, that's my shot at it. But my 

other thought is as far as data and evidence on kind of 

the artificial inflation of prices, I'd remind folks, we 

did submit two separate memos on this issue that I would 

invite you to read. And then my last thing is I think a 

question slash comment for the Department. I am super 

grateful for the language in this proposal. I feel like 

it is maybe missing a step ensuring that students get 

their money in a timely manner in order to be able to use 

their refund to purchase books. I know Dave, we chatted 

about this yesterday, and so I would just ask that the 

Department maybe commit to some preamble language 

clarifying that the timely receipt of funds is in the 

student's best interest and would fall under a reason for 

students to get their refund as soon as possible.

MR. ROBERTS: Greg, do you have an 

immediate response to that?

MR. MARTIN: Yeah, I can say we 

definitely are- the Department has always been of the 

mind that dispersing funds to students as soon as 

possible is where we want to be, and that funds should be 

dispersed in accordance with the needs of students. As 

David pointed out yesterday, we do have language in six 
18

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

668.14 now that sorry, you knowMR. MUSSER: 668.16. 

MR. MARTIN: 16, I'm sorry. 

Administrative capability, we're talking about program 

participation. Administrative capability. Thanks, Dave. 

So we have that now that does state that. So it would be 

applicable here. I do want to point out that there are 

some times legitimate reasons why schools don't disperse 

all the money upfront. You know, at the very beginning, 

some schools have- because there is potential where money 

is dispersed and students haven't begun classes that it 

can wind up resulting in overpayments for students. Which 

so being cognizant of that, we want to make certain that 

in any time schools choose to disperse funds, that 

they're doing it in accordance with the best needs of the 

student, and not for their own purposes, or to avoid 

having to make refunds or issues like that. So we can 

certainly I think commit to stressing that in our 

preamble language. David, did you have a comment?

MR. MUSSER: Yeah, I would just say 

the same. Yeah. I think we were comfortable explaining in 

the preamble to this rule that if we ultimately go down 

the road that we're currently proposing that if there is 

a situation where a student meets the criteria for the 

institution to be required to provide their materials to 
19

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

them then the school also needs to ensure that the 

student has ready access to alternative funds. Generally 

that will be in the form of a credit balance to the 

student if that is available to them. So the school needs 

to make every effort to disperse the funds to the student 

in order for that credit balance to be in their hands, in 

order for them to make that choice legitimately. 

Otherwise, I take your point that the student effectively 

does not have a real choice if the institution's method 

of getting them their books and supplies is something 

that's ensured and they have no idea when they will 

obtain a credit balance refund to get the books and 

supplies through some other means. So the Department does 

believe that that would be covered by the other 

regulatory provision that's going into effect on July 

1st, 2024.

MR. MARTIN: Thank you. David, I'd 

like to ask the our facilitator, Brady, if in the 

interest of time, perhaps we could do one more- just 

people with who currently have their hands up one more 

round. I understand that there's a wide range of opinion 

about this proposal. And I think at a certain point we've 

discussed every aspect of it to discuss this. There gets 

to be a point where I don't know that there's anything 

else to say about it that hasn't already been expressed. 
20

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

Quite well by individuals on either side of the issue so 

thank you.

MR. ROBERTS: Sure. Yeah, I see six 

hands up. We'll take those six and any ensuing 

discussion. And then there's still more of the document 

to walk through so we'll requeue the document shareres at 

that point. So with that, Zack, why don't you go ahead?

MR. GOODWIN: Thank you. And I'll try 

to be a little speedier because I know we have a ton to 

get through. My concern, because we are not an inclusive 

access school, however, we do generally disperse and get 

refunds to students, at least those who are eligible and 

have credit balances within about seven days of the terms 

starting and I mean seven days prior. Certainly, we find 

with our students a significant portion of those who even 

get money in their hands, don't spend that money on 

books. They're spending it on other basic living needs, 

like housing or food. Which is part of our issue. What I 

wanted to touch on was the issue of authorizations, 

because it seems like for the purposes of removing books 

and supplies from tuition and fees, we are effectively 

creating an authorization that must always be collected 

on a payment period basis. And this is different than how 

other types of authorizations are treated. And I'm 

curious about any kind of compromise where we might 
21

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

obtain an authorization up front, and then with proper 

disclosure and timely disclosure in future payment 

periods, that students can then opt-out well in advance 

of being charged anything, or at least well in advance 

enough that they can have charges reversed if they want 

to make a different choice. Because I think if this is 

really the direction we're going in and some of the 

guidance that authorizations has actually got to change 

to. That's all. Thank you.

MR. ROBERTS: Dave, did you have a 

brief response?

MR. MUSSER: Yeah. I want to look to 

Greg and Denise on this particular question. I think I do 

understand your point, Zack. Because I think the way that 

the language currently reads, it sounds like the- well we 

use the word authorization, but the authorization, 

general authorization for all of the sort of non-tuition 

and fee expenses is collected up front. So maybe the way 

that it's worded right now isn't quite accurate with 

respect to how the authorization, the initial 

authorization would work and then the subsequent 

agreements to allow funds to pay for books and supplies 

might work. I think that's the Department's intent was to 

allow for an initial authorization to cover the majority 

of expenses, the non-tuition and fee expenses. And then 
22

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

to require the school, the student to affirmatively agree 

to the specific books and supply charges in each payment 

period. So they see how much the books and supplies are 

going to cost before the payment period starts. And then 

they say yay or nay to the specific books and supplies 

that the school is offering them, if the school is 

offering it to them. So is that what you were getting at 

or were you going further to focus more on an opt-out?

MR. GOODWIN: Yes, the latter as a 

point in between.

MR. MARTIN: So Zack, I would say go 

back to what Dave said, he said it really well, that 

there's still the idea of the general authorization you 

collect. So in a very traditional model where you have a 

bookstore, you know, let's just say you have a bookstore 

at which students can charge their books and materials 

and Title IV aid will cover that. Right? And you 

collected authorization for that. Generally up front and 

generally, unless the student cancels it, it's good for 

the entirety of the student's matriculation. So with that 

model that always works because the students consent is 

implicit in the student walking into the bookstore, 

picking up said book and purchasing it. Right? So that's 

every time we get that, every time. I think the way that 

we've written this is if the school's offering inclusive 
23

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

access such that the materials will be charged with each 

say, each semester. Right? The students enrolling in the 

class that the student would have in order for the school 

to know that the student is authorizing this, then they 

have for each payment period, make that positive 

authorization where the materials are going to be 

included. And I think that's what this regulation is 

about. Because if you just went with the general 

authorization and didn't require that, then we're pretty 

much the same place we are now. We could just continue to 

basically just charge it whenever they wanted to without 

the student consciously making the effort to purchase the 

materials. Does that make sense? Dave would say I 

described that correctly?

MR. ROBERTS: Denise, did you want to 

weigh in?

MS. MORELLI: Well, and the only other 

thing is, I think Dave made the point that the book 

charges are going to change per semester. Right? So 

that's kind of what the Department was looking at in this 

situation is each semester, their courses are going to 

change and the books are going to change, and the 

supplies are going to change for a traditional more 

traditional semester-based program. So that's why the 

Department went with that because if you do it at the 
24

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

beginning, they may be not knowing what's going to happen 

in another subsequent semester.

MR. MUSSER: But there's a whole host 

of other kinds of expenses that generally are smaller 

than books and supplies that we don't believe that a 

payment period by payment period authorization is 

necessary for. So we would want there to be the option of 

doing the initial authorization to say, I would like the 

school to be able to use my Title IV funds to pay for 

this set of expenses, with the exception that I will have 

to give my opt-in for books and supplies on a term by 

term basis. That's the Department's intent anyway. And 

like I said, looking at the language maybe a slight tweak 

to get to that to avoid the issue that I just mentioned. 

We don't want you to have to collect authorizations over 

and over, but we just want to ensure that the student 

makes an affirmative choice each term about the books and 

supplies.

MR. ROBERTS: Okay. Thank you, all. I 

should have noted this sooner but Dom Chase has come in 

for business officers. But first, I see Carolyn's hand. 

So Carolyn, go ahead.

MS. FAST: Thanks. I just wanted to 

make the point that this change, which I strongly support 

for the student's choice here, is both a reaction to bad 
25

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

actors and a reaction to the model itself. Because I 

think we've heard from a few people saying that, oh, you 

know, you shouldn't change the policy just because of 

some bad actors or situations where students are charged 

without even being told. It's actually not just that 

problem that the Department is working to correct here, 

but also the problem that the system of requiring 

students to opt-out and rather than opt-in is in fact a 

fundamentally flawed model. And I agree with the point 

being made by Greg earlier that if a textbook company 

comes to an institution and says I cannot provide a 

volume discount, if you do it, opt in by opt-out. That 

has to be disingenuous. We already know that they can, 

through their marketing research, make an estimate of how 

much people will join as an opt-in versus an opt-out. 

We've had numbers quoted to us just in this conversation 

about, you know, 70% versus 84% or whatever. So certainly 

they can predict what an opt-in model would look like, 

what the volume would be, and what discounts might be 

available based on that. So it's I feel a very 

disingenuous argument to say that this model can only 

work with an opt-out model, and that doesn't make a lot 

of sense to me. And it sounds like it has to do more with 

the profits of textbook companies than, like, actual ways 

that a system could work. And I support the Department's 
26

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

proposal here. 

MR. ROBERTS: Thank you. Dom, please 

go ahead.

MR. CHASE: I think one of the big 

differences is we've got quite a few people that have 

built these programs from an operational standpoint that 

understand the differences. I would like- a couple of 

comments and then a question for the Department. Denise 

had mentioned, that the real concern was the nature of 

the opt-out. And that was something that we really worked 

to offer as an alternative in the proposals to enhance 

the transparency of the opt-out and make it more clear 

for students, web-based, etc. That was really exactly 

what we thought was the issue and where we offered our 

alternatives to the Department, which we didn't receive a 

response. I think one thing that I'd like to offer 

additionally is there are a wide range of financial aid 

programs, both from state Governments but also private 

entities that cover tuition and fees for students. And I 

think consideration would need to be looked at for the 

impacts of this change as it relates to students 

leveraging those financial aid programs to cover the cost 

of books so they don't have to cover it with their Pell 

refund, for example, or other resources that they have. 

And a question for Greg. Yesterday I noticed that you 
27

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

wrote down a suggestion from Barmak on the language 

around cleaning up this a little bit. Are we going to see 

that language or is that for later? And I have a feeling 

it's related to- it sounded like components of tuition, 

but my question would be, my second part of the question 

would be, how do purchasing bulk licenses on behalf of 

students differ from other bulk purchases of licenses for 

software such as Microsoft Office, Zoom, etc., that we do 

for students already?

MR. MARTIN: Well, you know, for your 

second question, I mean, I don't purport to know- to be 

an expert in purchases of bulk items or anything like 

that. And certainly, it's not the Department's intention 

to get in the way of institutional purchasing. I just go 

back to the fact that I don't find it to be a credible 

argument and it has been raised that, you know, 

publishing companies will only give us the best rate for 

students if we can present this more restrictive model to 

them. If that's what those companies are doing. I don't 

find that to be and I will go back to Carolyn's word. I 

find that disingenuous, quite frankly, I do. Now, they 

may have a business reason for doing that but I don't 

think it's- that reason is not compelling to me or in any 

way sway me to believe that we should change what we're 

doing here in order to facilitate that type of a 
28

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

negotiation. Because I don't think it's necessary for 

those companies to do that if they are doing that in an 

attempt to widen their profit margin and they have every 

right to do it. But I don't think that it's incumbent 

upon the Department to facilitate that. And we may 

disagree there, but that's just. Now Barmak's language, 

I'm not- I remember that yesterday that was a change for 

clarification and I'm not sure- I don't exactly recall- I 

don't 100% recall exactly what that was. Dave, do you

remember that language we decided we would tweak?

MR. MUSSER: So it may be talking 

about the issue of OER and resources that the institution 

obtains for free or for a nominal cost that they then 

turn around and provide to the students. It's odd to have 

a situation where the student- you know, we're 

essentially saying you can't put those in tuition in 

fees. So where do they go? Do they go in ebooks and 

supplies charge of zero? Do they go in some other way? So 

we were trying to come up with a way of dealing with that 

in language. And we could also be in preamble guidance if 

we get to that and that might also work. But I certainly 

thought that there was some room there for us to think 

about alternative language on those kinds of items. And 

that was, I believe, one of the earlier points, not just 

OER, but things that where the school is taking 
29

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

resources, where it may already have licenses and simply 

taking pieces from that, where there's no additional 

expense to the school to do it, and therefore there's no 

additional expense to the student when the school 

provides it. These are- that's some very somewhat 

complicated language that we might have to come up with. 

I think we, you know, we're open to that. If it does 

appear that you know, there's enough room for compromise, 

I think, on both sides, but I defer to you, Greg, as to 

whether, you know, we should necessarily go down that 

road under the circumstances.

MR. MARTIN: Yeah, yeah we can- I'm 

going back to addition to what Dave said, Barmak did come 

back and said that his suggested regulatory edit for the 

Department was 668.164 (c)(1) romanette 2 (b). In which 

he said strike at or in the sentence limiting the 

provision to below market rates would better enable 

institutions to negotiate with publishers seeking 

privileged access to students through institutional 

bookstores. So that was Barmak's suggested text.

MS. MORELLI: I think the language. 

Dom, are you talking about where Barmak said something 

about include and that we needed to change it? Is that 

what you're asking about?

MR. CHASE: Well, it's related to the 
30

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

question about the other things that we purchase as a 

part of tuition. And Barmak was cautioning against 

breaking tuition into components. But I think the 

conversation was around can you offer something for free 

and I'd like to see that language if that's something 

that you're looking at bringing up. And then the question 

would be is that opening the door then to all of the 

other components of tuition, where we're already bulk 

purchasing on behalf of students, like other software 

licenses that we do? So students where they can make an 

individual consumer choice and buy those licenses. But 

there's a difference that I cannot see between textbooks, 

fundamentally between textbooks and those licenses.

MS. MORELLI: I'm not sure we're in 

the same place, but okay. I think you're talking more 

along the lines of something different than I think his 

language change was in (c)(1).

MR. ROBERTS: I think Barmak maybe 

just offered some clarification in the chat.

MR. MARTIN: Barmak has his hand up. 

We could ask him.

MR. NASSIRIAN: Very briefly. I'm 

sorry, I don't type quickly. So what Greg was referring 

to was a different suggestion I'm making today. 

Yesterday, I suggested replacing the word include with 
31

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

something like automatically bill in 164 (c)(1) romanette 

1 cap (a). And that had to do with this notion. And I put 

all of this in the chat very slowly. So yeah, my comment 

happened to come in at an inauspicious time. So I kind of 

confused the conversation. Yesterday's comment had to do 

with (c)(1) romanette 1 cap (a).

MR. ROBERTS: Okay. Thank you, all. 

Very briefly, DC and Jessi just joined us, so welcome to 

the both of you. And we'll go to Jason next.

MR. LORGAN: Thank you. So I have a 

follow-up question to the suggestion that schools can 

continue to offer affordable access programs. So during 

the 2014 neg reg, the Department's lead negotiator went 

to great lengths to explain the Department does not 

regulate what institutions charge for tuition and fees, 

but can regulate how institutions settle ledger accounts. 

So when it comes to books and supplies, can you clarify 

if there are any changes to this 2014 viewpoint? Thank 

you.

MR. MARTIN: I'm trying to recall that 

conversation. It is true that we do not regulate what 

institutions can charge for tuition and fees. That's a 

proprietary decision. I'm not- you'll have to clarify 

what you mean by how institutions settle ledger accounts.

MR. LORGAN: Yeah. Is that what this 
32

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

is all about is really the question of how institutions 

settle ledger accounts? Because we've heard repeatedly 

that once disbursement happens, students can act in any 

manner they wish to acquire their textbooks. So it's 

related to that.

MR. MARTIN: Well, right. And in this 

case, we would still be, you know, it would still be 

allowable for the institution with when- if the 

institution has having obtained the student's 

authorization to do so, to charge the student for the 

materials for that semester. Whatever- however many 

credits the student's taking and for however many classes 

the student's opting into to those charges for materials. 

It just would have to be a charge that would absolutely 

appear on the student's ledger account at that point. So, 

you know, it would only appear there if the student 

authorizes the charge, which is different from the 

current model, where you can just automatically include 

it in tuition and fees and do so unless the student opts 

out. So I'm not sure from the accounting standpoint how 

that's much different, except that the charge can't occur 

until the student is authorized it. You still use Title 

IV funds to pay for it it's just now essentially become a 

non-institutional charge. But it's still an allowable 

charge. David, do you want to offer any clarification on 
33

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

that?

MR. MUSSER: So I think what you said 

is the Department's position and the position that we 

asserted in 2014. You know, first of all, it is accurate 

to say that we don't regulate tuition and fees. We do 

have legal language in the Higher Education Act that 

distinguishes between tuition and fees and books and 

supplies, and we treat books and supplies as a separate 

category. That should in our view and in this rulemaking, 

should not be lumped in with tuition and fees, except in 

a very narrow set of circumstances. And our argument was, 

yes, and is, that in terms of how you present the charges 

to students, the books and supply charges need to be 

separate from the tuition and fee charges. And the 

Department has that authority under the Higher Education 

Act to require that in order for the institution to 

disburse Title IV aid to pay for those charges. All of 

that said, nothing would stop the institution from 

increasing its tuition once it separates out those 

charges and now having higher books and supplies and 

tuition charges. The point is that we are saying that the 

charges for books and supplies should not be lumped in 

with the tuition and fees, and they need to be separate. 

And because we have a framework for how allowable charges 

work and how they are paid and how they are authorized, 
34

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

we are also treating our proposal now is to treat the 

books and supplies as a charge that requires 

authorization and has certain other criteria.

MR. ROBERTS: Thank you, all. Jillian, 

sorry for getting our wires crossed this morning. I think 

our timing is perfect, as your proposal, I think, has 

just hit every negotiator's inbox and the floor is yours.

MS. KLEIN: Yeah, thanks. I mean, I 

wasn't going to talk about that, but I guess I'll just 

make a comment. And I said it in the chat too. On the 

conversation as a follow up from the conversation 

yesterday about the proprietary materials, etc. that we 

had and the Department's invitation to some language. I 

did send that in this morning. And so, you know, 

obviously would want to get the Department's perspective 

on that before I would feel comfortable doing a consensus 

vote in general on this language. What I was going to 

say, though, is sort of back to the conversation about 

the multiple comments I think we've heard now both today 

and throughout the past couple of months, related to sort 

of hidden opt-out language or inconspicuous opt-out 

language. I just, again would track back to the large 

proposal that I think nine of us signed on to. That 

included a ton of details about how the Department could 

require the opt-out language to be clear and conspicuous, 
35

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

and I don't believe that we've heard sort of a 

satisfactory response to why that hasn't been included or 

sort of discussed more broadly in the spirit of 

compromise. Because I think we've tried to get it. And 

I'll just say, I mean, I think from like a best practices 

perspective, every institution should have been doing 

this anyway. And so if there's like an oversight or 

compliance concern in terms of how that's being 

monitored, I would definitely encourage the Department to 

think about if there are ways to bolster that in a 

different way. But in general, we try to take sort of all 

of the best practices that we could think of in terms of 

disclosure and add them to that proposal that we sent in 

so that it would be really evident to a student what the 

process would be to be able to opt-out. So we would just 

like to hear, I think, more details from the Department 

about, in the spirit of compromise, why that approach 

wasn't sufficient, given that we consistently have heard 

from the Department that one of the big concerns was sort 

of hidden opt-out language.

MR. MARTIN: That was one of our 

concerns. But as I pointed out earlier, it was not our 

only concern. I think that Denise had pointed out that 

there are- she has seen instances where the opt-out 

language was hidden. And that is a concern of ours. But 
36

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

as I go back to the point that a primary concern of ours 

is that the money we're talking about here is student 

money. There is, as Dave just pointed out, we are making 

a difference between or striking a difference between 

tuition and fees and books and supplies and saying that 

the purchase of books and supplies has to be done with 

the student's authorization to use their Title IV funding 

for those materials. So that's a fundamental possession 

of ours that cannot be reached simply with a better optout measure. Because even with a better opt-out measure, 

the student is still- the default practice is still that 

the student is charged as part of tuition and fees, is 

charged for books and supplies. And we are concerned that 

as this model continues to grow, and I think it will with 

electronics, with more access to electronics. We're 

moving away from the model that was in place certainly 

when I was in school where you, you know, you got the 

list of books for your classes, went to the bookstore, 

and bought the books. That's the way it worked in 1984. 

But it doesn't anymore. So with this becoming more 

ubiquitous and I think it can benefit students to have 

these types of materials provided by the school. But we 

fundamentally believe it should be a student's choice.

MR. ROBERTS: Okay. So our final 

comment on this and then we'll move on will be Scott. So 
37

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

Scott, go ahead.

MR. DOLAN: And I apologize for 

earlier Brady for going over. It would have been helpful 

at the start for that to be laid out more clearly. Would 

have saved a number of us a whole lot of time, effort, 

and energy around trying to get to a compromise relative 

to what we heard in the beginning, which was around 

transparency and disclosure, not about opt-in versus optout. And if that was a fundamental, non-negotiable, being 

clear about that on the front end would have been helpful 

to all of us, I think. When it comes to bulk purchasing. 

A good economics course will tell us a little bit about 

markets and how they work, supply and demand. We're not 

saying it doesn't prevent us from the model. It's we're 

saying it allows us to negotiate the best price. Right? 

And I understand the concerns around the prices of 

textbooks. This is one of many mechanisms that 

institutions are doing to drive down the cost of 

materials. When it comes to education and the grocery 

store example, we make a lot of choices on behalf of our 

students. That's our job. You know, students don't get to 

decide what courses they take as part of our curriculum 

in order to meet learning out objectives. We're building 

that curriculum for them to help them get to the finish 

line. We're also selecting content to help them learn the 
38

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

material within our courses. We want them to engage with 

that content so that they have the skills and 

competencies that they need when they graduate. Emmett, I 

have read the proposal. I would love good research based 

on good methodology that allows us to do research of the 

impact of these programs. I apologize, but the research 

that is presented there is not really comparing apples to 

apples, as we suggest in the memos. We should do that 

research, right? And we should take this opportunity of 

the change that we made in 2014 and the models that have

come since then that allow us to see what's working and 

what's not, and to make reasonable sound adjustments to 

this that work in the interests of our students and their 

success in the spirit of compromise. I'll only end up 

that I still have not seen data and evidence to support 

the issue that we have presented at scale, how many 

students are impacted, to what extent in terms of cost to 

taxpayer dollars? And I think that's what really should 

drive changes to negotiations and regulations. So I guess 

that's where my concern is a little bit admittedly a 

little bit frustrated to sit at a table and to have the 

integrity of a number of my colleagues questioned it's 

just not fair. And also let's negotiate what the real 

issue is, which at the end of the day, we got to today 

which is about choice, right? And what we define as 
39

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

choice, opt-in versus opt-out and if that was on the 

front end we would have had a more informed conversation 

to get here. And I think this is fundamentally we have 

philosophical differences. We're operating from different 

first principles. And I don't know if we can get to the 

same place. The unfortunate reality is that's going to 

impact students in negative ways. So I hope as we move 

forward, there are opportunities for us to discuss ways 

that we can kind of make adjustments to make these models 

work better for everybody at the table, everybody at the 

table. And I mean that.

MR. ROBERTS: Thank you all for that 

discussion. If we're ready to move on. Greg, I'll turn it 

back over to your team to walk us through the next 

section of the document.

MR. MARTIN: Okay. The next thing 

we're going to discuss is hopefully, while we're in more 

agreement than we had previously. We're moving on to tier 

one arrangements in 668.164 (e). And you can see, we'll 

move down to (f) to look at the changes we have made 

there. We made some tweaks to (f) where you can see here 

that we have put in no fee is automatically charged to a 

student when the student graduates, separates from the 

institution or reaches the specified age. So it's more 

clarifying language there. And then we've also added (g), 
40

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

no fee is charged to any student for inactivity on the 

account. So we believe that these two changes address in 

large part the existence of junk charges. The only otherjunk fees, rather. The only other thing we did here is if 

we scroll down, we just made some changes you can see 

here and (c) with the addition of subparagraph (g). So 

that is all we have done in this section. It's not a lot. 

It's pretty much what we presented to you last time just 

with some tweaks. But I will open the floor for any 

discussion at this point.

MR. ROBERTS: Thank you. Carolyn, 

please kick us off.

MS. FAST: Thanks. I'm supportive of 

these changes, but would it be possible to put back the 

language that you just had on the screen for one second? 

Because I wanted to make one suggestion if possible.

MR. MARTIN: Vanessa has it back up 

here.

MS. FAST: Perfect. Thank you. So in 

(f) where talking about no fee is automatically charged 

to a student when the student graduates. I wondered if 

and I may not have been the intent of the Department, but 

when we were making these suggestions, our intent was 

that this would also address a fee that- so, for example, 

a financial product might be marketed to a student as a 
41

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

fee-free and then upon graduation, it would convert into 

something that might, let's say, have a monthly charge. 

And I'm not sure that this language entirely addresses 

that. It sort of sounds like there's like a penalty upon 

graduation. But not that the product can convert from 

fee-free to monthly fees or something. So if the 

Department was intending to prohibit that, which was the 

intent that we had when we suggested this change, then I 

would suggest adding something like when or subsequent to 

the student's graduation. Like maybe instead of making it 

at the point of graduation, it would be like subsequent 

to, at or subsequent to the student's graduation, etc.

MR. MARTIN: I'll let Denise address 

that.

MS. MORELLI: Yeah. Carolyn we were 

trying- I was just trying to get away from sunset fee 

because I didn't think it was common use, and I wanted to 

make sure everything that we have seen and you have seen 

is covered. So if you just tell me where and then Vanessa 

can potentially type it in.

MS. FAST: Oh, thanks. So thank you I 

appreciate that. And I agree that sunset fee was not 

really the best way to do it here, so I appreciate that 

change. I was maybe thinking that changing when the 

student graduates to something like, subsequent to the 
42

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

student graduating, separating or reaching a specific 

date might work because instead of a one-time fee, it 

would be to prevent like.

MS. MORELLI: A continuing. Yeah, I 

see.

MS. FAST: Okay. Thanks so much.

MS. MORELLI: Vanessa. Can you type 

that or whoever's presenting?

MR. MARTIN: So is it subsequent to 

when the student- is that what you want there?

MS. FAST: I think that would work. 

But I'm open to however you want to address that. But 

that was- subsequent to might fix that. Thank you.

MR. MARTIN: I think we can make that 

wording change, Denise.

MS. MORELLI: Yes.

MS. FAST: Even just adding subsequent 

to would work. Something like that.

MR. MARTIN: I think grammatically 

that's okay. Barmak will tell me if it isn't. Yeah, okay.

MR. ROBERTS: Okay. Thank you, all. 

Sophie, we'll go to you next.

MS. LAING: Thanks. I just wanted to 

ask the Department about the language choice on 

automatically charged and why the Department decided to 
43

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

use automatic instead of just when a fee is charged to 

the student.

MS. MORELLI: I think we're open to 

either. I thought that's what we were trying to cover 

because they're usually that's what we have seen in 

reviewing these situations. It's an automatic charge. I 

think we're okay with just charged to cover it.

MR. MARTIN: I think so. I don't think 

we need to- I don't think- charged would include 

automatically or otherwise.

MS. MORELLI: Yeah, it would cover 

both. We weren't trying to prevent anything, Sophia. I 

just was trying to capture the intent here, so I think 

we're okay.

MS. LAING: Thanks.

MR. ROBERTS: Alright. Anyone else on 

this? If not, I think we can return to the PDF and keep 

walking through the document.

MR. MARTIN: And we'll be moving on to 

668.164 (h)(1) Title IV credit balances. And you can see 

we made a slight tweak here. And before we go into this I 

just want to personally thank everybody on the committee 

for the support we received for this particular provision 

because I personally believe this is a huge protection 

for students. It's definitely reining in some abuses 
44

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

we've seen out there. This is Title IV credit balances 

are how students pay their, you know, pay their expenses 

that are outside tuition and fees. So very important that 

they receive those. And this has always been a big one 

for me. So glad we have it here. But you can see here 

that this was a change that we made just in wording that 

I think Zack Goodwin had proposed as a clarification. So 

the definition of Title IV HEA credit balance. A Title IV 

HEA credit balance occurs whenever the amount of Title IV 

HEA program funds in combination with any other Federal 

or non-Federal funds, including but not limited to 

scholarships, grants, and private loans credited to the 

student's ledger account for a payment period exceeds the 

amount assessed the student for allowable charges 

associated with that payment period, as provided under 

paragraph (c) of this section. So it's just offering 

clarification to something that we had previously 

indicated- everybody indicated that they were supportive 

of. But I will open the floor for discussion on it.

MR. ROBERTS: Any questions? Comments? 

Thoughts on this? Okay seeing none. Greg, are we okay to 

keep moving along?

MR. MARTIN: I believe we are. And we 

can move on to returning funds and overpayments in 167. 

And we're moving to some language that David added under- 
45

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

I think we're going to if I'm not mistaken, we're going 

to (c)(7) where those language changes start. There we 

are. And this language was added. Remember during our 

discussions in February, there were some concerns about 

the Department's procedures for the collection of 

overpayments. And this is when overpayments are referred 

to the Department for collection by institutions. And 

what the protocol will be at the Department for the 

collection of those overpayments. So I'm going to walk 

through this language. We'll read through it just to see 

what's here. And then we'll open the floor and take any 

discussion on this. So let's take a look at this. When a 

Pell Grant overpayment has been referred to the Secretary 

under (c)(6) of this section, the Secretary must provide 

the student the opportunity to repay the amount in 

accordance with a reasonable and affordable monthly 

payment plan, on the basis of the borrower's total 

financial circumstances. The Secretary considers the 

monthly payment amount to be reasonable and affordable if 

it's consistent with the Direct Loan rehabilitation 

requirements under 34 CFR 685.211 (f)(1), which are for 

defaulted loans. (9), the student may- the Secretary may 

calculate the payment amount based on information 

provided in the student's FAFSA or orally, 

electronically, or in writing by the student or the 
46

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

student's representative, and provide the student with a 

payment plan using that amount. The student may confirm 

their information by giving written, electronic, or oral 

permission to disclose applicable tax information to the 

Secretary, or by providing alternative documentation of 

income or family size. If the student does not provide 

documentation requested by the Secretary to calculate or 

confirm the reasonable and affordable payment amount 

within a reasonable time set by the Secretary is not less 

than 30 days, the payment agreement provided is null and 

void. Within 15 business days of the Secretary's 

determination of the student's payment amount, the 

Secretary must provide the student with a written 

statement confirming the student's reasonable and 

affordable monthly payment amount calculated under 

paragraph (c)(7) of this section, the date on which the 

first payment is due, a statement that the payment amount 

is null and void if the student does not provide any 

documentation requested by the Secretary pursuant to 

paragraph (c)(9) and an explanation of any other terms 

and conditions applicable to the payments that must be 

made. The Secretary will not impose any conditions 

unrelated to the amount or timing of the payments. The 

student remains eligible to receive Title IV HEA program 

assistance under 34 CFR 668.32 (g)(4) until the student 
47

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

does not respond or provide documentation satisfactory to 

the Secretary for 90 days to the Department's offer to 

enter into a reasonable and affordable repayment plan; or 

the student fails to make any payment pursuant to the 

repayment plan for a period of 120 or more days. A 

student may request that the monthly payment amount be 

recalculated due to a change in the student's total 

financial circumstances by submitting alternative 

documentation of the student's income or family size 

satisfactory to the Secretary. In this case, the 

Secretary shall recalculate the monthly payment amounts 

pursuant to paragraph (c)(7) of this section. So I'll 

stop there and we will open the floor for discussion.

MR. ROBERTS: Alright. Thank you. 

Yeah. Sophie, we'll get to you but, Dave, I see your 

hand.

MR. MUSSER: Before we get started, I 

wanted to walk through some context for these changes. 

Especially as they relate to the negotiator proposal from 

which many of them are drawn. Just to make sure that it's 

clear why the Department made certain choices with this 

language. If that's okay.

MR. MARTIN: Go ahead, Dave.

MR. MUSSER: So if we could scroll 

back up to the top really quickly. So Greg went through 
48

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

each, yes thank you, went through each piece of the 

language. Most of this is in fact drawn from the 

negotiator proposal to provide this additional language 

to codify the Department's approach to Pell Grant 

overpayments and their repayment once they are referred 

to the Department. Our feeling was that the negotiator's 

proposal largely already described many of the 

Department's policies and procedures for doing that, with 

some exceptions. And we attempted to align these things 

as closely as possible with the proposal, but there were 

some significant differences. One of those is in under 

paragraph (8) here. The negotiator's proposal requested 

that we align the monthly payment amount calculation with 

the new SAVE Plan methodology the Department has just put 

in place. The Department does not believe that it's 

appropriate to align- to provide a different process for 

establishing that monthly payment amount than the way 

that we establish that amount for Direct Loans that have 

gone into default. Both of those are treated as debts to 

the Department that we believe need to be treated 

consistently. So what we've done here is we've added 

language to say if it is consistent with the Direct Loan 

rehabilitation requirements and we've cross-referenced 

that regulation, if that regulation ever changes, for 

example, if it did become more generous, this would also 
49

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

change under these provisions. I think we can scroll down 

a little bit to talk about the other significant 

difference. The other significant difference is under 

paragraph (11) here. Where the student- where we say the 

student remains eligible to receive Title IV HEA program 

assistance. We added one concept here to ensure that the 

student does respond to the Secretary's request. It is 

our feeling that when a student doesn't have any response 

whatsoever, the Department does need to take action to 

remove the student's eligibility and to take all 

necessary actions to treat that as a debt. The student 

needs to repay as soon as possible. However, if the 

student does respond then we agree that it's reasonable 

to provide that student with a substantial amount of time 

following a missed payment before we remove their Title 

IV eligibility. However, we believe that the Debt 

Collection Improvement Act requires no more than 120 days 

for that purpose. And again, we treat this as a debt. 

Similar to a defaulted loan. And that we don't believe we 

can go beyond 120 there. And I believe there are some 

other somewhat more minor changes. But those were the two 

major ones I wanted to call attention to.

MR. MARTIN: Thanks, David. You can 

open the floor.

MR. ROBERTS: Great. Sophie, please.
50

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

MS. LAING: Thanks. And thanks for 

that explanation. That's definitely helpful. And for 

taking a lot of the suggestions in our proposal. I do 

have a couple of questions for the Department and also 

just kind of a response to treating this debt as if it's 

a defaulted loan. Even those that default on their loans 

and are going through the rehab process, they only have 

to make nine payments under that affordable and 

reasonable repayment plan and then they do get to enter 

the SAVE Plan if they apply for it. But with these 

borrowers, they might be stuck in that kind of IBR like 

plan for like the whole payment of their loan. So they 

might be stuck making those actually unaffordable 

payments for much longer than someone who actually 

defaulted on their loan. And for these borrowers in 

particular, that might be a real struggle making those 

IBR payment amounts because they aren't actually that 

affordable to low-income borrowers like the SAVE Plan 

would be. I did want to ask about if the Department's 

cross-reference to the Direct Loan rehabilitation 

requirements included the part where borrowers can also 

adjust their repayment amount if it's not affordable by 

providing there's like a long list in those regulations 

about reasonable and necessary expenses and showing the 

Department that they can't actually afford those 
51

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

payments. I think the referencing to the Direct Loan 

rehab requirements in that section generally is a bit 

confusing because it, you know, talks about there being 

nine voluntary and reasonable payments, which doesn't 

apply to these overpayments. But then also wanted to ask 

if it does include the ability for these students to get 

lower payments by submitting that additional 

documentation. And if it doesn't, we would strongly 

encourage the Department to include that language. And we 

were able to send that as well. We updated our proposal 

to include that.

MR. MUSSER: I'd say the Department's 

intent is to allow for that process. So if it's not 

represented in the language here, I think we're open to 

slight amendments to get to that.

MR. ROBERTS: Yeah, Barmak, go ahead.

MR. NASSIRIAN: Yeah. One of the- this 

may come as a surprise to the Department, but one of the 

admonitions that I was so used to hearing from the 

Department in previous rulemakings was that the Secretary 

does not regulate him or herself. Which kind of makes 

sense. In multiple places in this text, I see a 

formulation that reads the Secretary must. Which is kind 

of odd because, you know, typically it's like the 

Secretary may or, you know, so on so, shall. I think it's 
52

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

probably good practice to replace that verb with like 

will just to keep consistency. I don't know whether 

that's helpful or not. But it just struck me as very odd 

to see the Secretary must do x, y, and z in regulations.

MR. ROBERTS: That makes sense, 

Barmak. We were thinking about simply saying provides 

without saying will, etc. So we may make that change.

MR. ROBERTS: Thank you, both. Sophie.

MS. LAING: I also just kind of wanted 

to push back a bit on treating these overpayments as if 

these are students that have defaulted on their student 

loans. I mean, these students may have had to withdraw or 

leave school or just drop credits due to some life 

circumstance outside of their control. And then 

immediately or fairly immediately they have an 

overpayment due to their school or the Department, 

whereas the defaulted loan, they, you know, have missed 

nine months of payments and have had the option to enroll 

in Income Driven Repayment Plans and choose the repayment 

plan that makes the most sense for them. And the 

timelines for these overpayments are so much shorter. And 

the students in these situations are there probably 

because something really terrible just happened in their 

life that they're trying to deal with. So I think, you 

know, the SAVE Plan offers them an actually affordable 
53

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

repayment plan amount. And, you know, with that formula 

wouldn't require, I think, the additional alternative 

documentation process that's under the Direct Loan rehab 

regs, because the payments would already be affordable 

under the SAVE formula.

MR. MARTIN: They've addressed the 

specifics of why we settled on this and don't believe we 

can go any further. But I do understand your point that, 

yeah, in many cases, when a student knows an overpayment, 

there could be a variety of difficult circumstances 

involved in that. But fundamentally, we have to 

understand that these are not loans, these are not 

borrowers, they might be borrowers in other ways, but 

these are grants. So we're talking about, in this case, 

Pell grants and we mirror the language for FSEOG grants 

in the other section. But it's money for which, for 

whatever reason, the student is simply no longer eligible 

and the default position would be that and used to be 

that the student owed that amount up front and renders 

the student ineligible to receive aid. So we don't want 

that to happen, obviously. And we've, I think, gone as 

far here as we can, but I think we have to keep in mind

that although we have referenced some elements of 

defaulted loan rehabilitation. This is a grant 

overpayment. And for whatever reason it occurred, it's 
54

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

funds- it represents funds for which the student is not 

eligible. But I'll turn it over to Dave for Further 

explanation of the details.

MR. MUSSER: I think that's right, 

Greg. Ultimately we understand your perspective, Sophie 

on this that these are debts that are that occur 

differently under different circumstances. And if we had 

the ability to go further, I think we probably would. I 

am not an expert on the Debt Collections Improvement Act 

and the folks that we talked to who are experts on that, 

they believe pretty firmly that these debts fall into the 

category of debts that are covered by that act. It may be 

that with additional legal analysis, we could get 

further. But unfortunately, we just don't have the time 

to do that here. I don't know that we could. As I said, 

the Department's view right this moment is that they are 

debts that fall under that law and for that reason, we 

believe they should be treated consistently in certain 

respects- with respect to the requirements of that law 

and with respect to consistency with the Direct Loan 

rehabilitation requirements. We do agree that to the 

extent that we can make that more consistent. We were 

open to that here. Because we want to ensure that 

students don't have an easier time getting, you know, 

maintaining their status and if they have a defaulted 
55

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

loan than they do in a Pell Grant overpayment or FSEOG 

overpayment situation. But at least for now, that's the 

Department's position.

MR. MARTIN: Thank you, Dave.

MR. ROBERTS: Thank you. Sophie, do 

have a new comment, or is this follow-up?

MS. LAING: Yeah. I just wanted to 

clarify that the Department's proposal references the 

rehab regs (f)(1), but I believe the like alternative 

process to potentially lower the payment is in (f)(2). 

But we additionally are ready to submit language 

incorporating that process. And then I also just wanted 

to note that Robyn will be coming back to the table for 

legal aid organizations.

MR. ROBERTS: You're working me out of 

a job, Sophie. Welcome back, Robyn.

MS. R. SMITH: I just wanted to 

explain the (f)(1), (f)(2). So your paragraph (8) refers 

to 34 CFR 211 (f)(1). That specifically refers to the 

nine out of ten monthly payments, which doesn't really 

apply here. And it doesn't include the alternative 

payment arrangements that people can request under rehab, 

which is in (f)(2). And we want to make sure that to the 

extent that the Department's going to stick with this and 

stick with IBR, it does so with language that works. And 
56

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

that includes the alternative, the ability for students 

to request an alternative calculation based on their 

individual financial circumstances. We have language that 

we think fixes this problem. And we can submit that right 

now.

MR. MUSSER: Thank you. Yeah, we're 

open to that.

MR. ROBERTS: Thank all of you. Greg, 

I think there's one more section to walk through. Do you 

want to bring that up now?

MR. MARTIN: I believe we can look at 

it, but I believe this is for FSEOG overpayments and 

mirrors pretty much what was in Pell. But I will ask Dave 

if there's anything specific in here he wants to 

highlight that was not highlighted in the Pell Grants.

MR. ROBERTS: He's shaking his head.

MR. MARTIN: Okay.

MR. MUSSER: It should be entirely 

consistent. I did want to highlight one quick thing 

before we finish on this topic. One thing that is not 

immediately apparent in the regulatory text, but which I 

think the schools, in particular, should be aware of, is 

that the various changes that we made to the Title IV 

eligibility requirements, including that very first one 

that Greg talked about yesterday, essentially result in a 
57

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

somewhat significant change to how schools deal with the 

cases where they identify the overpayment. The school 

does not actually assign the student to NSLDS for them to 

make them Title IV ineligible. They follow the same 

procedures that currently follow to get them into a 

satisfactory repayment arrangement and or eventually send 

them to the Department. And it is only the Department 

that makes the determination that the student should lose 

Title IV eligibility if one of those two conditions are 

met. So I don't know if that was entirely clear from the 

regulatory language, but that is, in our view, how this 

would work.

MR. MARTIN: And I think that's a 

significant benefit for the students over the current 

practice.

MR. ROBERTS: Thank you all for that 

discussion on cash management. Greg, how would you like 

to proceed? I know that the intent was to move to a 

consensus check right now, but I know.

MR. MARTIN: The Department would like 

to request an internal caucus. Give us 20 minutes. It 

might be faster.

MR. ROBERTS: 20 minutes might be 

faster? Okay, we'll say- I'll check back in at 11:35 and 

we'll have an update for them. Jillian, do you want to 
58

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

say something?

MS. KLEIN: Yeah. I just want to say 

one thing. Since I mentioned my proposal, I don't know if 

folks saw the chat, but Barmak had some suggestions, and 

I'm working feverishly to try and address those in the 

proposal that I sent. So I just wanted to provide an 

update. Thanks.

MR. ROBERTS: And we'll send that to 

obviously the Department and facilitators the moment that 

we get them so there should be time hopefully soon.

MR. MARTIN: Thank you.

MR. ROBERTS: Okay. Yeah, DC.

DR. PRINCE: Just a question on 

formality. As I understand the conversation, there are a 

number of proposals coming. Is it- it sounds as though, 

is 20 minutes of a caucus going to be long enough to give 

the negotiators due diligence of a response to their 

request to properly vote in 30 minutes, basically?

MR. MARTIN: I'm not 100% sure what 

we're- I don't want to commit to anything right now. We 

do need to look at- we have a lot of things on the table. 

I think we need to be cognizant of time. I mean, you 

know, we're coming down- we have to do accreditation. We 

have other things we have to do so we cannot spend the 

rest of the day or the rest of the two days on cash 
59

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

management. Looking at proposals takes time, absorbing 

them. So I want to be- I want to go into caucus and 

determine what we can look at quickly and come back withmy intent is not to cut off debate or discussion or tobut we do have to be cognizant of the timeline we're 

working with.

MR. ROBERTS: I'll speak just from our 

perspective, DC. If in 20 minutes there's changes to the 

document, obviously the negotiating team, the non-Federal 

negotiating team will have, you know first pass at that, 

opportunity to discuss. And then from there, you know, 

depending on how that shakes out a consensus check and 

then moving on into the rest of the business that we 

would like to get to before kicking off accreditation.

DR. PRINCE: Does it make sense just 

to go straight to consensus check now? Because the 

concern I have is the proposals that are being submitted 

may not get the due diligence of a review and might be 

shortchanged anyway. And so we would have gone through, 

and sorry, I'm not trying to stress people out, but I'm 

just recognizing a level of- there may not be enough due 

diligence for people to get what they need in for the 

Department to review and provide valuable feedback to 

individuals to even have a proper vote. So we would have 

wasted 30 minutes, in essence, and still come out with 
60

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

the same outcome. That's the thing.

MR. MARTIN: We do have a number of 

proposals for language change that are in play here that 

we want to be able to see if we can incorporate. So I 

don't- there'll be no lack of due diligence. Whatever we 

have- whatever we come back with will be presented to the 

negotiators and reviewed. So everybody will have an 

opportunity to look at it. So we're not going to be 

putting anything in here asking you to vote consensus or 

non-consensus on anything that you have not viewed. So 

whatever it is we come back with, you will certainly see.

MR. ROBERTS: Cindy, did you want to 

weigh in?

MS. JEFFRIES: Yeah, I just, you know, 

I don't believe that it is a waste of time to allow this 

caucus. We need to let the party- let the Department get 

into their caucus so that they can commence their due 

diligence and, you know, the time that they have set 

aside to do this. Alright? There are late proposals 

coming in that were generated from discussion. And, you 

know, at some point, the Department needs to be able to 

just say, you know, look at those and say, we can do this 

or not, you know, and so let's go ahead and let them go 

to their caucus and get that piece underway.

MR. MARTIN: Thank you, Cindy.
61

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

MR. ROBERTS: Yep, yep, we're good to 

go. And I think we can all pop in in about 15 minutes 

just to see where the Department is.

MR. MARTIN: Thank you.

MR. ROBERTS: Thank you for your 

patience during that brief caucus. Greg, I'll turn it 

right over to you and your team. I know you were 

discussing some potential changes.

MR. MARTIN: Thanks, Brady. We will 

look at that. We have made some substantial changes to 

the overpayment section in response to some of the 

concerns voiced before we went to caucus. I do want toWe'll review that change- we'll review those changes. I 

do want to state up front that we understand that there's 

a significant divergence of opinion at the table on the 

proposal and I want to acknowledge that and I want to 

acknowledge the, you know, the points made on both sides 

and the discussion that we've had got a little heat at 

some points. But I think overall, it was a, you know, a 

good discussion. Before we move on, I want to say that we 

have reviewed another proposal that came in and the 

Department is not amenable to any language that provides 

opt-out. We are going to remain with our proposal of 

requiring student authorization for books and supplies 

offered as part of inclusive access or any other way we 
62

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

would term that process. The only- we do understand that 

there are some issues around how books and supplies are 

provided. The Department would be open to suggestions 

only if they involved- only if they were as or rather 

acknowledging of the opt-in position that we currently 

take. So we're not in a position to entertain any other 

submissions that would allow for a modified opt-out 

process whether it was- even if it was restricted. So I 

want to say that. So what we'll do is- acknowledging 

that, we will move to the changes that we've made with 

respect to- well, before we do that, I want to goVanessa, could you take us to disbursements where you 

made the change that Barmak had requested under thelet's see if I can find it. The language where we had 

include.

MS. MORELLI: No, that's up. She was 

already there. Vanessa, you were already there.

MR. MARTIN: I'm sorry. I didn't see 

that. Go back to that, Vanessa. Yeah, that's what I 

wanted to do. Yeah. So. Yeah. Right there. This is the 

first change we made. This is crediting a student's 

account ledger. And we made some changes here to clarify 

that an institution may not assess a mandatory charge for 

institutionally provided books and supplies or charge 

books and supplies as part of tuition and fees unless the 
63

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

student is a confined or incarcerated individual. So 

that's just clarifying the language there from the 

previous language which said include to making it clear 

that the school may not assess any charge for those 

materials. And then I think we can move on to the payment 

language. And when we get there I'll let David walk 

through those changes.

MR. ROBERTS: This is page 12.

MR. MUSSER: Yeah. So here we did make 

some changes in terms of wording. I think we agree with 

Barmak that generally we don't regulate ourselves and 

that it was an oversight on our part not to frame it in 

those terms. We believe we made the changes that the 

negotiators requested with respect to ensuring that the 

components of the Direct Loan rehabilitation requirements 

pertaining to the calculation of the monthly payment and 

the process for requesting changes and having the 

Secretary provide notice of the option to do so by 

incorporating (f)(1) romanette 1 instead of (f)(1) 

broadly to exclude the concept of the nine payments, and 

then to include paragraphs (f)(2) through (f)(4) of that 

section. Our view is still that this should be primarily 

a cross-reference to those provisions and not include 

other language as to the extent possible. We did add the 

provision suggested about a prominent statement that the 
64

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

Secretary provides that the student may object orally or 

in writing to the payment amount and providing the time 

frame for that objection. Scroll down a little bit, 

Vanessa. We did make the change to (8). That was also a 

typo on our part. So thank you for that catch. And then 

finally we made this change here (7) through (10) which 

we did not add that full paragraph that the negotiators 

requested because we believe that that is incorporated in 

the earlier change to add those paragraphs in the Direct 

Loan rehabilitation regulations. And we believe this does 

address the negotiator's concerns. We did the same things 

for the FSEOG section. Essentially, we mirrored those.

MR. ROBERTS: Okay. Thank you, all. At 

this point. Oh, sorry. Go ahead, Robyn.

MS. R. SMITH: Could you scroll back 

up? I just want to make sure the cross-references are 

right, and I just- if you could scroll back up to the (f) 

the cross-references to the alternative payment plan, I'm 

just comparing them. But thank you. Thank you for doing 

this. I think probably you've addressed our concerns. I 

just want to make sure the cross-references are right. 

Thank you.

MR. ROBERTS: Okay. Thank you.

MS. R. SMITH: I think the crossreference. Thank you. I think that works.
65

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

MR. ROBERTS: Jillian, I know the 

intent was to hopefully take a consensus check on this. 

Do you have a question or is it feedback?

MS. KLEIN: Well, I mean, I guess I 

would just say- so thanks for, I guess, sending me some 

language. I would just say, I think regardless of the 

opt-in or opt-out, there's still, and this is what I said 

yesterday, a huge issue with how proprietary materials or 

bundle materials are provided to students, even if you 

make them opt-in, because there's no way that an 

institution can price check against what's publicly 

available. So and this was the exchange, I think, Greg, 

you and I had yesterday. And at one point you said, well, 

if an institution has looked around and there's no 

comparable price, then they've done their job from the 

Department's perspective. So I guess I would just 

highlight that there should be regulatory language that 

speaks to that or something. Because regardless if we're 

talking about opt-in or opt-out, that experience- there's 

no way for an institution to actually even provide 

proprietary materials in your language to a student 

because we can't fulfill the requirement to price check 

against the market.

MR. MARTIN: I want to- we want to 

voice a reasonable position here. I think you're right 
66

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

that if the school has, you know, design materials such 

that there's nothing on the market to which it can be 

compared. That you've having done, I mean, we do require 

you to check for that if that's- if you've done your 

diligence there and there's nothing to compare it to then 

we would consider that done. I don't know what- that 

would be a fairly clunky construction in the regulation. 

I can't, you know, I think the regulation as written 

accommodates for that. I don't, you know, I understand 

your position, but I don't know what, you know, what I 

could put in the regulations. I'm certainly willing to 

address that in guidance in the preamble and to commit to 

doing that. I'm not going to put any school in a position 

of having to do something which simply cannot be done 

because there's nothing to compare it to. But I think 

you've- if you have made that determination and I would 

say that, you know, you have to- it has to be a good 

faith determination that there is nothing comparable and 

that the institution has made every effort to offer it at 

the lowest price possible.

MS. KLEIN: Which, with all due 

respect like that is- if you just take out the opt-out 

stuff that's what I sent you. I mean, I put in tons ofso I would just encourage the Department to look at that 

and I know we're done talking about this. But like as you
67

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

guys move towards draft language, I gave you that. I put 

in so many different qualifiers about the narrow ways 

that this would be used. And you can take that out 

regardless of opt-in or opt-out to add it into regulatory 

language. Please do not regulate in the preamble. Thanks.

MR. MARTIN: We will certainly 

consider it.

MR. ROBERTS: Alright. Barmak, you'll 

be the final comment on this and then I'm going to see if 

the committee is okay with taking a check at that time, 

but go ahead.

MR. NASSIRIAN: Very briefly, I 

submitted something in writing. I just want to alert the 

Department that we're almost coming full circle here. 

This conversation was initially focused on certain kinds 

of misconduct by institutions, typically involving, like, 

you know, cosmetology kits that were vastly overpriced 

and so unique that they could charge whatever they wanted 

to. I'm sympathetic to this notion of bundling 

educational materials at a lesser cost than buying 12 

books at full price. Maybe the mechanism- it should not 

just be the uniqueness of the bundle, because anybody can 

create a unique bundle that doesn't exist anywhere else. 

Maybe the safeguard would be that neither the school nor 

the bookstore is actually charging anything beyond cost 
68

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

to ensure that they don't put together a flimsy little 

packet and then call it a $500 unique product.

MR. MARTIN: Well, I agree with what 

you're saying there Barmak about the fact that yes, I 

want to say that the practice of saying that we've 

assembled, you know, various components of a kit, you 

know, various things, and it's only- you can only get 

this assemblage, but we've offered it. Ergo, that's 

something you can't get anywhere else. That's completely 

disingenuous. I don't think that's what Jillian was 

talking about. She was talking about, like, you know, 

institutionally designed materials. I think we'd have to 

construct that in such a way that we made that clear. I 

don't want to open up the regulation for gaming by people 

doing that type of thing because again, I agree with you 

that just because you've bundled a certain way doesn't 

mean I can't get it these other ways if I choose to do 

so. So yeah. So I definitely take that. Can I ask Jamie 

to- Jamie, you put a question in the chat and I would 

like you to- I'm asking you rather to ask that.

MS. STUDLEY: You know, I put it in 

the chat because I don't know that it'll influence the 

vote here, but there- I think there are places that say, 

let's avoid all these extras and let's just say to take 

this class, it costs this much. And instead of asking
69

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

students to buy things separately in the publicly posted 

tuition. So that's the easiest thing for people to 

compare to others. This place it costs a thousand. That 

place it costs $1,200. But one of them says, I will just 

include everything that you need to take this class. So 

it's not a separate books and supplies issue. I just 

don't want somebody to- I'm just picturing a school not 

being clear about whether- in a way that seems the most 

visible to students, the most crisp that there's no 

extras, there's nothing else that you- you take this 

class, everybody needs to have this clay and paint, and 

that's going to be part of the institution's budget to 

teach that class, just like we're turning the lights on 

and we're giving you if it's, you know, it on site we're 

giving you a chair and we paid the teacher, that we don't 

take those apart. I don't know if that's a real question 

for institutions, so I didn't want to bother you here.

MR. MARTIN: No, I think it's a 

legitimate question.

MS. STUDLEY: It would help for

schools to know that.

MR. MARTIN: Right. We had actuallythat very question came up. It was one of the last 

questions I think I discussed with John Klaus and Jeff 

Baker still present at the Department. So I have all 
70

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

these memories of like, the Titans at the Department that 

I discuss things with.

MS. STUDLEY: They sure are.

MR. MARTIN: And then they left and 

all you have is me. So anyway we had discussed that and 

no, we're not- and we discussed it and I remember Jeff 

saying about the context of an art class where there were 

supplies or clay, whatever needs to be used for modeling. 

It's not the students- it's just part of the- what's 

necessary to do the work. Or maybe an engineering class 

where there are, you know, materials for building.

MS. STUDLEY: Or science classes. Some 

places make you buy your own microscope. Some places may 

say, here's.

MR. MARTIN: So no, it was never our 

intention to do that. And certainly, again, we don't 

control tuition. We don't regulate the tuition and fees. 

If an art class has a charge that's inclusive of those 

materials, we would be okay with that. But David, do you 

want to?

MS. STUDLEY: And it wouldn't be a 

separate charge. Can I just say one more thing? The 

reason I think it matters is that it does mean if it's 

included in tuition, the tuition to take this whole 

class, to me, it seems like a benefit for aided students 
71

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

because they know what the cost is and if support is 

available to them, they get support for a class that 

provides the microscope, the tools, and the things that 

they need. But you wouldn't want them in the school to be 

in the position later of being surprised and saying, no, 

you weren't allowed to do that and it was ineligible, 

that would be.

MR. MARTIN: Right. I definitely want 

to put some parameters around it because the way we 

viewed it in, you know, when we were discussing it 

before, was that it has to be, you know, something 

generally provided in the class, which is not like a 

student purchasing his or her own books or kit. It's that 

the class uses these materials in general. So I don't 

want to preclude that, but I want to make certain that I 

put some, you know, put some parameters around that. And 

I would open it up to my colleagues David or Denise. 

Dave, you want to.

MR. MUSSER: In the interest of time, 

I don't want to spend too much more time on it, but I 

agree with Greg. I think this is our current position and 

I also hear the negotiators that on this particular 

point, some additional clarity is needed. And we can go 

back and think about that. But I don't, you know, I don't 

believe it will affect the consensus vote. So I don't 
72

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

want to do that here.

MR. MARTIN: Thank you, Dave. Thank 

you, Jamie.

MS. STUDLEY: Really briefly, if I 

might, the segway is if Jillian decided to solve the 

situation she's describing by saying, you know what, I'm 

going to make those- I’m going to do those for everybody, 

I'm going to count it in my institutional copying or 

printing budget, and I will just hand it out to every 

student in this class. And if that means that I have to 

raise tuition by $42 or $12 to cover that, that will keep 

me from having it as an extra or an accessory. And in 

that case, I think people would want to know from the 

Department whether that was okay to be in the budget, 

even if it meant handing everybody the materials or 

whether it required some additional, you know, 

monitoring.

MR. MARTIN: Well, I think I think in 

that case, we talk- first of all, you're talking about 

staff time in developing all this. Which that's part 

tuition fees anyway. What professors are- what you're 

paying staff in order to develop coursework to do what 

they do. That's part of what is included in tuition and 

fees. So if as part of that compiling writings and 

whatever else is in there and publishing and printing 
73

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

those out or making them available via digital means as 

part of the expense of the class, yes, we would be 

agreeable to that.

MR. MUSSER: And I also think Barmak 

brought up a great notion of if it's done at cost. And 

whatever exactly it costs the school then they can 

incorporate that. And so, like I said, we'll, I think we 

understand these issues and we will go back and think 

about them.

MR. ROBERTS: Thank you all for that 

discussion. With the utmost respect to the positions that 

have been articulated and, you know, the somewhat, you 

know, intractable differences partially elucidated at the 

table. Greg, is it okay to move to a consensus check on 

this? Again, with apologies for eating into your break 

period.

MR. MARTIN: It is.

MR. ROBERTS: Okay. So with that we'll 

do a consensus check. As folks appear on my screen, a 

thumbs up means full support, sideways, you may have some 

issues but you're not withholding consensus. Thumbs down, 

serious concerns. Anyone who withholds consensus will 

have the opportunity to articulate new things for the 

Department to consider as they move into the NPRM period. 

So with that, Jillian, I have you first on my screen. 
74

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

Thumbs down. Jamie. Sideways thumb. Jessi. Thumbs up. DC. 

Thumbs down. Barmak. Sipping coffee. Thumbs up. Jason. 

Thumbs down. Carolyn. Thumbs up, John. Sideways thumb. Jo 

Blondin. Thumbs down. Thank you. Laura. Sideways thumb. 

Diana. Sideways thumb, JoEllen Price. Thumbs down. Robyn. 

Thumbs up. Dom. Thumbs down. Voting on behalf of business 

officers, my apology. And Scott on behalf of private nonprofits. Thumbs down. Greg. Thumbs up. Anyone who voted 

thumbs down, there were a number of you. Feel free to 

raise your hand if you have anything new for the 

committee or the Department to consider on this issue. 

Okay. Again, my sincere thanks to all of you for all your 

hard work and discussion on this. Apologies for eating 

into your break hour. We'll see everyone at 1:00 p.m. 

Eastern. And we will resume the discussion. Thank you, 

all.

MR. MARTIN: Thank you.

 
75

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

Zoom Chat Transcript 

Program Integrity and Institutional Quality- Session 3, Day 3, Morning, March 6, 2024 

*Chat was copied as presented, as a result minor typos or grammatical errors may be present. 

From P, Jillian Klein, Proprietary Institutions to Everyone:

Was ED planning to send around their most recent state auth language promised 

yesterday?

From P - Erika Linden - Private Nonprofit Institutions to Everyone:

Scott Dolan will remain at the table for private nonprofits

From P. Jo Blondin, Community Colleges to Everyone:

Also, can we have an updated agenda for tomorrow with the cadence of issues/votes still 

needed? Thank you.

From P-Robyn Smith, Legal Aid Orgs. to Everyone:

Sophie Laing will be coming in for Legal Aid organizations.

From P - JoEllen Price, Financial Aid Administrators to Everyone:

Zack will come to the table for FA Administrators

From Joe Weglarz (P) NACUBO to Everyone:

Dom will be coming to the table

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

data and evidence 

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

how many students

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

and they can choose to opt out

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

my apologies brady

From Cindy Jeffries - FMCS Facilitator to Everyone:
76

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

Replying to "Also, can we have an..."

 

Hi Jo, yes an updated agenda will be provided for tomorrows session.

From A - Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Reacted to "Hi Jo, yes an updat..." with ����

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

which is more about disclosure and refund rules

From P. Jo Blondin, Community Colleges to Everyone:

Reacted to "Hi Jo, yes an upd..." with ���

From P. Jo Blondin, Community Colleges to Everyone:

Agree with Zack

From P - JoEllen Price, Financial Aid Administrators to Everyone:

Reacted to "Agree with Zack" with ���

From A-D'Angelo Sands - HBCUs, TCUs, MSIs to Everyone:

Dr. Prince with be joining the table for HBCUs, TCUs, and MSIs

From P - Barmak Nassirian, Veterans & Military Students to Everyone:

suggested regulatory edit for the Department on 668.164(c)(1)(ii)(B): Strike "at or" in the 

sentence. Limiting this provision to "below market rates" would better enable institutions to 

negotiate with publishers seeking privileged access to students through institutional bookstores.

From P, Jillian Klein, Proprietary Institutions to Everyone:

I have a proposal on this topic Dave is mentioning that I just sent to facilitators.

From P, DC, HBCUs, TCUs, MSIs to Everyone:

P, DC, HBCUS will be returning to the table

From P - Barmak Nassirian, Veterans & Military Students to Everyone:

Denise is right: my comment yesterday addressed 164(c)(1)(i)(A). I suggested replacing 

"include" with something like "automatically bill"
77

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

From A, Emmett Blaney, Students/Borrowers to Everyone:

Jessica Morales returning to the table for Students/Borrowers.

From A - Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Does this not bring us back to a school's option then to increase tuition and give students 

books/supplies for free?

From A - Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

This would arguably reduce student choice.

From P - JoEllen Price, Financial Aid Administrators to Everyone:

Reacted to "This would arguably ..." with ���

From P - Barmak Nassirian, Veterans & Military Students to Everyone:

Spending else's money--no matter how benevolent the purpose--requires their affirmative 

consent. Post facto opt-out policies, regardless of how transparent they are--fail that baseline 

consumer right.

From P - JoEllen Price, Financial Aid Administrators to Everyone:

I agree with Zack. Shouldn't there be a concern that the bad actors will mask the costs in 

Tuition, so it appears they are offered for free?

From P - Carolyn Fast, Civil Rights/Consumer Advocates to Everyone:

+1 to Barmak's comment above.

From P. Jo Blondin, Community Colleges to Everyone:

Reacted to "I agree with Zack...." with ���

From A, Magin Sanchez, Civil Rights/Consumer to Everyone:

+2 to Barmak’s comment

From A. Ashlynne Haycock-Lohmann (vets) to Everyone:

Reacted to " +1 to Barmak's com..." with ���

From A, Emmett Blaney, Students/Borrowers to Everyone:

Reacted to "Spending else's mone..." with ���
78

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

From P - JoEllen Price, Financial Aid Administrators to Everyone:

As I listen to this conversation, I turn my attention to the various automatic fees colleges 

charge that students have complained about for years. Student organization fees, transportation 

fees for shuttles, etc.... Aid is applied to those fees even though students don't participate and they 

complain about those fees. I believe in student choice but also believe in student success, which 

requires books and materials needed to be successful.

From (A) Dom Chase - Business Officers to Everyone:

Reacted to "As I listen to this ..." with ���

From P, Laura Rasar King, Specialized Accreditors to Everyone:

Reacted to "As I listen to this ..." with ���

From P, Jason Lorgan, Public 4-year to Everyone:

Reacted to "As I listen to this ..." with ���

From A - Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Reacted to "As I listen to this ..." with ���

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

Erika will step back in for private nonprofits

From P - Erika Linden - Private Nonprofit Institutions to Everyone:

Thank you, Scott, for articulating the frustration some are experiencing.

From P - JoEllen Price, Financial Aid Administrators to Everyone:

Reacted to "Thank you, Scott, fo..." with ���

From P, Laura Rasar King, Specialized Accreditors to Everyone:

Reacted to "Thank you, Scott, fo..." with ���

From P, Jason Lorgan, Public 4-year to Everyone:

Reacted to "Thank you, Scott, fo..." with ���

From (A) Dom Chase - Business Officers to Everyone:

Reacted to "Thank you, Scott, fo..." with ���
79

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

From P. Jo Blondin, Community Colleges to Everyone:

Reacted to "Thank you, Scott, ..." with ���

From P. Jo Blondin, Community Colleges to Everyone:

Replying to "Thank you, Scott, ..."

I feel like I am back in January. Time is running out. That appears to be a strategy, sadly.

From P - Barmak Nassirian, Veterans & Military Students to Everyone:

I am sympathetic to Jillian's comments about schools attempting to reduce the cost of 

books and supplies by creating packets. But her proposed 164(c)(1)(i)(A)(3) strikes me as needing 

significant changes, lest it turn into a license for potential bad actors to price-gouge students by 

creating over-priced "unique" packets. Maybe Jillian can add some additional criteria to guard 

against that threat.

From A - Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Thank you for the including the clarifying text regarding credit balances! Was any further 

consideration given to how this may impact funds escheating to the State?

From P, Jillian Klein, Proprietary Institutions to Everyone:

Replying to "I am sympathetic to ..."

 

Thanks for the feedback, Barmak. Let me see what I can do.

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

Reacted to "Thanks for the feedb..." with ���

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

Reacted to "I am sympathetic to ..." with ���

From P - JoEllen Price, Financial Aid Administrators to Everyone:

Zack will be coming to the table for FA Administrators.

From A, Sophie Laing, Legal Aid to Everyone:

Robyn is going to step back in for Legal aid orgs.

From P - Carolyn Fast, Civil Rights/Consumer Advocates to Everyone:
80

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

+1 to Sophie's comments that students in this situation should be able to access the most 

generous repayment plan.

From A - Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

JoEllen has returned to the table for Financial Aid Administrators.

From A, Magin Sanchez, Civil Rights/Consumer to Everyone:

+1 to Sophie and Carolyn

From P., Diana Hooley, State Attorneys General to Everyone:

Reacted to "+1 to Sophie's comme..." with ���

From A, Magin Sanchez, Civil Rights/Consumer to Everyone:

Reacted to "+1 to Sophie's comme..." with ���

From P - Barmak Nassirian, Veterans & Military Students to Everyone:

+1 on Sophie's comments

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

thanks!

From P-Robyn Smith, Legal Aid Orgs. to Everyone:

We would like to ED to review the proposal we just submitted to ensure that if ED sticks 

with IDR on the repayment proposal, it incorporates alternative calculation option, thanks.

From P-Robyn Smith, Legal Aid Orgs. to Everyone:

Sorry, IBR plan, not IDR!

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

I think it makes sense to allow the Department to review in caucus. For one, I am 

appreciative of them taking this step.

From P - JoEllen Price, Financial Aid Administrators to Everyone:

Reacted to "I think it makes sen..." with ���

From P. Jo Blondin, Community Colleges to Everyone:

Agreed, and the recognition of the time constraints. I look forward to the report after 
81

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

caucus.

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

Reacted to "Agreed, and the reco..." with ���

From P - JoEllen Price, Financial Aid Administrators to Everyone:

Reacted to "Agreed, and the reco..." with ���

From A, Magin Sanchez, Civil Rights/Consumer to Everyone:

Reacted to "I think it makes sen..." with ���

From P - Erika Linden - Private Nonprofit Institutions to Everyone:

To ED and Facilitators - I've lost track. Is the plan to take consensus vote on Issue 2 (state 

auth) later today or on Friday?

From P, Jillian Klein, Proprietary Institutions to Everyone:

Replying to "To ED and Facilitato..."

 

Erika wants to come back on Friday :)

From P - Erika Linden - Private Nonprofit Institutions to Everyone:

Replying to "To ED and Facilitato..."

 

Yikes - I meant Thursday - thanks, Jillian, for keeping me on the right day.

From P, Jillian Klein, Proprietary Institutions to Everyone:

Reacted to "Yikes - I meant Thur..." with �������

From A - Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Reacted to "Yikes - I meant Thur..." with �������

From P-Jessi Morales, Students/Borrowers to Everyone:

Replying to "To ED and Facilitato..."

 
82

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

I had a slight panic attack just now lol

From P-Jessi Morales, Students/Borrowers to Everyone:

Reacted to "Yikes - I meant Thur..." with �������

From A - Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Reacted to "I had a slight panic..." with ������

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

Reacted to "Yikes - I meant Thur..." with �������

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

Reacted to "I had a slight panic..." with �������

From A, Magin Sanchez, Civil Rights/Consumer to Everyone:

Replying to "To ED and Facilitato..."

 

Never been more frightened in my life

From P, Jillian Klein, Proprietary Institutions to Everyone:

Reacted to "Never been more frig..." with �������

From P-Jessi Morales, Students/Borrowers to Everyone:

Reacted to "Never been more frig..." with �������

From P - Erika Linden - Private Nonprofit Institutions to Everyone:

Reacted to "Never been more frig..." with �������

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

Reacted to "Never been more frig..." with �������

From A - Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Here it's scorpions.

From P, Jillian Klein, Proprietary Institutions to Everyone:
83

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

Reacted to "Here it's scorpions." with !!

From P-Jessi Morales, Students/Borrowers to Everyone:

Sorry, what page are we on?

From P-Jamie Studley, Institutional Accreditors to Everyone:

so re not including charges for supplies in tuition, if an art school included the cost of clay 

and paint and canvas for students in its budget and provided them to students in art classes would 

that be ok or a prohibited practice?

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

agreed with Jillian. A number of negotiators raised this yesterday too. And Barmak 

seemed to be open to some language modifications today.

From P-Jamie Studley, Institutional Accreditors to Everyone:

Above I mean expense included in the institutional budget, and folded into the tuition for 

the class, not an addl item in student budget

From Joe Weglarz (P) NACUBO to Everyone:

I have another obligation from 12 -1 ok if Dom votes?

From Brady Roberts | FMCS Facilitator to Everyone:

Yes and my apologies for running into lunch

From P - Barmak Nassirian, Veterans & Military Students to Everyone:

Again, I do support allowing schools to create reasonably priced bundled packets, but worry

about potential abuses by bad actors.

From P - Barmak Nassirian, Veterans & Military Students to Everyone:

Also, beyond possible manipulation of Regarding unique products "not available 

elsewhere," beware of publishers making minor changes to legacy products to make them unique 

and otherwise unavailable elsewhere.

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

to my point in January, this feels more like an enforcement issue. With that said, fully 

understand and empathize with complexity of enforcement 

From P, Jillian Klein, Proprietary Institutions to Everyone:
84

Negotiated Rulemaking Program Integrity and 

Institutional Quality - 3/6/24

Replying to "Also, beyond possibl..."

Thanks Barmak. I made a good faith effort to get at this but always open to ongoing 

suggestions/conversation about how to do this well. I tried to get something together quickly but 

recognize it might not be perfect.

From P - Erika Linden - Private Nonprofit Institutions to Everyone:

I have to leave for a meeting - Scott will return to table for private non profits and will vote.